From the Secretariat

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1 Volume 3, Issue 2, March 2008 ICISA Herengracht BS Amsterdam The Netherlands Tel: +31 (0) Fax: +31 (0) The ICISA newsletter is published bi-monthly. Comments and contributions are welcome and may be sent to Inside this issue: New subsidiaries Members 2 Accounting & Regulatory Solvency Committee II postponed 23 Spring Meetings Half year results 3 4 Member results Converium now SCOR 5 Solvency II 5 Coface Arena in Mainz Preview AGM From the Secretariat A number of activities have taken place since the last edition of this newsletter. The main event was of course our Spring Meetings 2008, which were held in Lisbon. Thanks to the excellent organisation provided by CO- SEC some 70 delegates enjoyed fruitful and informative committee meetings. Further information on these meetings may be found on page 3. ICISA s Management Committee met on 26 March. The committee focused on preparations for the 66th General and Associated Meetings in Vienna, as well as on the finances of the association. Membership applications were reviewed as were proposals to amend ICISA s statutes and regulations to better reflect present day antitrust compliance. The Solvency II Expert Group met on 7 March and reviewed the many issues this working group is dealing with on behalf of the membership. The group thanked its chairman Jean-Francois Decroocq from Euler Hermes for his effortless contributions to the Solvency II project and elected Jan Piekoszewski from Atradius as its new By: Rob Nijhout, Executive Director chairman for the period 2008/2009. During March a new committee was founded: the Accounting and Regulatory Committee. The committee will co-ordinate review of international accounting standards proposals and implementation. The first meeting of this new committee is scheduled for 15 May For more information please see page 2. On 1 April 2008 ICISA will commemorate its founding on 1 April Our 80th anniversary is highlighted throughout the year while the main celebration is planned for November. On photo: Hotel Pestana in Lisbon

2 Swiss Re in Brazil and Iran Picture: the flag of Iran Swiss Re has made the decision to withdraw from Iran. By doing this, Swiss Re follows in the footsteps of several other financial service companies. The questions now is if Iran will still be able to raise sufficient reinsurance capacity. A spokesman from Swiss Re, said: With respect to the renewal of business in Iran we have decided, for the time being, not to write business in this country for We will keep our appetite for Iranian business under review going forward. At the same time, the company upgraded its presence in Brazil. Mr Beat Strebel, Head of Latin America for Swiss Re said that the company is to become an admitted carrier in Brazil. After having an office in Brazil for 12 years now, the company is hoping to open an office in Sao Paolo as well. Source: Accounting & Regulatory Committee of ICISA Page 2 On 15 May 2008 the ICISA Accounting & Regulatory Committee will hold its inaugural meeting. The Accounting & Regulatory Committee (ARC) has been set up for several reasons: - to ensure a common interpretation of accounting standards by the industry; - to review any proposed changes to accounting standards; At the beginning of March 2008, Atradius has published the results of a survey conducted among 200 companies of different sizes and industry sectors on the payment risks in Turkey. A press release published by the Atradius states that 70 to 80 percent of the companies in Turkey expect a negative impact of the credit crisis. Half of the companies surveyed is afraid the crisis will affect their own business. Mr Isidoro Unda, CEO of - to be the responsible advisory body for the application of accounting principles; - to liaise closely with the Solvency II Expert Group; - to co-ordinate and ensure a common message from our industry. Membership of the Accounting Committee is open to all Members. The committee will meet once every quarter. Atradius, stated: The survey results confirm our estimation that companies will find it more and more difficult to bridge preliminary financing for supplier credits. In these times, credit insurance is more important than ever, not only in order to protect oneself against nonpayment, but also to improve one s own credit worthiness. ICISA Members wishing to join the ARC can indicate their wish on the Committee Membership forms, which have been sent to all Member companies. Please note that the deadline for Committee Membership registration is 18 April Atradius opens office in Turkey and publishes survey results With our new branch in Istanbul we can now offer optimal support to Turkish companies. Atradius sees great potential in the Turkish market, since, among other things, the number of advanced payments from Germany, Turkey s most important export market, more than halved between 2006 and 2007 in Germany. Source: Atradius

