Credit, Surety and Political Risk
Our specialised home office division in Hannover for worldwide credit, surety and political risk reinsurance is not just a core unit within Hannover Re, but also one of the few true leaders in this market.
Although proportional credit treaties still make up the majority of our portfolio, we actively write and quote non-proportional covers, related credit lines, and facultative business. For good purpose however we have always abstained from financial guaranty business.
Our main product lines comprise the reinsurance of traditional suppliers credit, surety bonds, and political risk protection (fidelity reinsurance is offered when forming part of a credit or surety portfolio). As guidelines for coverage we apply the worldwide accepted conventional industry rules concerning scope of cover, product charcteristics, tenors, underwriting standards, and marketable terms and conditions. Exceptions will be considered upon request. Non traditional product lines including financial guaranties (ICISA definition) will usually be excluded. Alternative credit solutions in contrast to the above mentioned traditional lines are not in our favor unless they form a minor part of a substantial portfolio of traditional products.
Our main product lines are defined as follows:
Suppliers credit: Credit insurance covers the non-payment of goods and services in case a debtor cannot fulfil its obligations towards the supplier in consequence of insolvency or protracted default. For further product description please see the ICISA definition.
Surety/Bond: Surety/bond insurance guaranties a beneficiary the complete fulfillment of contractual performance or payment obligations in case a debtor does not perform or pay at 100% (not necessarily due to insolvency). For further product description please see the website of SAA.
Political Risk: Political risk insurance provides cover against governmental action that frustrates the fulfillment of contractual obligations in connection with cross border transactions. The underlying contract may be trade and or investment related. Typical examples are embargoes, exchange transfer problems, inconvertibility, failure of governments to pay, confiscation, expropriation, nationalization, deprivation. For further background information please see Political Resources on the net.
