Welcome to issue 58 of Credit Insurance News Digest, 16 July 2015. This issue is kindly sponsored by Atradius.IndexCredit Insurance News and ReportsCredit insurers may have already suspended cover for shipments to Greece due to the Grexit risk. Lexology has published an article, 'Grexit” – insurance update', which considers some of the implications of a 'Grexit'. This includes the likelihood that many well-known products (such as political risk, currency coverage and trade credit), will become unavailable for Greek based risks. Indeed, the article comments, "it is understood that certain credit insurers have already suspended cover for shipments to Greece due to the Grexit risk." To read the article go to http://www.lexology.com/r.ashx?l=7NZL2UE.Top ten global insolvencies reinforce the value of trade credit insurance. The second edition of Aon's Insights Asia newsletter contains a list, compiled by Euler Hermes, of the top 10 global insolvencies in 2014 by company size. 40% of the companies listed are in Asia, 30% are in the US, with the remaining companies in Spain, Germany and the UK. Aon advises that the list acts as a timely case study to reinforce the use and value of trade credit insurance; especially as, in the case of OW Bunker (no 3) and Phones4U (no 8), "the speed with which these significant organisations failed was alarming." To obtain a copy of the Newsletter, register your details at http://www.aon.com/singapore/newsletter/trade-credit/2015/default.jsp.UKEF suspends Greece Cover. GTR has published an article, 'UKEF suspends Greece Cover', which reports that UK Export Finance has suspended its guarantees for trade deals with Greece in light of the uncertainty surrounding the country’s eurozone membership. It is unclear whether guarantees already agreed will be affected. According to the agency’s 2014/15 annual report, its exposure to Greece currently stands around £2 million, down from around £5.5 million in 2013/14. In addition, Euler Hermes' chief operating officer Philip Rossberg told GTR: “We are not formally off-cover, but whilst capital controls remain in place and the ECB-funding lifeline to the Greek banks continues to be effectively clogged up, it is rather hard to see how new exposure could actually be written.” To read the article go to http://www.gtreview.com/news/europe/ukef-suspends-greece-cover/.Atradius advises that the first half of 2015 saw a 25% rise in trading losses among Irish firms linked with the UK building sector. Irish Examiner has published an article, 'Irish builders hit by UK rout', which advises that Irish building supply firms are being severely hit through non-payment for services by a fresh wave of insolvencies hitting the UK construction sector. According to Atradius, the first half of 2015 saw a 25% year-on-year rise in trading losses among Irish firms linked with the UK building sector, and, as a result, it has paid out nearly €500,000 in claims in the last month. “Firms are continuing to fail seven years on from the onset of the recession, which is a worrying trend for any supplier,” said Simon Rocket, senior manager for risk services at Atradius. “Looking forward, the British construction sector has been given a ‘poor’ forecast in Atradius’s latest economic report, with economic weakness continuing to underpin the industry.” To read the article on Irish Examiner's website go to http://www.irishexaminer.com/business/irish-builders-hit-by-uk-rout-342606.html.The trade credit insurance industry could "multiply by five and maybe more without still reaching full equipment of insurable transactions." The latest issue of The ICISA Insider includes an interview with Patrice Luscan, Coface's new representative to ICISA's Management Committee, in which Mr Luscan advises that the claims ratio in Europe should remain relatively good for the largest trade credit insurance private portfolios. However, he warns that elsewhere (notably, Russia, Brazil, China) the credit insurance industry may have to manage some claims turmoil while, because of a soft European market, being given less revenue by its clients. "On the topline, we all hope the growth areas will more than compensate the premium erosion the industry sees in the historic markets." Looking ahead, Mr Luscan advises that the industry's capacity for growth remains substantial, “this industry could multiply by five and maybe more without still reaching full equipment of insurable transactions. Trade receivables are the unique asset class where the untapped potential is so big.” To view the ICISA's publication go to http://www.icisa.org/the-icisa-insider-editions/files_content/The%20ICISA%20Insider%20-%20July%202015.pdf.A "mismatch between risk and price": Trends in trade credit insurance. World Commerce Review has published an article, 'Trade Credit Insurance', in which Robert Nijhout, Executive Director of International Credit Insurance & Surety Association (ICISA) provides an in-depth analysis of trends in the trade credit insurance market; noting, for example, the frequent mismatch between risk and price - particularly in markets where the product is well known. "It is a buyer’s market and as long as capacity remains ample and risk appetite continues, this trend is not likely to change anytime soon." He also advises that during the recent financial crisis, trade credit insurance proved its added value, with over €9 billion in claims paid in the course of two years on unpaid receivables that otherwise would not have been compensated. "Many insured companies would not have survived had it not been for this trade credit insurance compensation." To read the article on WCR's website go to http://www.worldcommercereview.com/html/nijhout-trade-credit-insurance.html.Euler Hermes finds that companies are stretching payment terms to fund business growth. According to Euler Hermes, the global payments chain is coming under increasing pressure due to the increase in the number of days it takes to be paid for goods and services, and the challenges of economic slowdown in