Government Increases Trade Insurance Limit by 10 Trillion Won

The Ministry of Trade, Industry and Energy announced on December 12 that the "2025 Trade Insurance Contract Limit Agreement" submitted by the government was passed as originally proposed at the plenary session of the National Assembly held on December 10. This agreement will see the export insurance limit of the Korea Trade Insurance Corporation (K-SURE) increase by 10 trillion won next year.

This move aims to bolster the export capabilities of South Korea's defense industry and small and medium-sized enterprises (SMEs), amidst a surge in the performance of the K-defense sector. The government had requested the National Assembly to raise the trade insurance contract limit from 270 trillion won this year to 280 trillion won next year, reflecting a 3.7% increase. This increase is part of a broader strategy to support large-scale export projects and mitigate risks associated with international trade.

By category, the overseas business finance insurance limit, which covers losses incurred when domestic and foreign financial institutions fail to recover funds needed for overseas projects such as resource development and infrastructure construction, was set at 9.9 trillion won, an increase of 3.3 trillion won. Additionally, the export base insurance limit, which supports the construction of manufacturing facilities in new industries and new ship orders, saw an increase of 700 billion won.

Last year, the reserve limit was utilized to support large-scale long-term export contracts, such as the Polish defense materials project, which amounted to 9.7306 trillion won. Consequently, the reserve limit has also been increased to accommodate future needs. The short-term export insurance limit has been raised by 6.8 trillion won, from 213.21 trillion won this year to 220.01 trillion won next year. Meanwhile, the long-term export insurance limit, which applies to export payment periods exceeding two years, was set at 10 trillion won.

The budget passed this time also includes 80 billion won in contributions to the trade insurance fund, bringing the total fund for next year to an estimated 4.5998 trillion won. Despite concerns about potential uncertainties, the fund multiplier, an indicator of financial soundness, remains at 25.1 times next year.