Credit insurers covering French companies against defaults by their foreign, and more specifically Russian, partners need to react quickly to the war crisis in Ukraine. Faced with the economic sanctions imposed by Western countries on Russia, companies are worried about the consequences for their export insurance.
Already limited guarantees for Russian and Ukrainian markets
In a recent interview with the French daily Les Echos, Patrick Martin, Medef's deputy chairman, explained that some companies, " particularly in the construction and engineering sectors, which place orders in Russia [...] do not know whether their export insurance is still valid, which is a cause for concern ".
Russia was already subject to sanctions before the start of the war in Ukraine, and credit insurers covering French companies dealing with Russian customers did not wait for the invasion of Ukraine to limit their cover.
In total, the amount of guarantees provided by private insurers, such as Atradius, Euler Hermes or Coface, to French companies operating in Ukraine and Russia would be less than 1 billion euros.
However, since February 24 and the introduction of unprecedented economic sanctions against Russia, including the country's exclusion from the Swift network, credit insurers have had to rethink their plans.
French companies await answers
In particular, credit insurers have lowered the rating they give to Ukraine and Russia when assessing the risk taken by companies operating there.
Private insurer Coface now rates Angola and Russia at the same level of risk, without however classifying Moscow as an "extreme risk" like Yemen or Iran. For Euler Hermes, on the other hand, Russia inherits the worst rating, due to its very high risk profile.
Although the signing of new contracts is hardly a topical issue, Euler Hermes has decided to take the lead by no longer granting any new or additional guarantees, whether for business in Russia or Ukraine.
French companies are increasingly concerned about the payment defaults suffered by Russian customers since the start of the crisis. At present, it is difficult for them to know whether compensation will be possible.
The only answer at present is that, in the majority of contracts, only a war between two of the five permanent members of the United Nations Security Council- China, France, Russia, the United Kingdom and the United States - is considered grounds for exclusion from cover.