emerging markets and expansion in advanced economies. The Euler Hermes research, 'Payment Behaviour – Who’s Paying The Piper', anticipates that the global average DSO in 2015 will remain unchanged at 66 days for the fourth consecutive year, but notes that there are marked differences between the developed and emerging markets, and across individual sectors and companies. Ludovic Subran, chief economist at Euler Hermes, commented: “Companies in emerging markets are paid five days later than those in advanced economies, when they used to be paid 10 days ahead of them in 2007. To read Euler Hermes' news release with a link to the full report go to http://www.eulerhermes.com/mediacenter/news/Pages/press-release-eh-dso-080715.aspx.Note: Euler Hermes has produced a Global DSO heat map, which is also available as a high resolution file.Nexus CIFS advises that 'scale-ups' are the drivers of the UK economy. Nexus CIFS has published an article, 'Move over start-ups, it’s ‘scale-ups’ we should be investing in', which reports that the buzz-word for companies that are going to get the UK economy moving is ‘scale-ups’ (i.e., enterprises with average annual growth in employees or turnover greater than 20% over a three-year period). CIFS advises: "'The Scale-Up Report on UK Economic Growth’ published at the end of last year explains how a boost of just 1% to our scale-up population should drive an additional 238,000 jobs and £38 billion to the economy within three years. In the medium-term, we stand to benefit by £96 billion per annum and in the long-run, if we close the scale-up gap, then we stand to gain 150,000 net jobs and £225 billion by 2034." To read Nexus CIFS' article go to http://www.creditindemnity.com/news-and-comment/detail/move-over-start-ups-its-scale-ups-we-should-be-investing-in.Credit insurers are bracing for a spike in domestic bankruptcies in Greece. Marsh has published an article, 'Greece’s financial troubles could disrupt credit insurance market', in which Evan Freely, Marsh's Managing Director, Global Practice Leader – Credit Specialties, reports that credit insurers are bracing for a spike in domestic bankruptcies in Greece and have taken steps over the last year to limit their exposures. As a result, he warns that "companies with customers in Greece will find it increasingly difficult to purchase credit insurance." He also notes that an additional concern for credit insurers may be 'contagion risk'; that is, if Greece defaults and then exits the Eurozone, it will likely spur more questions about the health of other EU members that have struggled economically in recent years. "The danger for Eurozone members has long been the threat of a larger European country also rejecting fiscal reforms and austerity, creating a contagion effect." To view the article on Marsh's website go to https://www.marsh.com/us/risk-in-context/greece-financial-troubles.html.Coface warns that Australia will be impacted by the slowdown in Chinese growth. Insurance Business has published an article, 'Leading insurer gives Australian warning', which reports that Coface has warned that the economic troubles currently plaguing China could have a detrimental effect on most economies in the Asia Pacific region, with Australia expected to be one of the hardest hit. Rocky Tung, Coface Group economist in Hong Kong, said that Australia is one of the more vulnerable markets in the Asia Pacific region thanks to its links to China. “Chinese economic growth is slowly descending and is currently at around 7%. This normalisation of growth rates means that Chinese companies are becoming more vulnerable due to high levels of debt and continuing production overcapacities in many sectors,” Mr Tung said. “The economies of the region, particularly Australia, are impacted by the slowdown in Chinese growth and also by the drop in the demand for raw materials.” To read the article go to http://www.insurancebusinessonline.com.au/news/leading-insurer-gives-australian-warning-202619.aspx.
US Exim closure grows exporters’ concerns. GTR has published an article, 'US Exim closure grows exporters’ concerns', which advises that all hopes of seeing US Exim re-authorised before the June 30 deadline vanished last Friday when Congress went on a week-long summer break - having not even set a date for the vote. As a result, the US’ export credit agency's website now displays an 'Authority has lapsed' message. While it is likely that the US Exim re-authorisation bill will be packaged with a bill on transportation infrastructure spending, and the agency could be re-authorised by the end of July, the current uncertainty is at best disruptive and could, GTR advises, limit Exim's US customers' (particularly SMEs) ability to secure new business for a month and/or even prevent them from renewing existing business. To read GTR's article go to http://www.gtreview.com/news/americas/us-exim-closure-grows-exporters-concerns/.
Atradius' Andreas Tesch advises that the trade credit insurance industry must evolve and find new ways to appeal to a constantly changing business environment. World Commerce Review has published an article, 'Managing Risk, Enabling Trade', in which Atradius' Chief Market Officer, Andreas Tesch, describes the 90 year history of Atradius and the current range of solutions offered. Mr Tesch comments that credit insurance has been serving the world for more than 100 years and is the backbone of trade, helping both buyers and sellers grow their companies. "However its penetration rate is relatively low. To expand, the industry has to evolve with the world and find new ways to appeal to a constantly changing business environment. Not just in the way it markets itself, but in the way it serves businesses." He suggests that this means new product variations, new service offerings, constant technological advancements and new ways of meeting the needs of businesses that have not yet discovered the benefits of credit insurance. To read the article go to http://www.worldcommercereview.com/publications/article_pdf/977.
