Trade Partnership Insurance Launched to Bolster Canadian Business Through COVID-19 Impact
RIAC Members to Support Canadian Businesses with Additional Credit Capacity
Ottawa, ON – May 7, 2020
The Receivables Insurance Association of Canada (RIAC) is pleased to announce that RIAC members Export Development Canada (EDC), Euler Hermes, Atradius, Coface Canada and The Guarantee Company of North America have collaborated to bring much needed credit capacity to support Canadian businesses impacted by the COVID-19 pandemic.
Trade Partnership Insurance (TPI) is a select buyer reinsurance product that is intended to provide the Canadian-based private credit insurers with additional credit capacity. RIAC member brokers and other credit insurance brokers will be able to enhance their servicing of Canadian businesses through receivables insurance policies underwritten by RIAC member insurance companies leveraging the TPI reinsurance capacity. This Government mandated assistance for Canadian businesses is enabled by EDC which provides a backstop to excessive losses from claims that private sector insurers experience. This will enable insurers to support sales to companies where such support may not otherwise be available. This will enable Canadian businesses to trade securely, both domestically and on an export basis, at a time when getting paid and securing cash flow are more important than ever.
“This is a tremendously valuable outcome of the process RIAC began back in March with a letter to Finance Minister Morneau,” said Mark Attley, President of RIAC. “RIAC members worked tirelessly putting together a viable program that will support Canadian businesses as they struggle with the challenges brought on by the COVID-19 crisis.”
During the 2008/2009 economic crisis EDC, the private sector credit insurers and credit insurance brokers successfully co-operated in introducing a course of action aimed at reinvigorating the damaged credit market. The involvement of RIAC in 2020 accelerated collaboration amongst industry members culminating in an innovative solution to support Canadian business.
This public private partnership is the result of collaboration between the Government of Canada, EDC and RIAC that has been ongoing since early March. This follows the March 24th announcement by the Government of Canada of a broader mandate for RIAC member EDC to provide emergency liquidity to Canadian businesses through Canadian financial institutions and private credit insurance providers.
About RIAC: The Receivables Insurance Association of Canada (RIAC) is a national association with the mandate to increase the awareness, the technical knowledge, the usage and the distribution of credit insurance in Canada for the benefit of all Canadian businesses and members. RIAC was established in 2012 following the collapse of trade credit during the 2008/2009 recession. Its creation was prompted by the Canadian Government who called upon private sector insurers to coordinate with the government owned Export Development Canada to encourage businesses to re-engage in trade utilizing open account payment terms based on receivables insurance protection.