3 ICISA Spring Meetings 2008 well attended With 70 delegates, the ICISA Spring Meetings 2008, held in March in Lisbon, Portugal, were well attended. The event was hosted by COSEC. The meetings and social programme received high marks, according to the survey conducted among the delegates to the meeting. Mrs Teodora Cardoso, economist and advisor to the BPI Bank, addressed the Joint Committee Meeting as the main Guest Speaker. She spoke of the effects of the subprime crisis and the ensuing credit crunch on the European economy. Meetings of the Committee of Underwriters, the Credit Insurance Committee and the Surety Committee were held in parallel sessions and allowed specialist experts to exchange experience and information. Torre de Belém, Lisbon Euler Hermes starts business in Colombia At the end of February 2008 Euler Hermes launched its newest subsidiary: Euler Hermes Colombia. The office is located in Bogota. Mr Clemens von Weichs, Chairman of the Board of Euler Hermes, said: Latin America is a very dynamic region and we are happy to be able to strengthen our network of offices. The Subsidiary for Munich Re in Brazil Now that the Brazilian reinsurance market is open, Munich Re will be represented by a subsidiary in São Paolo, Brazil. According to the company, this subsidiary gives the best possible market access for Munich Re. Mr Georg Daschner, the Management Board Member of Munich Re responsible for Latin America, said: We are very pleased that the Brazilian market has been opened for foreign re- opening of Euler Hermes Colombia is a further step in our strategy to help our clients in their business development toward regions with a very high economic growth potential, and more specifically in Latin America. Euler Hermes Colombia will make it possible for Colombian clients to access the insurers. Now we can offer reinsurance protection to primary insurers in Brazil in all lines of business and provide them with Munich Re Group s entire range of services. This creates promising new business opportunities for us. Munich Re already had a representative office in São Paolo for the last ten years. The company is already familiar with the market conditions in Brazil. Mr Daschner: company s extensive international network, while Euler Hermes will provide them with receivable management services. The clients can also benefit from the company s underwriting presence in the region. After Mexico, Brazil and Argentina, Euler Hermes Colombia is the fourth Latin American subsidiary for Euler Hermes. We will succeed in participating appropriately in the expected expansion of the market. With premium income from primary insurance of around USD 27 billion, Brazil is the largest insurance market in Latin America. Now that the Brazilian reinsurance market is open to all foreign reinsurers, the market is expected to grow rapidly. Source: Brazil Source: Page 3

4 Credit Insurance & Surety in the News Global Trade Review In their latest edition Global Trade Review has published an article on the ICISA Spring Meetings 2008, held in March in Lisbon. The press release of the Spring Meetings 2008, published jointly with host COSEC, can be found on Secretariat News Member company s results over 2007 Summary of IFRS Those looking for a summary of International Financial Reporting Standards are referred to an article by Ian Dilks and Francesco Nagari of PricewaterhouseCoopers. The authors discuss how existing standards fall below expectations and the opportunity presented by IFRS Phase II for a new start. For complete article, please visit: Secretariat News Page 4 Since the last ICISA Newsletter, a number of ICISA Member companies have published their results. QBE announced record results over The operating profit after tax for the year 2007 rose 30% to USD 1,925 million. The gross written premium went up 20% to USD 12,406 and the net earned premium increased by 25% to USD 10,210. Mr Frank O Halloran, QBE s CEO, stated in a press release: Our excellent underwriting, investment and operating results were ahead of our targets. This was despite the substantial appreciation of the Australian dollar, lower overall average premium rates, claims from twenty one insured natural catastrophes around the world compared with five last year and volatile investment markets. He also said: We continue to investigate a number of acquisition opportunities for growth in 2008 and beyond. Full release can be found on On 19 March Coface Holding published the company s end year results over the year Coface Holding was created in July 2007 and brings together the trade receivables division of Coface and Natixis Factor. The company reported a 7.8% increase in turnover, a 36% rise in net earnings and a 15% increase in operating income. Coface Holding achieved nearly 60% of its consolidated turnover outside France. All geographical areas are experiencing growth except for Great Britain. The main markets are France, Germany, Italy and the USA. Loss ratio was reported at 42%, with a loss ratio in factoring of 7% and in credit insurance of 49%. Mr Jerome Cazes, CEO of Coface Holding, stated: The loss ratio in 2007 is fine, for a 5th year in a row. However, we foresee an increase for More information can be found on Swiss Re has reported their results for the year Mr Jacques Aigrain, the company s CEO, said: Driven by an outstanding performance across our key businesses, we delivered the second-best result in Swiss Re s 144-year-history. While the company reported a strong net income of CHF 4.2 billion, they reported a return on equity of 13.5%. Mr Aigrain commented: Our earnings power is strong and we look to the future with confidence. For full release, please visit

