Euler Hermes SA (ELE), a French-German trade-credit insurer, said it may reduce its coverage of exports to Greece because of the risk of the country exiting the euro. A decision is planned before the end of May.
“In light of the recent developments, Euler Hermes will most probably have to switch to a more prudent approach, also in the interest of its customers,” spokeswoman Bettina Sattler said in an e-mailed response to questions. “The outcome of the new elections in June remains highly uncertain. Consequently, the situation is further deteriorating. The risk of Greece exiting the Eurozone has been revived.”
Greeks vote again June 17 after elections May 6 failed to produce a workable majority in parliament, as parties opposed to sticking to Greece’s part of an aid agreement with the European Union made strong inroads.
The credit insurer denied a report in German newspaper Bild that it has already cut insurance cover for exports to Greece. “Euler Hermes has maintained a high level of cover for its customers until today,” Sattler said. “But now we are confronted with a changing situation.”
Euler Hermes, which was created in 2002 through the merger of units from Allianz SE (ALV) and Assurances Generales de France SA, said in its 2011 earnings report Feb. 16 that the “world economy is walking on a tightrope” and that its management has “prepared for possible scenarios.”
The company, based in Paris and still controlled by Munich- based Allianz, had gross premiums last year of 2.28 billion euros ($2.9 billion), up 5.9 percent from the year earlier.
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