Welcome to the November 2020 issue of Credit Insurance News Digest. This issue is sponsored by Tinubu Square.

PLUS: Tinubu Square invites you to travel back in time to the most important periods that marked the development of credit insurance in Europe with an infographic: A Credit Insurance Market History in Europe. Tinubu Square's Subject Matter Insurance Experts chronicles the emergence of credit insurance and takes you step-by-step through its historical events, ending with what credit insurance looks like today. Enjoy this journey into the past as we look forward to the future!
Credit Insurance News
State aid packages have been effective so far at staving off insolvencies, but the difficult part will be when and how to exit these schemes. The International Credit Insurance & Surety Association (ICISA) has published the latest issue of its publication, The Insider. In this issue, Niels Enevoldsen - Chair of ICISA's Credit Insurance Committee, notes that although credit insurance committee members report that they have not yet seen a significant increase in numbers of business insolvencies due to COVID-19, members believe that this is due to the effectiveness of various state aid packages. Consequently, the difficultly will be regarding "when and how" to exit these schemes. Mr Enevoldsen concluded that although credit insurers are facing a long break in their normal activity, credit insurance seems to have "become even more relevant as a tool to protect a business." To read the latest issue of The Insider go to https://www.icisa.org/news/the-insider-october-2020/.
Trade credit insurers brace for "a tsunami" of claims. In a recent Insurance Day article, Roxanne Thornhill, Associate Director at Charles Taylor, considers whether the UK is currently experiencing the calm before the storm in respect of trade credit claims. She notes that although some trade credit insurers are currently experiencing lower levels of claims than normal, and UK insolvencies have fallen dramatically, this is driven by temporary protection by the UK government - which will end at some point. Furthermore, when the UK government's reinsurance scheme comes to an end, trade credit insurers who have been signed up to the scheme may be forced to reduce credit limits "all at once". "All of these factors point to a potential surge in trade credit claims in the near future". To read the Insurance Day article on Charles Taylor's website go to http://www.charlestaylor.com/news/news-search/2020/11/viewpoint-trade-credit-insurers-brace-for-tsunami-of-claims/.
Perceptions of trade credit insurance leave Australian business in a riskier position. Insurance Business has published an article in which Kirk Cheesman, Managing Director of NCI Trade Credit Solutions, advises that he wants to change how trade credit insurance is perceived in Australia. “In Europe, the take-up of trade credit is quite substantial and indicates its position as a standard sort of insurance product for businesses,” he told Insurance Business. “Here in Australia, there’s more of a ‘she’ll be right’ approach", and credit insurance is considered as discretionary spend. Mr Cheesman warns that this is an oversight that can leave Australian businesses in a riskier position than those in other countries, and notes that this should be an especially pertinent concern due to a "build-up of insolvency hibernation happening at the moment." To read Insurance News' article go to https://www.insurancebusinessmag.com/au/news/breaking-news/what-form-of-insurance-are-australian-businesses-overlooking-238399.aspx.
Trade credit insurers prepare for increases in COVID-19 related claims in early 2021. During October's online annual general meeting, Berne Union members noted that while, currently, claims activity is relatively subdued – US$3.3 billion paid in the first half of 2020, compared to US$3.2 billion during the same period in 2019, many members are seeing a marked increase in payment deferrals and pre-claim situations. Consequently, most expect to see COVID-related claims levels rising from early next year. Secretary General, Vinco David, commented: “a combination of the natural claims cycle, and mitigating efforts from governments around the world means that COVID-related claims will not appear immediately. We do expect to see increasing claims in 2021, but exactly how much is still not clear." To read the Berne Union's news release go to https://www.berneunion.org/Articles/Details/519/Credit-insurers-prepare-for-increases-in-COVID-related-claims-in-early-2021-durin.
BMF urges the Government to extend the UK's trade credit insurance re-insurance scheme. Builders' Merchants News has published an article which reports that the Builders Merchants Federation (BMF) is calling on the UK Government to extend the Trade Credit Insurance Re-insurance scheme which is scheduled to finish at the end of December this year. The article notes that over 50% of BMF members use some form of trade credit insurance. BMF's CEO, John Newcomb, commented: “In a survey of companies across the construction industry – over 54% of respondents believed that without Government intervention insurers are unlikely to maintain an appropriate level of cover for their business when the current re-insurance scheme ends." To read Builders' Merchant News' article go to https://www.buildersmerchantsnews.co.uk/BMF-urges-the-Government-to-extend-Trade-Credit-Insurance-guarantee/50228.
Crisis provides an opportunity to promote and highlight the role of the trade credit insurance industry in the economy. The International Credit Insurance & Surety Association (ICISA) has published the latest issue of its publication, The Insider. In this issue, Christian Hendricks, Deputy General Manager at Credendo - Single Risk, and Chair of ICISA's Single Risk Committee, notes that the current crisis provides an opportunity to promote and highlight the role of the trade credit insurance industry in the economy. He comments: "The trade credit insurance sector has again demonstrated its capacity to act as a catalyst for business continuity in a highly disruptive environment. Our industry is a strategic factor of economic and financial stability, and this crisis gives us the opportunity to advocate its benefits towards regulators, clients and partners." To read the latest issue of The Insider go to https://www.icisa.org/news/the-insider-october-2020/.