New dynamics will change the face of the credit insurance industry. The latest issue of The ICISA Insider includes an interview with Michael Frank, CEO of Garant, who predicts that in a globalised economic environment demand for trade credit insurance products will remain strong, although ample capacity will result in keeping average prices stable at the lower end. According to Mr Frank this will lead to a growing cooperation between banks and trade credit insurers. “Driven by ever stricter capital requirements for banks, collaboration between banks and credit insurers is likely to continue its strong growth over the last years." Mr Frank also notes that the Solvency II regime, with its "deluge" of administrative and regulatory costs, will impact smaller insurers and may foster further consolidation among the industry. To view the ICISA's publication go to http://www.icisa.org/the-icisa-insider-editions/files_content/The%20ICISA%20Insider%20-%20July%202015.pdf.
Atradius gives the UK technology businesses a 'fair' forecast in its latest sector report. Atradius predicts that 2015 will continue to see a decline in PC sales, while tablet and smartphone sales will continue to grow. However, both are getting closer to saturation and margins remain slim due to the dominance of key players Samsung and Apple. In addition, Atradius warns that British ICT businesses will face stronger competition from their European peers, mainly due to the strengthening of the pound, putting pressure on sales prices and margins. Jason Curtis, Head of Corporate Accounts at Atradius, said: “While many larger businesses can count on economies of scale, smaller players generally face more troubles – unless they are highly innovative or well-established in niche products. In ICT, product life-cycles remain short and smaller businesses’ sustainability is driven by innovation and the ability to develop new products and bring them quickly to market.” To read Atradius' report go to http://global.atradius.com/creditmanagementknowledge/market-monitor/latest-market-monitor.html.
In praise of non-cancellable credit insurance limits. Markel has published a Q&A session with Simon Philpin, Senior Underwriter - Trade Credit, in which Mr Philpin advises that the biggest change he has seen in the industry since his career began is the introduction of non-cancellable limits and the increasing amount of insurers who provide this service, Markel included. He comments: "Historically the industry has withdrawn the insurance provided for a customer if they deem the business they are insuring is deteriorating. To me this doesn’t support a partnership with your client. Non-cancellable limits provide certainty to the customer and peace of mind." To view the Q&A session go to http://www.markelinternational.com/regions/london-market/Markel-News-July-15/Trade-QA/?dm_i=19BZ,3ISCP,C20B4B,CMFBO,1.
Credit Insurance: not just an insurance product. Insurance Business Australia has published a video clip, 'Demystifying trade credit insurance', in which Mark Hoppe, Managing Director of Atradius Australia, explains the nuances of the product and advises how brokers and clients can benefit from trade credit insurance. Mr Hoppe notes that currently "it's a buyers market", with rates at an all time low and levels of cover provided by industry players at an all time high. He also stresses that the product should not be seen as just an insurance product: "there are not many insurances where you can sit in front of somebody and say look, we can help you grow your business . . .You need to give that message of how much income you can bring in by having the insurance - rather than just the initial outlay." To view the clip go to http://www.insurancebusinessonline.com.au/tv/.
Only 5% of business transactions in the world are credit insured. In its 2014 Activity Report, Coface's CEO, Jean-Marc Pillu, advises that Coface plans to pursue a more aggressive sales strategy in 2015. He comments: "Remember that the credit insurance market is relatively undeveloped, since only 5% of business transactions in the world are insured. This means the market has strong growth potential, which in turn means excellent prospects for us in the coming years." To view Coface detailed Activity report with results per region, go to http://www.coface.com/News-Publications/Publications/2014-Activity-report.
Euler Hermes advises that the German chemicals industry made the right decision by investing in research and development. Economists at Euler Hermes have forecast in their current industry survey that German chemical companies will increase their foreign investment by 17% in 2015 - a rate nearly six times greater than the projected 3% increase in domestic investment spending. The gap between foreign and domestic investment will widen even further in 2016, with a 9% increase abroad and only a 1% increase in Germany. "German chemical company profit margins will rise by 0.5 percentage points to 12.6% in 2015,” said Ludovic Subran, chief economist for Euler Hermes. “In 2009, profits rose by 7%. The recent increase clearly shows that German chemical companies made the right decision by investing in research and development." To read Euler Hermes' news release with a link to the full report go to http://www.eulerhermes.com/mediacenter/news/Pages/press-release-eh-report-germany-chemical-industry-300615.aspx.
Solunion launches operations in Peru. Euler Hermes has announced that Solunion, a Euler Hermes and MAPFRE joint venture, has launched a new operation in in Peru. Credit insurance policies will be issued through Mapfre Peru and managed by Solunion Colombia. According to the latest Euler Hermes research, Peru’s economy has had an attractive average annual growth of 6.5% over the past few years, boosted by raw materials prices and external demand, particularly from China. Although activity has slowed, Peru will continue to be one of the countries with the strongest growth rates in the region. To read Euler Hermes' news release go to http://www.eulerhermes.com/mediacenter/news/Pages/press-release-solunion-peru-operations-launch-070715.aspx.
