Insurance companies under criticism by BGA president for crisis-inducing business practices
In the heart of Berlin, Anton Boerner, the new president of the Federal Association of Wholesale and Foreign Trade (BGA), has voiced his concerns over the business practices of credit insurers during the coronavirus pandemic. Boerner's criticism centres around the insurers' reluctance to extend guarantees or pay out claims, a move that he believes is exacerbating liquidity problems for companies already struggling due to the crisis.
According to Boerner, credit insurers have tightened their risk assessments and coverage, leading to the withdrawal or reduction of insurance coverage. This, he argues, undermines companies’ ability to secure trade financing or confidently engage in business, compounding economic difficulties during COVID-19.
While regulatory responses specific to credit insurers and COVID-19 in Germany are not explicitly mentioned, the wider financial sector has seen evolving regulatory measures focused on risk management and consumer protection during the pandemic period. However, Boerner's criticism indicates that from the business community perspective, credit insurers' restrictive practices during the crisis remain controversial and contentious.
Boerner has not shied away from strong language, comparing the actions of credit insurers to kicking the economy in the shins. He has also criticised the insurers for putting companies' existence at risk despite receiving state guarantees, and for significantly increasing premiums for businesses during the crisis.
The state guarantees provided to credit insurers have not prevented negative developments in the economic situation, as predicted by credit insurers' analysts. Companies are currently facing problems with credit insurers, according to Boerner, and the insurers have not prevented the problems companies are currently facing, nor have they prevented themselves from reducing limits for businesses.
Boerner's statements were made in the Thursday editions of the Funke media group's newspapers, adding weight to his claims. The federal government has provided guarantees to credit insurers, but it appears that these guarantees have not been enough to alleviate the concerns raised by Boerner and the businesses he represents.
In summary, the controversy surrounding credit insurers’ business practices during the COVID-19 crisis in Germany centres around their reluctance to extend guarantees and pay out claims, which has caused significant distress for many traders and companies in the wholesale and foreign trade sectors. The BGA's president, Anton Boerner, has publicly denounced these insurers’ practices as harmful to trading businesses in the pandemic environment, but it remains to be seen how this controversy will unfold in the coming months.
[1] https://www.bundesbank.de/Redaktion/DE/Pressemitteilungen/2020/2020-12-17-Regulatory-Measures-for-the-Financial-Market-in-the-Coronavirus-Crisis.html [2] https://www.bundesbank.de/Redaktion/DE/Pressemitteilungen/2020/2020-03-30-Einfuhrung-des-Sonderprogramms-Kreditgarantie-fuer-Unternehmen.html
- Despite the federal government providing guarantees to credit insurers, other businesses in the wholesale and foreign trade sectors are still facing problems with credit insurers, with Boerner arguing that the insurers' restrictive practices are exacerbating these problems.
- Boerner's criticism of credit insurers' reluctance to extend guarantees and pay out claims has highlighted the contentious nature of their business practices during the COVID-19 crisis, impacting companies' ability to secure trade financing and engage in business.
