It covers both commercial and political risk. The insurance covers all export business carried out by the company, but also allows the insurance to have its credit sales in Norway covered. The length of credit can be up to two years.
In connection with the insurance upper limits have been stipulated for the amount which the exporter can have outstanding in total and per individual buyer. In principal the insurance can be sued by all Norwegian exporters regardless of the country to which they sell or the size of the credit sale. In other words you can use credit insurance if your annual credit sales are NOK 5,000 or NOK 5,000,000 and whether your exports are to Sweden or the Far East.
The premiums for Credit insurance are generally lower than for other guarantees as the risk here is much more widely spread. The premium is determined on the basis of the portfolio, buyer country, payment terms and sales volume. (Price example: Paper exporter, annual exports NOK 10 million to an OECD country, 30 days credit terms will result in a premium of approximately 0.5%.)
Credit insurance can also be used to obtain financing through a bank or other financing institution.
How does Credit insurance work in practice?
• The exporter sends an application for Credit insurance to GIEK on a standard application form.
• GIEK assesses the application and after 1-3 weeks the applicant will receive an offer for Credit insurance.
• The policy must then be accepted by the exporter to then be produced by GIEK.
• The applicant then requests a credit limit for all customers to whom he wished to export.
• GIEK carries out a credit assessment of the buyers and determines credit limits which are then sent to the exporter.
• The exporter can then sell as much as he wishes, provided that the outstanding amount at any one time does not exceed the credit limit. (The credit limits are normally given for one year at a time. New credit limits for new buyers can be established provided that the policy remains valid.)
Credit insurance is intended to be extremely easy to use and understand. With credit insurance from GIEK the company secures its income and thereby the jobs of its employees.
For more information refer to GIEK Kredittforsikring AS.
Credit Insurance
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Credit insurance is currently offered by our subsidiary company GIEK Kredittforsikring AS. The insurance covers the risk of customers not paying in connection with revolving credit sales.
