How Much Does Export Credit Insurance Cost In Australia?

Export credit insurance is a valuable tool that businesses can use to protect themselves against the risks of exporting goods and services. It provides coverage against a range of risks, including non-payment, political risk, and commercial risk. However, one of the key considerations for businesses when deciding whether to purchase export credit insurance is the cost. In this article, we will explore the cost of export credit insurance in Australia.

Factors Affecting The Cost Of Export Credit Insurance

The cost of export credit insurance varies depending on a range of factors. Here are some of the key factors that can impact the trade credit insurance cost:

1. Level Of Coverage: The amount of coverage required will impact the cost of the policy. Generally, the higher the coverage, the higher the cost of the policy.
2. Risk Profile: The level of risk associated with the export transaction will impact the cost of the policy. Factors such as the creditworthiness of the buyer, the political climate in the buyer’s country, and the economic stability of the buyer’s country will all be taken into account when determining the risk profile.
3. Length Of Coverage: The length of coverage required will impact the cost of the policy. Generally, the longer the coverage period, the higher the cost of the policy.
4. Type Of Policy: There is a range of different types of export credit insurance policies available, including short-term and medium-term policies. The type of policy required will impact the cost of the policy.

Cost Of Export Credit Insurance In Australia

The cost of export credit insurance in Australia varies depending on the factors mentioned above. Typically, the cost of export credit insurance ranges from 0.5% to 1.5% of the value of the export transaction. However, this can vary depending on the level of coverage required, the risk profile of the transaction, the length of coverage needed, and the type of policy.

Businesses need to consider the cost of export credit insurance when deciding whether to purchase a policy. While the cost may be a consideration, the benefits of having export credit insurance can far outweigh the cost. In the event of non-payment or other risks associated with exporting, having export credit insurance can help businesses to mitigate their losses and ensure that they can continue to operate.

Conclusion

Export credit insurance is an essential tool that businesses can use to protect themselves against the risks of exporting. The cost of export credit insurance in Australia varies depending on a range of factors, including the level of coverage required, the risk profile of the transaction, the length of coverage needed, and the type of policy. While the cost of export credit insurance may be a consideration for businesses, the benefits of having export credit insurance can far outweigh the cost. By purchasing export credit insurance, businesses can ensure they have the protection they need to continue operating and growing their export business.