New Industry Publications
Cash Flow Management for Small Businesses. STA International has published a useful new free guide, 'Cash Flow Management for Small Businesses', which gives a detailed overview of the importance of cash flow management and common cash flow 'killers' (late payment, unexpected expenses, not wanting to offend etc), tips for cash flow forecasting and invoicing and a step-by-step guide to getting paid. A section on late payment legislation stresses that the legislation's aim, in addition to giving claimants protection against companies who don’t pay on time, is to encourage those companies to pay on time in the first place and resolve these issues before they occur. However, in those instances where debt collection is needed, this may be free: "A Debt Collection Agency can charge its collection costs to late paying customers and this provides a free-of-charge collection service when they are successful." To obtain a copy of the Guide go to https://www.stainternational.com/small-business-advice/cashflow-guide.
New hardback reference book offers an in-depth guide to credit insurance. ‘A Guide to Trade Credit Insurance’ is a new hardback reference book, written by ICISA from an international perspective, which provides a comprehensive overview of trade credit insurance, including the history of trade credit insurance, trade credit insurance providers, the underwriting process, premium calculation, claims handling, case studies and a glossary of terminology. The book [ISBN: 978-1783084821], priced at £50 / US$80, is published by Anthem Press - click here for more information and to order your copy.
Discounts are available on bulk book orders. Please contact orders@anthempress.comfor further information.
eBook: How to protect, inform & grow your business with trade credit insurance. Aon has published a free ebook which offers an insight into what trade credit insurance is, how it can help companies and protect accounts receivable and the main types of trade credit insurance. For more information and to obtain your copy go to http://www.aon.com/apac/risk/how-to-protect-inform-grow-your-business-with-trade-credit-insurance.jsp.
Coface's Country Risk Conference: Presentation slides. Following its Country Risk Conference in London on 4 June, Coface has published the slides from the presentations given by speakers. These include: 'UK Economic Outlook Post-election' by Andrew Goodwin Lead UK Economist, Oxford Economics; 'European Economy' by Julien Marcilly, Chief Economist, Coface Group; 'Capital Markets & Credit Risk' by Jim Reid, Global Head of Fundamental Credit GI Strategy, Deutsche Bank; 'Geopolitical Risks & their Impact' by Kirsten Parker, Senior Director, Country Risk, IHS. To obtain a copy of the slides go to http://communication.cofaceuk.com/ukassets/images/472/countryrisk2015/CRC%20presentation%20pack.PDF?_ga=1.128287749.824521473.1426337604.
Events and Offers
GTR Asia Trade Finance Week 2015, 7-10 September 2015. Singapore.
GTR Asia Trade Finance Week 2015 will return to Singapore in September to further establish its standing as the largest trade finance gathering anywhere in the world. Enjoying full support and endorsement from IE Singapore, among many more of the market’s leading institutions, the event will bring together regional and global corporates, financiers, regulators and more to discuss trade priorities across the region. With 783 delegates in attendance in 2014, representing 31 countries, this should be a firm date in the diary for anyone looking to conduct trade in Asia. For more information go to http://www.gtreview.com/events/asia/gtr-asia-trade-finance-week-2015/.
Global Commodity Trade Finance Conference 2015, 29 September 2015. Lugano, Switzerland.
GTR‘s Global Commodity Trade Finance Conference 2015 will return to Lugano in September to provide timely insight on the condition of the global trading market and the challenges faced, both in local markets and further afield. Reflecting Switzerland’s role as one of the world’s leading commodity trade hubs, the event will see high level business leaders come together to explore the possibilities of strengthening links and encouraging growth within the global commodity market. For more information go to http://www.gtreview.com/events/europe/global-commodity-trade-finance-conference-2015/.
Mauritius Trade Finance Conference 2015, 1 October 2015. Port Louis, Mauritius.
Benefiting from its strategic location between Africa and Asia, Mauritius is rapidly developing into the primary trade, distribution, re-export and logistics hub servicing intra-regional commerce between the two high-growth geographies, while providing a launching point for local and international companies looking to move into the African trade space. GTR’s Mauritius Trade Finance Conference will survey the opportunities offered to companies and traders by this unique market, assess efforts to further establish the island as an international financing hub, and highlight the key role of the trade finance sector in enabling further growth. For more information go to http://www.gtreview.com/events/africa/mauritius-trade-finance-conference-2015/.
Mexico Trade & Export Finance Conference 2015, 6 October 2015. Mexico City, Mexico.
Building on the success of a growing portfolio of conferences in the Americas, this event will bring Mexico’s leading trade bodies and companies of all sizes (multinationals, mid-cap and SMEs), as well as top financial institutions, together to explore trade and export finance opportunities available in the region in today’s economic climate. As always, huge emphasis will be placed on the importance of networking, with numerous opportunities provided throughout the event to engage with key decision makers and establish new business contacts. Delegates will also be given the opportunity to organise private meetings with fellow attendees via the GTR Members Area, our exclusive networking site. For more information go to http://www.gtreview.com/events/americas/mexico-trade-export-finance-conference-2015/.
Receivables Finance Masterclass. 13 October, London.
Effective cash management is essential for any business to thrive in an increasingly competitive marketplace. Receivables purchasing arrangements, in which companies sell their receivables for cash, is becoming increasingly important in providing solutions to cash flow management problems and provides a valuable supplement to loan finance. However, there are important differences between receivables purchasing arrangements and bank debt, and it is essential that both providers and users of this form of finance understand how it operates.
