Amid rising geopolitical risks such as Russia's invasion of Ukraine, the government-affiliated insurance company Nippon Export Insurance has decided to expand its trade insurance system to support the strengthening of Japanese companies' supply chains. became.
Trade insurance is a system that covers losses incurred by Japanese companies doing business overseas, based on insurance premiums, when they are unable to collect payments from foreign companies due to war or political instability.
As geopolitical risks increase due to conflicts between the United States and China and Russia's invasion of Ukraine, Nippon Export and Investment Insurance will expand its system to support the strengthening of Japanese companies' supply chains.
Specifically, we will expand the coverage of insurance to cover losses in the event that prepaid cargo does not reach Japan, to include countries and regions outside of Japan.
For example, insurance benefits will now be paid even if important minerals such as lithium purchased by a Japanese company from a resource-rich country fail to reach the factory of a Japanese manufacturer overseas.
Furthermore, we will provide new insurance to make it easier to export to countries where there are risks such as political instability.
Based on a "letter of credit" that guarantees payment from a local company, a Japanese financial institution will temporarily advance the payment and cover losses if collection is later impossible.
Atsuro Kuroda, president of Nippon Export and Investment Insurance, said, ``We want to support the expansion of business by seamlessly covering the supply chains of Japanese companies that spread around the world.''