* Insurers not offering coverage, though
* Existing policies may not even cover Greek situation
By Ben Berkowitz
June 15 (Reuters) - Companies are clamoring for some kind of insurance protection in case Greece leaves the euro and sticks them with devalued drachmas, but brokers say the uncertainty around Sunday’s election has made that coverage unavailable of late - and it may not be obtainable any time soon, either.
With the outcome so difficult to forecast, most insurers are unwilling to offer coverage to protect against being stuck with a currency that cannot be converted, brokers said.
“In this business, when there is an election, it’s very standard for underwriters to sit back and say ‘let’s wait and see what happens,’” said Corina Monaghan, vice president of political risk for Aon Risk Solutions.
Her group has been flooded with phone calls over the last month from companies looking for some kind of currency coverage - too late, in most cases.
Many clients have given up on protecting against Greece risk, and are instead thinking about other potential European trouble.
“I think people are more concerned with what’s happening in Spain,” said John Lavelle of the trade credit and political risk group at Willis Group.
Greeks go to the polls in a repeat national election on Sunday that could decide whether Greece stays in the euro or heads down a path that could see it ejected from the single currency, spreading turmoil across global financial markets.
A potential euro exit falls into a gray area between political risk insurance, which covers companies from losses from insurrections, and trade credit insurers, which covers exporters to Greece if a currency devaluation or other event leaves the nation’s importers unable to pay for goods.
Political risk coverage is hard to obtain now, but so is trade credit protection - top insurers have already suspended coverage for shipments to Greece because of the risk of a euro exit.
Even those companies that already have political risk policies may end up receiving little help from their insurance, experts said.
“It’s hard to see how political risk insurance would cover the euro going away,” said John Vasily, partner and co-chair of the financial institutions group at law firm Debevoise & Plimpton LLP in New York. “It is good to cover risks known at the time you take out the policy, but in my experience political risk insurance doesn’t truly cover unknown events.”
Coverage against political risk is a relatively small corner of the insurance market. Some brokers estimate that companies globally have purchased less than $1 billion of coverage for Greek risk.