This masterclass is designed for people who already have a working knowledge of receivables purchasing arrangements. It focuses on legal, commercial and practical issues that arise in implementing these structures domestically and internationally. It is important that delegates come armed with questions and an enthusiasm to engage and share experiences. A clear understanding of receivables purchasing and its use in conjunction with loan financing has never been more important. This intensive one-day event will provide the information needed to exploit the opportunities provided by receivables purchasing. For more information go to http://www.bcrconferences.com/events/receivables-finance-masterclass.
Global Trade Development Week. 27-29th October 2015, Ritz Carlton DIFC, Dubai, UAE.
Organised in partnership with the UAE Ministry of Economy, GTDW 2015 will be an unprecedented gathering of 1000 trade leaders from government and the private sector coming to Dubai from over 100 countries. The event will be addressed by 150 speakers whom are some the most influential leaders driving world trade today. GTDW is the world largest trade facilitation event and features a series of specialized trade summits that link key sectors across international trade; including business, banking, customs, corporate real estate, infrastructure, specialized economic zones, supply chain logistics and transport. 'Innovation in Global Trade and Economic Development' is the theme for GTDW 2015, and innovation will underpin discussion in all of GTDWs six trade summits. For further information and to register as a delegate visit: www.kwglobaltrade.com.
Transforming Factoring and Invoice Finance. 17 November 2015, London.
The event is open to all invoice finance, factoring and SME/lending professionals. A great opportunity to learn about the latest trends reshaping business finance and a chance to network with leaders in the industry.
Get ahead of the game by joining BCR in addressing the future prospects and opportunities for the traditional factoring and invoice finance market, as the challenges of the alternative funding providers with their plethora of new platforms, appear to threaten its very existence. For further information go to http://www.bcrconferences.com/events/transforming-factoring-and-invoice-finance.
The future for general insurance in the UK: regulation, competition and innovation. 2 December 2015. London.
Attendees at this conference will consider the future of the general insurance sector in the UK, and key challenges ahead for supporting competition and innovation across the sector. The seminar will present a timely opportunity to examine the industry's regulatory framework, in light of preparation for an operational Solvency II framework in January 2016. It is also timed to consider the impact of a wide-range of policy and regulatory developments impacting on the sector - including implementation of the recent Insurance Act, the Financial Conduct Authority's forthcoming consultation on competition remedies for insurance add-ons and the Competition and Markets Authority's Private Motor Insurance Market Investigation. Sessions will bring out latest thinking on contract law, tackling fraudulent claims as well as consumer protection, developing skills and attracting talent to the sector.
Chris Moulder, Director, General Insurance, Prudential Regulation Authority and Mary Starks, Director of Competition, Financial Conduct Authority have kindly agreed to deliver keynote addresses at this seminar. David Hertzell, Chair, Insurance Fraud Taskforce; Paula Jarzabkowski, Professor of Strategic Management, Cass Business School, City University London; Geraldine Quirk, Partner, Clyde & Co; Dr Alexander Scott, Chief Executive Officer, Chartered Insurance Institute; Max Taylor, Chairman, Islamic Insurance Association of London; Geoff White, Underwriting Manager, Cyber, Technology and Media, Barbican Insurance Group and a speaker confirmed from the Consumer Council for Northern Ireland have also agreed to speak. Lord Davidson of Glen Clova QC, Shadow Treasury Spokesperson has very kindly agreed to chair part of this seminar. Click here for more information.
Supply Chain Finance Summit. 27-28 January 2016. Frankfurt, Germany.
he market for supply chain finance (SCF) is lighting up. For EMEA alone, the market size is estimated to be as high as €17 Billion with an estimated annual growth rate of between 15-30%. This two day event covers the rapidly growing interest in targeting both domestic and cross border opportunities in the SCF space, as well as the increased interest from mid-sized companies now looking to supply chain finance to increase profitability and strengthen supply chains.
Brought to you by BCR, specialist publishers in receivables, factoring and supply chain finance, the conference is open to all finance and supply chain professionals. It is a great opportunity to learn about the latest trends transforming the approach to supply chain management and a chance to network with leaders in the industry.
Treasurers/CFOs, heads of supply chain/procurement from corporates & SME directors attend free of charge. For more information go to http://www.bcrconferences.com/events/supply-chain-finance-summit.
Receivables Finance International - RFIx. 9-10 March 2016, Lisbon, Portugal.
This well established market leading two-day Convention brings together nearly 200 delegates from Europe, the Americas, Africa and Asia, attracted by the quality of speakers, panel discussions and wide-ranging subject matter. The theme for 2016 is being developed now. To get involved, please contact Malou Lindholm, Director, BCR Publishing. For more information go to http://www.bcrconferences.com/events/receivables-finance-international---rfix.
