Q&A with Adrian Jones
Senior Underwriter of Trade Credit, Political Risk & Surety and Head of Strategy Asia & ME, Trade Credit. T
Senior Underwriter of Trade Credit, Political Risk & Surety and Head of Strategy Asia & ME, Trade Credit. T
How is the current global political and economic climate impacting demand for trade credit insurance?
Given the level of uncertainty across the globe, both politically and economically, the trade credit industry is experiencing an increased level of interest in its products. We are seeing a strong flow of new business enquiries at Markel, combined with demand for bespoke, specialist products as clients require ever more sophisticated solutions.
What are the regions and industries which are seeing the most rapid growth?
Markel is a specialist underwriter and so we are focused on particular business segments. Within these we are seeing a rise in demand for excess of loss solutions driven by an increased risk perception, as a result of geo-political uncertainty, contraction in appetite in the whole-turnover markets and a growth in financing solutions, which require the use of credit insurance as a capital management, exposure management tool and a risk mitigant.
Outline recent developments that have been seen in terms of product development to meet new needs?
In recent years, Markel’s product range has evolved to take into account the increase in funding requirements and non-trade designated non-payment coverage, as well as structured policies and diverse solutions. Our unique ability to combine expertise across the trade credit, political risk and surety products enables us to design complex solutions for our clients.
What impact will potential trade wars between the US and China as well as the UK’s exit from the EEA have on demand for trade credit products?
These are both a positive, in terms of potentially stimulating demand, as companies perceive a higher level of risk in a changing environment, but also a negative in terms of higher risks as that environment changes. The resulting contraction in global trade will undoubtedly impact the credit quality across a range of industries, potentially increasing the level of insolvencies and resultant bad debts for the industry.
Do you see the demand for trade credit products as underpinnings for financings likely to continue to grow?
Yes, a significant number of policies are now driven by the need for trade credit insurance to support bank lines and provide line capacity. We see this sector of the market growing exponentially.
Why has penetration in the US and Asia been so limited compared with Western Europe?
Historically the distribution in the US market has been driven by tied agents thus lacking the drive for innovation, which we have seen in London. Furthermore, there has been no significant development of bank distribution channels and a greater appetite for risk retention than we would expect to see in Europe. If you add to this a lack of understanding as to what the products can provide in both Asia and the US, we begin to understand why the overall penetration has been lower. However, the industry in both markets is evolving and will continue to be rectified with increased broker and insurer engagement with prospective clients.
Where can the industry look for new business and how should it go after it?
There are opportunities across all regions and industries. At Markel we pride ourselves in understanding the client’s needs, combined with an in-depth knowledge of the regulatory environment and a drive to innovate, all of which help us to provide a broad range of solutions that are driven by the changing demands of our marketplace.
Markel is a specialist underwriter and so we are focused on particular business segments. Within these we are seeing a rise in demand for excess of loss solutions driven by an increased risk perception, as a result of geo-political uncertainty, contraction in appetite in the whole-turnover markets and a growth in financing solutions, which require the use of credit insurance as a capital management, exposure management tool and a risk mitigant.
Outline recent developments that have been seen in terms of product development to meet new needs?
In recent years, Markel’s product range has evolved to take into account the increase in funding requirements and non-trade designated non-payment coverage, as well as structured policies and diverse solutions. Our unique ability to combine expertise across the trade credit, political risk and surety products enables us to design complex solutions for our clients.
What impact will potential trade wars between the US and China as well as the UK’s exit from the EEA have on demand for trade credit products?
These are both a positive, in terms of potentially stimulating demand, as companies perceive a higher level of risk in a changing environment, but also a negative in terms of higher risks as that environment changes. The resulting contraction in global trade will undoubtedly impact the credit quality across a range of industries, potentially increasing the level of insolvencies and resultant bad debts for the industry.
Do you see the demand for trade credit products as underpinnings for financings likely to continue to grow?
Yes, a significant number of policies are now driven by the need for trade credit insurance to support bank lines and provide line capacity. We see this sector of the market growing exponentially.
Why has penetration in the US and Asia been so limited compared with Western Europe?
Historically the distribution in the US market has been driven by tied agents thus lacking the drive for innovation, which we have seen in London. Furthermore, there has been no significant development of bank distribution channels and a greater appetite for risk retention than we would expect to see in Europe. If you add to this a lack of understanding as to what the products can provide in both Asia and the US, we begin to understand why the overall penetration has been lower. However, the industry in both markets is evolving and will continue to be rectified with increased broker and insurer engagement with prospective clients.
Where can the industry look for new business and how should it go after it?
There are opportunities across all regions and industries. At Markel we pride ourselves in understanding the client’s needs, combined with an in-depth knowledge of the regulatory environment and a drive to innovate, all of which help us to provide a broad range of solutions that are driven by the changing demands of our marketplace.
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