Simplicity Credit Insurance for Small Businesses Broker Management/ Murrow & Tirocchi / December 7, 2015
Go to Meeting Ground Rules 1. Please enter audio pin 2. Please submit questions via chat feature during course of presentation 3. All participants will be muted to ensure a clear line 2
Agenda 1 Introduction 2 Policy Structure & GTC 3 Key Process Overview 4 Takeaways & Next Steps 5 Q&A 3
What is Simplicity? A credit insurance product made for small businesses that helps them achieve: Safe and strategic sales growth Protection from catastrophic bad debt losses Credit function support Enhanced relationship with lenders Easy policy management 4
The Simplicity Customer Profile WHO should consider Simplicity? Small companies with sales between $100k-$5MM seeking cover for domestic and export credit exposure Companies seeking immediate credit protection with low administration WHEN to consider Simplicity? Selling to prospects with sales below $5MM Revisiting former SME applicants who didn t purchase a policy due to cost constraints Speaking to prospects looking for a fixed cost credit protection solution Speaking to current policy holders with decreasing insured sales 5
Key Benefits Client Benefits: Broker Benefits: Product Offering Set pricing No reporting requirements Simple off-the-shelf policy Convenience Apply online Pay by credit card Quick sales cycle Retention & New Business Tool Responds to client needs Revenue Source Standard commission rates Gives you access to new market segment Provides new/junior brokers with a product to sell- low product knowledge required Protection from Euler Hermes Basic cover is standard Enhanced cover available Access to Euler Hermes risk ratings Peace of mind Convenience Quick & low engagement sales cycle Low administration & tacit renewal Trusted Relationships Work with the market leader with whom you already have a relationship 6
Agenda 1 Introduction 2 Policy Structure & GTC 3 Key Process Overview 4 Takeaways & Next Steps 5 Q&A 7
Key Policy Structure Elements Policy Period- one year with tacit renewal Excluded Industries- Factoring Terms of Sale- up to 90 days after date of invoice or 60 days after end of month of invoice Australia Hong Kong Panama Austria Ireland Peru Current List of Countries Covered: Belgium Israel Poland Canada Italy Portugal Chile Japan Singapore Colombia Korea (South) Spain Costa Rica Malaysia Sweden Denmark Mexico Switzerland Finland Netherlands Taiwan France New Zealand United Kingdom Germany Norway United States of America 8
Key Policy Structure Elements Annual Sales on credit terms ($) Premium ($) 100,000 to 600,000 5,425 600,001 to 1,200,000 7,650 1,200,001 to 1,800,000 8,850 1,800,001 to 2,400,000 10,920 2,400,001 to 3,000,000 12,960 3,000,001 to 3,600,000 14,520 3,600,001 to 4,200,000 15,990 4,200,001 to 5,000,000 17,480 Annual Policy Max Liability ($) Buyer Max Liability ($) Basic Cover Enhanced Cover 60,000 6,000 24,000 90,000 9,000 36,000 120,000 12,000 48,000 150,000 15,000 60,000 180,000 18,000 72,000 210,000 21,000 84,000 240,000 24,000 96,000 280,000 28,000 112,000 9
Key Policy Structure Elements- Basic & Enhanced Cover Buyer Grade No Buyer Grade requested Type of cover Insured percentage Basic 60% Grades 1 to 6 Enhanced 90% Grade 7 and NA (Not Rated) Basic 60% Grades 8 to 10 Not covered 0% 10
EOLIS Screenshots 11
EOLIS Screenshots 12
EOLIS Screenshots 13
EOLIS Screenshots 14
Real Life Example Prospect Profile Canned food retailer with $1MM projected sales All domestic buyers What Happened When quoted in 2013, not all limits were approved and the minimum premium offered was $10k which was more than the prospect was willing to pay Prospect did not purchase a policy How Simplicity Would Have Helped Premium would have been $7,650 All buyers would have been covered under Basic Cover making the decision to purchase much easier 15