Business Information: Latest Reports and Business Shorts
Terrible start to the Summer for UK retailers. According to BDO’s monthly High Street Sales Tracker, the UK high street has reported its worst June for nearly since 2006, with a 2% drop in year-on-year sales for June. Despite the improving UK economy, retailers are struggling against a combination of falling footfall from domestic and overseas shoppers, and consumer nervousness sparked by the global environment, such as the uncertainty around Greece’s IMF default. Instead, consumers are more likely to spend money on leisure activities like eating out. The like-for-like fall is also the fourth monthly dip of the year so far. While not as severe as March’s 4% drop, consumers are still reluctant to increase spending on the high street. All sectors were hit by the downturn. To read BDO news release go to http://www.bdo.co.uk/press/terrible-start-to-the-summer-for-retailers.
UK showing signs of 'two-tier' growth, as services race ahead of manufacturing. The British Chambers of Commerce (BCC) Quarterly Economic Survey (QES) shows that in the second quarter of 2015 the service sector continued its current trend of steady progress but manufacturing firms reported much weaker growth. While most key national service sector balances recorded small increases in Q2 2015, and are now higher than their average 2007 pre-recession levels, virtually all the key national manufacturing balances recorded declines in Q2 – continuing the slowdown seen in Q1. To read BCC's news release with a link to the full report go to http://www.britishchambers.org.uk/press-office/press-releases/bcc-uk-showing-signs-of-two-tier-growth,-as-services-race-ahead-of-manufacturing.html.
UK growth slows but expectations buoyant. The rate of economic growth slowed in the three months to June, but activity remained solid across the quarter as a whole, according to the latest CBI growth indicator. The survey of 752 respondents across the manufacturing, retail and service sectors showed a reading of +14% in the three months to June, compared with +33% in May. This slowdown was largely due to last month’s fast pace of growth in business and professional services not being sustained. Nonetheless, expectations are buoyant, with respondents anticipating that growth will bounce back in the next three months (balance of +32%). UK manufacturing growth gained a bit of traction, but overall remained moderate, whilst retail sales volumes rose robustly in the year to June, albeit at a slower pace than previously. To read the CBI's news release go to http://news.cbi.org.uk/news/uk-growth-slows-but-expectations-buoyant-cbi/.
Fewer shops close as retail administrations fall 32% in the first half of the year. The number of retail administrations in England has fallen by 32% this year, according to research from Deloitte. In the first six months of this year, 45 retailers entered into administration, compared with 66 in the first six months of 2014. This year’s figure is less than half the total of the 95 retailers that went into administration in the first six months of 2013. Lee Manning, restructuring services partner at Deloitte, said: “After a few turbulent years and something of a clear-out, the retail sector is now benefitting from the calmer waters of a stable economy. In fact, the only well-known retail insolvency this year has been Bank Fashion." To read Deloitte's news release go to http://www2.deloitte.com/uk/en/pages/press-releases/articles/fewer-shops-close-as-retail-administrations-falls.html.
Growth slows in emerging markets, picks up in advanced economies. According to the IMF’s latest update on the World Economic Outlook, moderate growth continues, with global growth forecast to be slightly down for 2015, reflecting an unexpected setback to economic activity in the first quarter of 2015. Growth in advanced economies is forecast to increase from 1.8% in 2014 to 2.1% in 2015 and 2.4% in 2016. In contrast, growth in emerging market and developing economies is projected to slow from 4.6% in 2014 to 4.2% in 2015. The slowdown reflects the dampening impact of lower commodity prices and tighter external financial conditions—particularly in Latin America (e.g., Brazil) and oil exporters. Other factors include rebalancing in China, structural bottlenecks, and economic distress related to geopolitical factors. To read the IMF's news release with a link to the WEO Update go to http://www.imf.org/external/pubs/ft/survey/so/2015/NEW070915A.htm.
Britain’s micro-businesses are owed £16.9 billion in late payments. According to research commissioned by Intuit QuickBooks and carried out by Opinion Matters, Britain’s micro-businesses are owed £16.9 billion by their customers. As a result, many micro-businesses are being forced to rely on debt to shore up their finances; 32% of respondents said they have had to take out loans or rely on credit to pay wages or suppliers. Additionally, the number of customers dragging their feet over payment means that micro-businesses spend an average of 19 working days a year chasing invoices. To view Intuit's Quickbook's press release go to http://www.intuit.co.uk/r/advice-and-tips/quickbooks-late-payments-study-2015/.
The global economy is in transition. The World Bank has released a new publication, 'Global Economic Prospects: The Global Economy in Transition', which warns that developing countries face a series of tough challenges in 2015, including the looming prospect of higher borrowing costs in a new era of low prices for oil and other key commodities. The World Bank Group’s latest 2015 Global Economic Prospects report advises that this will result in a fourth consecutive year of disappointing economic growth this year. Developing countries are now projected to grow by 4.4% this year, with a likely rise to 5.2% in 2016, and 5.4% in 2017. "Developing countries were an engine of global growth following the financial crisis, but now they face a more difficult economic environment," said World Bank Group President Jim Yong Kim. To read the World Bank's news release with a link to the full report go to http://www.worldbank.org/en/publication/global-economic-prospects.
