Estonia, Export, Financial Services, Insurance, Markets and Companies

“A study showed that the current insurance market does not correspond to the need of exporting companies and the need for a new state-owned insurance company exists,” said Economy Minister Juhan Parts.

Currently state export guarantees are provided to exporters by Kredex. Due to EU state aid rules, Kredex can at present guarantee export transactions only outside EU and OECD states mainly.

Parts said that the global financial crisis reduced the possibilities of Estonian exporters to hedge credit risks since international insurers operating in Estonia reduced operation volumes considerably and price level surged.

By founding a private credit insurance company the state creates, in addition to the officially state-backed credit insurance, the possibility to guarantee short-term export deals at the EU and OECD directions and offer also domestic credit insurance. State guarantees are not valid on the two latter products and it is an activity based on business principles.

Two thirds of Kredex Krediidikindlustus shares will belong to the state and a third to Kredex. 200 mln kroons of the share capital comes from the economy ministry and 100 mln from Kredex. State guarantees reserves will be supplemented with 200 mln kroons from the European Regional Development Fund.