Key Policy Structure Elements- Basic & Enhanced Cover Example: 1- Basic Cover Example: 2- Enhanced Cover $2,000,000 Insured Sales $2,000,000 Insured Sales Policy Max Liability is $150k Buyer Max Liability is $15k Client has basic cover on all buyers (60% indemnity) Client files a claim for a $45,000 past due receivable Claim payment is made for $15,000 since full 60% indemnity is more than buyer max liability Client exposed for $30,000 on this loss Policy Max Liability is $150k Buyer Max Liability is $60k Client has enhanced cover on all buyers (90% indemnity) Client files a claim for a $45,000 past due receivable Claim payment is made for $40,500 since full 90% indemnity is less than buyer max liability Client exposed for $4,500 on this loss 16
Key Differences in GTC from Domestic Markets Policy Topic Key Differences Definitions & Terminology Losses Covered Coverage Buyer Maximum Liability First Overdue Date Public Buyer Supply/Supplied Invoices raised within 30 days of Supply Protracted Default & Insolvency only Supplies to Buyers when in good standing Shipments By Third Parties in Buyer s country Basic cover at 60% indemnity Enhanced cover available dependent on buyer risk rating (100 max requests per year) 17
Key Differences in GTC from Domestic Markets Policy Topic Key Differences Claim Filing, Loss Payments & Collections Protracted Default filed within 90 days from First Overdue Date Insolvency filed within 30 days of event No Insolvency coverage if Protracted Default filing is missed No option to handle claims Premium Fixed premium based on annual sales band No true-up premium assessed Ability to pay by credit card 18
Key Differences in GTC from Domestic Markets Policy Topic Key Differences Policy Currency Policy covers invoicing in any currency Reporting No Past Due Reporting No Sales Reporting General Conditions Tacit renewal 19
Agenda 1 Introduction 2 Policy Structure & GTC 3 Key Process Overview 4 Takeaways & Next Steps 5 Q&A 20
The App Submission, Quotation & Onboarding Process 1 2 3 4 5 Prospect completes EH Simplicity application EH reviews application, validates information and issues policy EH sends policy documents and invoices Policy holder receives EOLIS login credentials and tutorial from Business Advocate Policy holder pays premium and policy is active 21
Ongoing Policy Management Account Servicing Renewal Process EH Service Team ASD 1 2 Tacit renewal (unless EH or client opts out >60 days prior to policy expiration) EH sends policy documents and invoices EOLIS Claims & Collections 3 Policy holder pays premium 22
Agenda 1 Introduction 2 Policy Structure & GTC 3 Key Process Overview 4 Takeaways & Next Steps 5 Q&A 23
Key Benefits Client Benefits: Broker Benefits: Product Offering Set pricing No reporting requirements Simple off-the-shelf policy Convenience Apply online Pay by credit card Quick sales cycle Retention & New Business Tool Responds to client needs Revenue Source Standard commission rates Gives you access to new market segment Provides new/junior brokers with a product to sell- low product knowledge required Protection from Euler Hermes Basic cover is standard Enhanced cover available Access to Euler Hermes risk ratings Peace of mind Convenience Quick & low engagement sales cycle Low administration & tacit renewal Trusted Relationships Work with the market leader with whom you already have a relationship 24
Simplicity Approval by State as of 11/30/2015 We currently have 73% approval in the US Simplicity is approved in all states except for the following where we are actively working with reviewers Florida North Carolina Kansas Massachusetts Missouri New Hampshire Oregon Texas Vermont Washington 25
Agenda 1 Introduction 2 Policy Structure & GTC 3 Key Process Overview 4 Takeaways & Next Steps 5 Q&A 26
Sarah Murrow Regional Head of Broker Management sarah.murrow@eulerhermes.com 410.753.0632 Kristin Lemieux Tirocchi AVP Broker Manager kristin.tirocchi@eulerhermes.com 410.753.0687 Thank you for your attention.