Three leading trade credit insurers (Atradius, Coface, Euler Hermes) face higher claims but will remain resilient. Commercial Risk Online has reported that Moody’s Investors Service has advised that, despite a Coronavirus-related drop in revenue and predicted rise in claims in the coming months, Atradius, Coface and Euler Hermes look likely to remain resilient - helped by wide economic stimulus from governments. However, looking ahead, Moody's also cautioned that a prolonged global downturn would result in a decline in trade volumes, and, subsequently, negatively impact trade credit insurance. According to Commercial Risk, Moody's estimates that government guarantees currently cover around 50% of the three large trade credit insurers’ exposure. To read Commercial Risk Online's article go to https://www.commercialriskonline.com/leading-trade-credit-insurers-face-higher-claims-but-remain-resilient-says-moodys/.
A Hard Brexit could lead to a 51% increase in UK insolvencies. Financial Director has published an article, Time for a deal, in which Ana Boata, Head of Macroeconomic Research at Euler Hermes, describes the economic importance of a Brexit deal. She notes, for example, that a Hard Brexit would likely see Germany’s export losses nearly double from €4.2 billion to €8.2 billion, with transport, machinery and electricals, and chemicals firms most affected. Similar industries would also be affected in the Netherlands (€4.8 billion losses), France (€3.6 billion), Belgium (€3.1 billion), and Italy (€2.6 billion). Furthermore, she stresses that the UK "simply cannot afford to countenance a Hard Brexit in the midst of the pandemic", and predicts that while even a Soft Brexit scenario would limit the increase in insolvencies to 31%, failure to agree a deal would see that figure increase to 51%. To read Financial Director's article go to https://www.financialdirector.co.uk/2020/11/05/time-for-a-deal/.  
Government measures have positively impacted the number of Australian insolvencies in Q3 and significantly reduced trade credit insurance claims. NCI has reported that its latest Trade Credit Index for Q3 2020 indicates that measures taken by the Australian Government to support businesses during the pandemic have positively impacted the number of trade credit insurance claims and collections requests that it is currently receiving. NCI notes that compared to Q3 2019, the number and value of trade credit insurance claims it has registered have fallen by -48% (205) and -52% (AUS$22.5 million) respectively. There was also a -42% decline in the number of collections lodged with NCI. Overall, the trade sectors with the greatest number of claims were Electrical and Building/Hardware, and New South Wales accounted for the greatest share of NCI's claims (35%). To see NCI infographic go to https://nci.com.au/2020/10/27/trade-credit-risk-index-q3-3/.
Increase in demand for trade credit insurance products. During its October's online annual general meeting, a virtual 'stocktake' indicated that 80% of all Berne Union members reported an increase in new demand, most commonly for short term credit and working capital products, with around a third of respondents indicating that this includes a substantial increase in inquiries from new clients. In terms of risk appetite, the majority of respondents (78%) indicated that they are either increasing (43%) or at least maintaining (35%) overall capacity, while most members are simultaneously decreasing limits for individual countries, sectors and counterparties. To read the Berne Union's news release go to https://www.berneunion.org/Articles/Details/519/Credit-insurers-prepare-for-increases-in-COVID-related-claims-in-early-2021-durin.
New insolvency laws in Australia could impact trade credit insurance. Insurance News (Australia) has reported that Lockton Companies Australia has warned that the Australian Federal Government’s proposed changes to Australia's insolvency framework (due to commence on 1 January if the legislation is passed), could result in an “unprecedented number of possible claim events” for trade credit insurers. Lockton Company Australia's National Manager, Dean Jenkins, told Insurance News that much would depend on how each insurer classifies the “debt restructure” element of the proposed insolvency framework. “If they classify it as a new form of insolvency, some may be paying out full claims once the debt restructuring process is voted in,” Mr Jenkins said. “This could potentially see claim numbers increase." To read Insurance News' article go to https://www.insurancenews.com.au/regulatory-government/new-insolvency-laws-could-impact-trade-credit-insurance.
Australian business insolvencies may not be a severe as expected. The Australian Financial Review has reported that Kirk Cheesman, Managing Director of National Credit Insurance, has noted that even if current predictions about the number of Australian businesses that might go bust come true, trade credit insurance claims and debt collection have been at the lowest point in two years because of government subsidy programs. Mr Cheesman acknowledged that there would clearly be more insolvencies in 2021 than would occur in 2020, but suggested that the "severity of the level of insolvencies wasn't likely to be as dramatic as some are expecting." To read The Australian Financial Review's article go to https://www.afr.com/companies/financial-services/credit-insurance-claims-show-businesses-may-not-pull-the-plug-20201018-p5666y (subscription may be required).
