The Business Confidence Index for the 4th quarter shows that the members of the Berne Union see renewed demand for export credit insurance and expect a strong end to the year. Insurers are seeing increasing claims as high interest rates and higher input costs elevate insolvencies.
Business Confidence Index Q4/2023 published
The Berne Union (BU) recently published the Business Confidence Index for Q4. The BU’s Business Confidence Index was launched in 2021, with the objective to provide a continuous indicator of the overall perception of demand, risk appetite and claims in the export credit insurance industry. The index is based on quarterly snapshots of BU Members’ assessment of their current and imminent business situation with respect to these factors.
Important results at a glance
- Members observed a surge in demand for short-term trade credit insurance and signal a positive outlook for the final quarter of the year as exporters and banks exercise added caution.
- After a series of contracting quarters, demand for investment insurance with longer tenors rebounded. Renewable energy and telecommunication sectors have been identified as key areas experiencing growth.
- Risk appetite remains unchanged temporarily. Potential shifts in future risk appetite will depend on a few key factors, including the evolving situation in the Middle East, the Russia-Ukraine war and and tensions between China and Taiwan as well as the current trajectory of insolvencies and claims.
- High interest rates and the enormous cost pressure caused by ongoing inflation are increasingly leading to payment difficulties and thus claims. The BU members expect a further increase, especially in the SME sector. Arrears are expected to accumulate in Angola, Egypt, and Ghana. On the other hand, the relaxation of currency restrictions in Ukraine is providing members with renewed confidence.
About Berne Union
The Berne Union (BU) is the international association of private and public export credit and investment insurers. The 85 members together insure around 12% of global cross-border trade. OeKB has been a member of the BU since 1954. In the BU, OeKB represents the interests of the Austrian export industry by, among other things, observing the development of the competition, discussing ideas for innovations in products and processes, coordinating the approach to joint projects with other export credit agencies and concluding cooperation agreements.