Private carriers ‘crowded out’ of Canadian trade credit insurance market

A chief executive at a global trade credit insurance firm is calling for change after years of “unfair” market conditions in Canada.

By Bethan Moorcraft for Insurance Business Canada

David Dienesch, CEO of Euler Hermes Canada, says the Government of Canada needs to make changes to the mandate and activities of Export Development Canada (EDC) in order to open the trade credit insurance market up for private carriers and provide more export opportunities for Canadian corporations.

“The export credit insurance market in Canada is very uncompetitive. Private carriers are up against a monolith government entity, which has created an un-level playing field with no advantage for Canadian companies,” said Dienesch. “Canadian companies are not exporting as much as they could be. Our export market share doesn’t seem to be growing very much beyond the United States, despite the fact that we’ve signed some new trade treaties.

“I don’t think Canadian companies are well educated about the advantages of export credit insurance. That’s partly because insurance carriers and brokerages have chosen not to invest in the product because the EDC is crowding us out. It’s a completely uneven playing field for the private insurance companies who operate in this space.”

Canadian companies do not have to use the EDC for their export credit insurance needs. They have the ability to choose private partners such as Euler Hermes Canada, but, in doing so, they may miss out on certain up-front advantages of choosing the government insurer.

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