The UK smallest businesses are waiting longer than ever for payment. The smallest businesses are now waiting longer than ever for their invoices to be paid, says the Asset Based Finance Association (ABFA). According to the ABFA, UK businesses with turnovers of under £1 million are now waiting an average of 72 days for payment of invoices – a day more than a year ago – despite the strengthening economic recovery. By contrast, businesses with £500 million-plus turnovers have seen payment waits fall by a day since last year to 47 days. The ABFA also says that the smallest businesses are now waiting an average of 11 days longer for payment than they were even at the peak of the recession. To read the ABFA's news release go to http://www.abfa.org.uk/news/97/Smallest-businesses-waiting-longer-than-ever-for-payment.
Career Opportunities:
Trade Credit Team Head, AIG.
AIG are hiring a Trade Credit Underwriter for both Risk and Commercial.
Key responsibilities: Underwriting and monitoring of key buyer risks to achieve or better budgeted loss ratio. Ensure compliance of AIG underwriting standards, Credit procedures and PC guidelines. Identify risk opportunities to drive new business opportunities in order to achieve PC budget. Develop and maintain broker and client relationships to increase client retention and new business levels. Support PCM in meet deadlines for reporting PC strategy and budget development to senior management.
Requirements: Good credit risk background with strong knowledge of international trade and emerging market risk. Financial analysis skills. Knowledge of trade finance. Country risk awareness. Competent in IT systems. Insurance background. Awareness of Trade Credit Underwriting Practices.
To apply please Click here. (Please mention Credit Insurance News Digest when applying).
Trade Finance – Regional Product Specialist (legal) (121837).
Purpose of the role: To manage all legal aspects of new and existing transactions for Trade Finance, including drafting insurance endorsements for Trade Finance transactions and contract drafting and review of documentation (Insurance and Financial) for insurance-backed receivable financing/ pre-export financing.
Key responsibilities: The candidate will be expected to drive negotiation of transaction documents with banks/funders and other interested parties. Manage the legal operational aspects of our new Supply Chain Finance initiative. Liaise with AIG internal legal department. Full working knowledge of Basel III rules on Capital efficient risk mitigants. Completr legal compliance for TF. Work in a team environment. Work on tight deadlines with variable work patterns.
Requirements: Two-year post qualified lawyer (an associate in a [London] law firm) with Structured Finance/banking experience. Mobile with a degree of international travel. Be conversant with Banking/Insurance compliance and audit requirement.
To apply please Click here. (Please mention Credit Insurance News Digest when applying).
Supply Chain Finance – Regional Specialist Credit Underwriter (121645).
Purpose of the role: To provide risk underwriting support to underwrite SCF prospects aiming for zero loss ratio. Dedicated SCF resource to focus on delivering Accelerated Growth plan.
Key responsibilities: AIG are looking for an experienced Risk Underwriter to do a deep financial analysis on clients and take ownership for the full Credit Risk Underwriting, detailed financial analysis and ORR rating on deals up to $50m single Risk exposure. Liaise with the EMEA and NY Credit Committee where necessary. Initiate comprehensive monitoring of risk and aggregate exposures with site visits and collection of monthly / quarterly risk information direct from Buyer clients. Build targeted pipeline of qualifying prospect Buyers working closely with Prime Revenue and AIG Distribution. Conduct detailed diligence remotely and on site where necessary with SCF prospects and clients. Draft transaction summary in conjunction with TF personnel for the European Credit Committee. Liaise closely with SCF personnel, the Transaction Execution Manager and Transaction Monitoring Manager (in transaction execution phase). Remain compliant with AIG Credit Risk committee processes and procedures. Liaise with SCF personnel to manager renewals.
Client portfolio: Large Corporate clients / Funders / banks.
Requirements: Ability to handle complex and detailed analysis on buyer prospects. Ambitious individual who is both risk and commercially focussed and able to conduct buyer reviews with CFOs Treasurers and banks. Analytical thinker and self motivated to manage several large new business prospect lists, whilst dealing with existing renewals and endorsements. Ability to prioritise tasks and manage.
Experience & Qualifications Required: Highly Experienced Credit analyst with extensive knowledge of European sectors and buyer groups. Detailed knowledge of Supply Chain finance, cash flow statements and working capital needs. Insurance / receivable finance. Has experience to use highest Risk authority. Able to deal with complex, bespoke and challenging credit underwriting. Well organised, client facing individual. Good analytical mind/logical thinker.
To apply please Click here. (Please mention Credit Insurance News Digest).
Risk Underwriters, City of London, £40,000-£60,000.
We are working on behalf of a number of credit insurers in the City who are seeking experienced Risk Underwriters / Credit Analysts, either from a credit insurance background or a financial services credit analysis background. You should have experience in carrying out detailed analysis of UK obligors either focusing within a couple of industry sectors or across a broad range. Experience of international obligors would be an advantage but wouldn’t be essential. As part of your role you’ll be expected to work closely with the commercial underwriters and advise them on potential risk issues whilst also helping them renew and close new business by offering the best possible credit limits to clients. Regular client, broker, buyer meetings will be expected to ensure you are communicating risk decisions effectively. For a confidential discussion please contact Kerren Leach on 0207 092 3283 /kerren.leach@eamesconsulting.com (Please mention Credit Insurance News Digest when applying).
