At insurance exchange transactions with physical commodity contract can be concluded with the seller and the buyer. Under a contract of insurance entered into by the Buyer, the responsibility of the insurer arises if the seller refuses delivery or delay in delivery beyond the stipulated term. Compensation for such a contract can be of various kinds: the delivery of the insured similar goods, compensation for some of the cost of unearned goods or payment of additional costs for the purchase of goods from other vendors. The right to choose options in indemnity insurer must belong.
According to the agreement entered into by the seller, the liability of the insurer arises when the buyer's failure to take the purchased goods or delay in its payment. Accordingly, the obligation of the insurance company can be expressed by one of the following: sale of goods, payment for the insured the difference between the previous and current realizable price (if it is dropped), compensation of the value of unpaid goods.
Based on the standard terms and conditions can be insured goods stocks on the stock exchange and its warehouses and carried insurance of individuals - members of contracts, accident and emergency situations in which the performance of their obligations to pay for or supply of goods.
Features insurance exchange risk due to the specific conditions of international relations. Care of domestic insurers should be primarily to protect our exporters, importers and other participants of foreign economic relations. Interests of foreign counterparts, are usually protected in each country means.
Exchange risk insurance necessary to replace these losses:
- Costs associated with the production of export goods, in case of failure of her foreign importer;
- Losses from non-payment for goods supplied and services rendered in the case of bankruptcy of a foreign partner or as a result of political events in the country;
- Losses from changes in the exchange rate of payment for the period of the contract prior to its execution.
Insurance exchange and currency risks can act as a form of protection of the interests of clients, as well as the exchange itself. These types of insurance are still poorly developed in our country, there are only a few examples of insurance contracts related to the risk of exchange and monetary activities.
Currency risk for the insurance used protective clauses, that is, additional terms and conditions included in the contract. Currently, due to the fluctuating exchange rate terms of the contracts can be provided that the amount of the payment will be revised in proportion to the exchange rate of payment, but not to a single currency, and the average number of the set, the most used currencies.
Currency risk for the insurance, some new financial instruments: financial futures and financial options (securities), forward rate agreement, issuance of securities with additional insurance conditions, etc. These methods of insurance allow transferring currency, credit and interest rate risks from producers and investors who are burdened by competition in the markets in participation in world currency, credit and financial markets that are willing to take these risks, they will receive the corresponding profit. Operations with new financial instruments are mainly concentrated in the world's financial centers as well as legislation in some countries has hampered their use. These methods of insurance risks are developing dynamically and very promising. The use of forward and futures transactions for hedging risks in foreign trade can more accurately assess the ultimate cost of insurance.
Advantage of the insurance exchange risk through stock options are fully protected against adverse exchange rate and unlimited winnings. Losses are limited to the option buyer the option premium.
One method of exchange risk insurance is to regulate currency positions in order to close it. This regulation is used in conjunction with other methods. The scale of currency risk are directly dependent on the amount of foreign exchange exposure.
Growth of foreign currency transactions to hedge currency risk, especially speculative transactions significantly increased the volume of buying and selling currencies in the foreign exchange markets.
What modern methods of insurance currency risk instead of the safeguards.
Whether in all cases it is advisable exchange risk insurance. The answer to this question depends not least on the chosen method of protection.
Forwards are widely used to hedge currency risk, as well as speculation.
Used as compensation for transaction exchange risk insurance for loans: loan amount is tied to the price of a particular currency, goods delivered to repay the loan, in order to avoid changes of this amount as a result of fluctuations in prices and exchange rates. However, the unilateral benefits do contractors who buy products of enterprises built on compensation deals. Disadvantageous to the borrower record price at the time of the transaction, as is inflation of its real cost of repayment of the loan will be less than the delivery of the pre-fixed prices. Combination of currency-commodity clause is used to regulate the amount of payment, depending on the changes in both commodity prices and exchange rates. If prices and rates vary in the same direction, the amount of liabilities are translated at the highest percentage of deviation, if the direction of the speakers do not match, then the amount of the payment varies by the difference between the deviations in prices and rates. Banks use variable interest rates for life insurance for medium - and long-term loans.
