The protective shield continues to largely disregard the negative changes in customers caused by corona, such as a slump in sales or additional loans. Once the protective shield expires on June 30, 2021, the usual market mechanisms and business processes will again take effect and the credit insurers will again determine the individual credit rating on the basis of the actual situation at the individual companies, as is customary in the market.
"By extending the protective umbrella by six months, we have given German companies the best possible planning capability," says Van het Hof. "They now have sufficient time to prepare for the new normality, to adapt their business models to the current situation and to make them as crisis-proof as possible. That was an important issue for us. We are already offering our customers solutions for the time after the end of the protective shield. This gives them maximum transparency and planning security. This is particularly important in times of greatly increased risks, and companies have a very good starting position for a return to the road to success. On this path, we are accompanying the economy and our customers as a strong partner."
The extension of the protective shield for the German economy is a measure that continues to pursue the goal of protecting economically well-positioned companies from the pandemic in these difficult times. Companies that are in financial difficulties unrelated to the Corona pandemic are still not covered by the agreement now reached between the credit insurer and the federal government. Euler Hermes decides on credit based on the provisions of the guarantee contract. As usual, this is done on the basis of an individual assessment that takes into account a large number of factors: In addition to individual financial indicators such as turnover, profitability, financial result, debt, liquidity or cash flow, other factors such as country and sector risks, market position, diversification, sales markets, management, client structure, strategy or unique selling propositions also play a role.