Senior Risk Underwriter, Atradius. Special Products Analyst team). Singapore.
The Senior Underwriter is responsible for approving /acceptance of new requests for credit insurance cover from both new and existing customers. Includes financial and political risk analysis, applying underwriting principles and procedures to support a new risk or modify an existing strategy. The Senior Underwriter will be responsible for a geographical area as well as being responsible for a trade sector.
The successful candidate will need to attend customer and broker meetings and present themselves in a knowledgeable and professional manner. Applicants must have: previous risk underwriting experience, an ability to provide comprehensive financial analysis (essential), knowledge of relevant analytical techniques, knowledge of political risk underwriting, an interest in worldwide current affairs.The ability to focus on service to customers is a key requirement and the successful candidate will be able to clearly demonstrate a positive attitude and proactive approach. Strong communication skills are essential to the role, including the ability to discuss complex risk issues confidently. The successful candidate will be able to assimilate information and process requests quickly and arrive at decisions promptly without detriment to quality. An ability to work within a team environment is essential, candidates should also be confident to work independently.
Candidates should be aware that the position would involve travel overseas. A flexible approach to work, including long working hours is essential. To apply, please email anthony.rasera@atradius.com. (Please mention Credit Insurance News Digest when applying).
Political Risk Underwriters, London, £50,000 - £95,000.
Major Political Risk & Structured Credit market in the City of London is looking to grow its team with the appointment of two underwriters. The organisation benefit from a very strong rating, significant track record and strong brand recognition. The key products underwritten will include Credit (Trade related), Contract Frustration, Confiscation, CCP, and all related products. They function as a lead market and expect high quality, diligent underwriting from their team to ensure a profitable account is written. You’ll be responsible for managing broker relationships, attending events, networking occasions, conferences and client / market presentations when relevant. Its key that you’ve got a solid understanding of the Political Risk & Structured Credit market, ideally from an underwriting perspective, however high calibre brokers will also be considered. Please contact Kerren Leach on kerren.leach@eamesconsulting.com or 0207 092 3283 to discuss. (Please mention Credit Insurance News Digest when applying).
New Appointments
Euler Hermes has announced that it has appointed Luca Burrafato as country manager for Euler Hermes Italy, effective 6 July 2015. Mr Burrafata will lead the Italian business unit and its 400 employees, and will report directly to Michele Pignotti, Euler Hermes head of Mediterranean Countries, Middle East and Africa region (MMEA). Michele Pignotti, who jointly led Italian and MMEA businesses for 5 years, and will now focus on the development and consolidation of the 14 country- MMEA region, which includes Italy.
QBE Trade Credit has announced that David Murray has joined them as a Risk Underwriter. David, who joins from Euler Hermes, has experience underwriting risk in the paper, fuels, steel and construction sectors. Trevor Williams, Head of Trade Credit & Surety Europe at QBE said: “We are delighted that David will be joining us. We are investing in our underwriting talent to support our growth plans and David’s significant knowledge of the commodity sectors will play an important role as we work with brokers to further develop our portfolio and provides support to clients.”
Nexus CIFS has announced that appointment of two new commercial underwriters into its team – Gavin Brown and Phil Oldfield. Gavin Brown has worked in credit insurance since June 2006, most recently as an Account Manager responsible for a large portfolio in various trade sectors. He will be responsible for Nexus CIFS' portfolio of SME clients with a turnover of up to £5 million. Philip Oldfield joins with experience gained from a number of years managing credit in industry for several large companies in the North West of England, and having worked at both Amlin Credit and Aon. He will be responsible for a northern based portfolio and broker development in the region.
About this issue's sponsor: Atradius
Atradius provides trade credit insurance, surety and collections services worldwide through a strategic presence in 50 countries. Atradius has access to credit information on 200 million companies worldwide. Its credit insurance, bonding and collections products help protect companies throughout the world from payment risks associated with selling products and services on trade credit.
However, leading credit insurer Atradius provides customers with more than just peace of mind – their expertise and detailed country knowledge means that wherever in the world you are trading Atradius is able to give you the inside track on where the real risks lie.
In today’s volatile world exporting your goods or services can be a daunting business. Having real-time information at your fingertips is a must have and this is where Atradius’ extensive knowledge base can really help. However, what really matters to an exporting business is knowing that they are going to get paid and with Atradius Modula Export customers can trade with total confidence safe in the knowledge that whatever happens help is at hand.
Trade Credit Insurance is an important tool in any exporter’s armoury and Atradius explains that with its refreshed Modula Export cover businesses can take confidence to a new level. “ Modula Export is specifically focused on export business and includes markets worldwide, with all major currencies included as standard. Cover includes third country transactions and importantly terrorism is recognised as cause of loss.” The message from Atradius is simple – “ Trade and get paid because we’ve got it covered!”
Credit Insurance News Digests: Sponsorship
Sponsoring an issue of Credit Insurance News Digest is a great way to promote your company or brand to a committed audience of trade credit insurance professionals.
If you are interested in sponsoring an issue in 2015 see our sponsorship page for further information. |
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