How much does it cost to have SERV insure an export transaction?
Since premiums vary heavily depending on the transaction, it makes sense to look at how SERV assesses risk.
Like any other insurance, the premium mainly depends on the level of risk, which is determined by three major factors – the risk classification of the destination country, the debtor's creditworthiness and the loan term. SERV bases its country and debtor risk classifications on OECD guidelines.
OECD country categories
The OECD regularly rates countries based on factors such as political and economic stability, compliance with the law, or past experience with government debt repayments. It uses country categories (CC) ranging from CC1 to CC7. CC1 corresponds to the lowest country risk, CC7 to the highest.
High-income OECD countries such as the US, Australia, Norway or any euro zone countries are not categorised. According to the OECD, premiums for short-term transactions in these countries should be based on prevailing market rates. As such, exports to Greece (euro zone) may have higher insurance costs than a shipment to the Philippines (CC3), for example.
Another key factor is the creditworthiness of the debtor – i.e. the party buying the export goods or his guarantor. Creditworthiness is scored in commercial categories (CC) ranging from CC0 to CC5. There are also categories for government debtors (SOV) and for debtors who are more creditworthy than the government of their country of domicile (SOV+).
If SERV provides a financing institution with a guarantee for a Swiss exporter, SERV will rate the exporter from P1 to P5. These performance ratings are modelled on the system used by rating agencies (letter ratings).
Term, reductions and expense premiums
These risk classifications are then combined with the transaction term and risk. Additional collateral, extra review work or other factors can additionally raise or lower the premium.
The calculation is fully disclosed in the premium tariff and published on the SERV website.
You can determine your expected premiums with the SERV premium calculator.
SERV Swiss Export Risk Insurance