Next year, the state budget allocates 15 million euros to the Guarantee Fund for export insurance, which is 57 percent more than this year, which ends with funds for this purpose of 9.3 million euros.
The funds of the Guarantee Fund, managed by HBOR, consist of payments from the state budget, collected insurance premiums, recourse payments from debtors for paid compensations, and other inflows, reduced by paid compensations, costs, and other outflows.
The total inflows of the Guarantee Fund from January 1, 1999, to December 31, 2021, amount to 146.71 million euros, of which payments from the Ministry of Finance amount to 59.73 million euros, while inflows from premiums, recourse collections, interest, and other payments amount to 86.98 million euros.
On the other hand, the total outflows in the same period amount to 65.15 million euros, of which outflows for compensation payments and costs amount to 39.51 million euros, and other outflows 25.64 million euros, it is stated in the budget explanation and concludes that it is evident ‘that HBOR manages the funds of the Guarantee Fund with the care of a good manager.’
One of the measures for managing portfolio risk is monitoring the ratio of the Guarantee Fund and total net exposure, which must not be lower than eight percent, so that the funds are sufficient for compensation payments and for taking on new export insurance jobs.
The regular program worth 159 million euros has been doubled this year for the purpose of insuring liquidity loans for exporters under insurance programs in accordance with the Temporary Crisis Framework of the EC, and there is also an additional 173 million euros in loans that banks secured under the COVID-19 portfolio insurance in the first half of 2022.
The amount of compensation for insured COVID-19 liquidity loans granted to companies from the DIV Group is also significant, with payments expected by the end of 2022 (a total of 41.14 million euros). Therefore, the government has already reacted and in the budget rebalance for this year increased the funds for the Guarantee Fund by almost eight million euros, so that the Fund’s exposure does not fall below the prescribed eight percent.
It is estimated that the net exposure from export insurance transactions on the last day of this year will amount to a record 630.43 million euros, which is an increase of 68% compared to December 31, 2021.
The budget explanation states that unplanned compensations in material amounts not covered in projections can significantly affect the amounts of actually needed funds in planning years. This serves as a kind of insurance. Namely, after a record 15 million euros for export insurance planned for 2023, in the following years, the Guarantee Fund is planned at the level of 5.6 million euros in 2024, and only 1.3 million euros in 2025.
