Securing credit insurance in uncertain times

Transcription

1 Securing credit insurance in uncertain times

2 Agenda The importance of credit insurance in protecting the commercial interest How can it help with vetting (new) clients, ensuring contracts are fulfilled and payments are made? How does it work on a global level? What innovative products can the bigger multinational call upon when operating a different regions? What options are open to small and medium-sized companies Is credit insurance too costly or complicated? International Recycled Aluminium Conference Berlin 2

3 Agenda The importance of credit insurance in protecting the commercial interest How can it help with vetting (new) clients, ensuring contracts are fulfilled and payments are made? How does it work on a global level? What innovative products can the bigger multinational call upon when operating a different regions? What options are open to small and medium-sized companies Is credit insurance too costly or complicated? International Recycled Aluminium Conference Berlin 3

4 Credit Insurance protection at a glance Customer Financing Receivables Credit Insurance Contract Cover of Non-Payment Risk PROTECTION TRADE DEAL Delivery of Goods and Services Credit Terms Agreed Extra security provided by using credit insurance - Bank can be beneficiary of the policy The Credit Insurance Triangle Insurer ASSESSMENT Approval of Credit Limits in Favour of the Insured Buyer International Recycled Aluminium Conference Berlin 4

5 Multible Benefits NON/SLOW PAYMENT Buyer Improve financing POLITICAL CURRENCY Customer Enhanced credit management INSOLVENCY Cashflow International Recycled Aluminium Conference Berlin 5

6 Benefits of Credit Insurance Increase your sales By providing longer payment terms By entering into new markets on competitive terms Identify potential customers Move at speed Neutral third party opinion reduces internal conflicts Comprehensive data base allows quick decisions Above 100 million companies in the data base Automatic decision process High risk acceptance International Recycled Aluminium Conference Berlin 6

7 Benefits of Credit Insurance Protect your balance sheet 80% of turnover comes from 20% of your customers Improve cash flow Improve your income Additional turnover to compensate a loss 2,500, ,500, ,000, ,500, ,000, , , ,250, Don t waste capacity Huge sales effort is needed to compensate a loss Loss at a profit margin of 4% at a profit margin of 2% International Recycled Aluminium Conference Berlin 7

8 Benefits of Credit Insurance Enhance your credit management Unbiased, third party credit opinions Continuous monitoring of buyers Reduce your credit investigation costs Collections Easier Forecast Improve your financing Reduce concentration risk Increase the pool of eligible receivables Increase advance rates Reduce interest rates Strengthen client relationships; you can offer better financing terms in the knowledge you can obtain funding International Recycled Aluminium Conference Berlin 8

9 Agenda The importance of credit insurance in protecting the commercial interest How can it help with vetting (new) clients, ensuring contracts are fulfilled and payments are made? How does it work on a global level? What innovative products can the bigger multinational call upon when operating a different regions? What options are open to small and medium-sized companies Is credit insurance too costly or complicated? International Recycled Aluminium Conference Berlin 9

10 Industry figures Insured exposure increased to a record 2 trillion Euro Press release ICISA 10 th of June Representing ~ 15% of world wide trade Estimation Premium decreased by 4% to 5.89 billion EUR Press release ICISA 10 th of June Claims decreased by 2.5% to 2.88 billion EUR Press release ICISA 10 th of June Stabilised claims ratio in 48,8% Press release ICISA 10 th of June International Recycled Aluminium Conference Berlin 10

11 Comprehensive ICISA Network 50 members across the world International Recycled Aluminium Conference Berlin 11

12 Expertise and Experience Experience in providing credit insurance e.g. > 85 years > 100 years > 75 years Comprehensive buyer database e.g 100 million 40 million 75 million High Speed of Service e.g. % of credit limit decision within 48 hours 87% 85% 85% guess International Network Local presence in no. of Countries ICISA members world wide 50 International Recycled Aluminium Conference Berlin 12

13 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Deckungsvolumen Schadenaufwand 07/08-08/09 Schäden/Deckungsvolumen 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Inflow Outflow RS Outflow Unrated P UBL Buyer Rating Class Buyer review principle supporting your Credit Management Economic Research Low risk High risk Country Committee Credit assessment individual buyer (group) Trade Sector Committee Low risk High risk Group Risk Management Default risk per rating class Exposure (Millions) Buyer portfolio Year to Date Underwriter Key principle: independent credit assessment of and individual buyer (group) The current Economic Cycle sets the frame for the anticipated chance and risk profile per buyer risk International Recycled Aluminium Conference Berlin 13

14 Risk Services within Atradius is much more Special Risks Intensive care for determining strategy of deteriorating risks Collection Collecting outstanding debts Claims The moment of truth Key Account Underwriting Central liaison between customer and buyer underwriting with the aim to optimize all credit limit decisions Buyer Underwriting Close to the buyer credit limit decisions, Single Ownership principle, information gathering, sector analysis, buyer visits International Recycled Aluminium Conference Berlin 14

15 Credit Management Support Online Tools Portfolio Management Tools Ledger to Ledger Buyer Ratings 100 DEFAULT HIGH RISK LOW RISK Publications International Recycled Aluminium Conference Berlin 15

16 Agenda The importance of credit insurance in protecting the commercial interest How can it help with vetting (new) clients, ensuring contracts are fulfilled and payments are made? How does it work on a global level? What innovative products can the bigger multinational call upon when operating a different regions? What options are open to small and medium-sized companies Is credit insurance too costly or complicated? International Recycled Aluminium Conference Berlin 16

17 Think global, act local Country Specifics, Markets, Products Or One tailored Programme Wide range of products locally and globally Adaption of country specifics like jurisdiction, language, culture and local conditions Adaption of trade sector specifics Service teams across the world Buyer Underwriting close the buyer country Customer Service close to the customer country One IT platform allows central or local control Truly seamless, tailored and integrated International Recycled Aluminium Conference Berlin 17

18 Products Trends Top-Up Products Stimulated by cover withdrawals Demand was driven by policyholders Other product features for optimising cover Product features as a notice period for withdrawals, delayed cancellation and extended grace periods Claw back insurance cover (Germany) Non-Cancellable credit insurance products Withdrawal without notice period increased awareness of non-cancellable credit insurance products High attention for non-cancellable credit insurance products in the US and was further accelerated by customer demand Hybrid Products; London and the traditional market are moving closer together SME Policies International Recycled Aluminium Conference Berlin 18

19 Agenda The importance of credit insurance in protecting the commercial interest How can it help with vetting (new) clients, ensuring contracts are fulfiled and payments are made? How does it work on a global level? What innovative products can the bigger multinational call upon when operating a different regions? What options are open to small and medium-sized companies Is credit insurance too costly or complicated? International Recycled Aluminium Conference Berlin 19

20 SMEs are in the focus Challenges Loss absorption capabilities are limited A small limit can become a key limit A small loss can become a catastrophe Cash is King Less credit management expertise available Lower administration capacity to maintain the policy Initiatives Various simplified products are available in the markets From credit insurer themselves or with cooperation partners Adjusted to the needs Specific small buyer underwriting initiatives Different distribution channels Credit insurance for SME is even more important International Recycled Aluminium Conference Berlin 20

21 International Recycled Aluminium Conference Securing credit insurance in uncertain times Berlin, 18 th of November Thomas Dietz Executive Manager Global and Special Products Germany, Central and Eastern Europe