5 Munich Re and pandemic risks Munich Re has for the first time placed pandemic risks on the capital markets. Amounting to USD 1.5 billion, this bond programme was established by the company for the transfer of extreme mortality risk to the capital market. According to a press release issued by Munich Re, this programme designed to protect the company against large losses deriving from an exceptional rise in mortality rates after major pandemics or similar events across the United States, Canada, England and Wales, and Germany. Full release can be found on Mapfre to acquire US Commerce Group By the end of March 2008, Mapfre hopes to have finalised the acquisition of US Commerce Group. The acquisition will cost Mapfre USD2.2 billion. Mapfre has stated that its international expansion had been an important part in the company s 20% rise in net profits to EUR731 million in Mapfre already has a presence in the USA since 1993, with offices in Florida, New Jersey and Puerto Rico. Besides that, Mapfre is one of the most important players in the Latin American region. Source: Insurance Day Captive industry to lobby on Solvency II To avoid their business model being penalised after the outcome in 2012, the captive industry will lobby to negotiate more favourable Solvency II requirements in April Compared to commercial companies, the captive industry has a limited spread of risk, so there is a chance to be penalised by the Solvency II system. The disadvantage for EU captives is the high minimum requirement, said Merise Wheatley, Managing Director of Heath Lambert s Insurance Management in Guernsey. Under the European Reinsurance Directive, the minimum capital requirement for a captive reinsurer in the EU is EUR 1 million. If the captive is part of a general insurance business, the captive must at least hold EUR 2.2 million. The CEA, the European federation of insurers and reinsurers, has urged the European Commission to address this issue, with proposals to implement a simplified framework regime. Solvency II causes trouble Political negotiations over the SII framework directive are becoming increasingly fraught. The framework is being pulled in two directions by opposing member states that want a risk-based framework or a more conservative approach. The industry is concerned that the directive stalls. Minimum capital requirement and group supervision are issues currently being addressed. More information on Secretariat News.

6 Meeting calendar 1st Accounting & Regulatory Committee Meeting Amsterdam 15 May th General and Associated Meetings Vienna May 2008 Autumn Meetings 2008 Amsterdam September 2008 AGM 2008 to be held in Vienna From 28 until 31 May 2008, ICISA s 66th General and Associated Meetings will be held in Vienna. ICISA Members Prisma and Coface Austria will host the event and are planning an interesting and also enjoyable few days. The meeting will focus on the effects of the credit crisis on our industry and its customers, Basle II and Solvency II, the consequences of an increase in demand for commodities, buyouts and hedge funds. Various committees will report on their work and the many lobby activities of the association will also be reviewed. Delegates to the meeting will elect a new President and Vice President of the association for the period 2008/2009. An attractive social programme has been organised, that focuses on the many treasures Vienna and Austria offer. The association s 80th anniversary will also be com- Delegates can still register for these meetings. The invitation (FILE ) and registration form (FILE ) can be found on Registration closes on Monday 5 May Spring Meetings 2009 Poland March 2009 Appointments and Announcements ICISA Catalogue of Credit Insurance Terminology - update The ICISA Catalogue of Credit Insurance Terminology proves to be well appreciated. While the Catalogue was published as recent as June 2007; now, nine months later, almost 3100 copies have been distributed, of which around 800 during the first months of At the end of 2008, a second expanded edition of the Catalogue will be published. Next to the English version, work is finalising on translations into German, French, Italian and Spanish. These editions will be published in the third quarter of Afianzadora Latinoamericana new Member of ICISA In January 2008, ICISA welcomed Afianzadora Latinoamericana from Argentina as our newest Member. With the joining of Afianzadora Latinoamericana ICISA now has 40 member companies. Mr Peter Dorscheid The ICISA Secretariat received the very sad news that Mr Peter Dorscheid has passed away. Mr Dorscheid was Executive Manager International Association Contacts of Euler Hermes Kreditversicherungs and the main liaison at Euler Hermes for all matters related to ICISA. New head office for Atradius From April 2008 the head office of Atradius will be located in the Riekerpolder in Amsterdam. The new office is situated close to Schiphol Amsterdam Airport. Their new address is: David Ricardostraat JS, Amsterdam the Netherlands addresses, telephone- and fax numbers remain the same.