Credit insurance claims are expected to continue to rise in Indonesia. Asia Insurance Review has reported that the Indonesian General Insurance Association (AAUI) expects that the rising trend of credit insurance claims since 2019 in Indonesia is likely to continue next year. AAUI Executive Director, Dody Achmad Sudiyar Dalimunthe, said that the association began to see a surge in credit insurance claims at the end of 2019, and this was accompanied by an increase in premiums as credit insurance business "soared". Overall, in 2019 the credit insurance premium income reached IDR14.64 trillion (US$998 million),- an increase of 86.2% compared to 2018, and claims increased in tandem, by 88.9%. To read Asia Insurance Review's article go to https://www.asiainsurancereview.com/News/View-NewsLetter-Article/id/74344/Type/eDaily/Indonesia-Credit-insurance-claims-expected-to-continue-to-rise# (subscription may be required).
Romanian trade credit insurers are experiencing the same level of business as 2019. A new report by Renomia (Astreos Credit's Romanian partner) advises that, helped by governmental measures, the Romanian B2B trade and payment climate has shown resilience during the COVID-19 crisis, with more payment notifications but no significant increase in insolvencies. Renomia notes that local trade credit insurers are seeing the same level of business as last year, and although "underwriters are avoiding the hardest-hit sectors", overall trade credit insurers have shown flexibility. Consequently, there has been "no major discontent among our customers". The report adds that current data indicates that the Romanian economy contracted 10.5% on an annual basis in Q2 2020 versus Q1’s 2.4% growth. To read Astreos Credit's report go to https://www.astreos-credit.com/2020-country-focus-romania/.
A Hard Brexit could cost the EU €33 billion in annual exports. Euler Hermes has published a new report which warns that the odds for a no-deal Brexit at the end of 2020 have increased considerably to 45%, which could cost as much as €33 billion in annual EU exports - with Germany, the Netherlands, and France hit the hardest. Euler Hermes also predicts that in the event of a no-deal on 1 January 2021, the UK could see a -5% contraction in GDP and a -15% drop in exports, in addition to inflation beyond 5% for at least six months. The latter will mainly be driven by the strong rise in import prices (+15%) on the back of higher average import tariffs on total imports, a significant rise in non-tariff barriers, and a forecasted -10% depreciation of Sterling. To read Euler Hermes' report go to https://www.eulerhermes.com/en_global/news-insights/economic-insights/A-hard-Brexit-could-cost-the-EU-EUR33bn-in-annual-exports.html.
Etihad Credit Insurance launches a new product, ECI Islamic. TXF recently spoke to Etihad Credit Insurance's (ECI) CEO, Massimo Falcioni, and to Zishan Iqbal, Director of Murabaha Solutions, about the agency’s new product, ECI Islamic - a Shariah-compliant trade credit and export finance insurance suite of products designed to boost the UAE’s halal export industry. Export credit solutions offered under the ECI Islamic banner include trade credit insurance (which includes whole turnover policy, single risk short term policy, and single risk long term policy), Letter of Credit confirmation insurance, Islamic export finance, foreign investment insurance, and surety bonding. ECI is one of the first sovereign export credit agencies in the Middle East to offer Shariah-compliant export credit insurance and guarantee solutions. To read TXF's article go to https://www.txfnews.com/News/Article/7080/Building-on-the-halal-brand-with-ECI-Islamic.
The impact of the French Government's reinsurance scheme on Coface in Q3. Reinsurance News has reported that Coface has achieved an improved combined ratio in Q3, driven by the temporary positive impact of French Government schemes. Additionally, according to the article, Coface's net loss ratio in Q3 by was 7.4% lower than in H1 2020 due to low loss activity in the period. Coface suggested that it is "confident that its agility and efficiency will allow us to navigate in this challenging period successfully", adding that, "in light of its strong performance through 2020 and a solid balance sheet", it will launch of a share buyback programme for a maximum amount of €15 million (US$17.7 million), or 2.4 million shares. To read Reinsurance News' article go to https://www.reinsurancene.ws/gov-schemes-benefit-coface-in-q3-but-9m-net-income-falls-55/.  
Nexus partners with two firms to boost UK and Europe surety and trade credit insurance. GTR (Global Trade Review) has reported that Nexus Group has partnered with US insurer Crum & Forster and Dublin-based Hamilton to set up a platform in London. It has also announced that it has brought in two industry veterans (see 'New Appointments - below) to build out its credit and political risk insurance capabilities. GTR notes that the new partnership aims to target UK and European-based insureds, as well as expand Nexus Group’s surety business. To read GTR's article go to https://www.gtreview.com/news/on-the-move/trio-of-firms-partner-to-boost-uk-and-europe-surety-and-trade-credit-insurance.
China’s exporters are gaining market share despite the COVID-19 crisis. Euler Hermes has published an analysis which finds that China’s exporters have been gaining market share despite the COVID-19 crisis. Out of the top 20 exporters in the world, China’s total market share now stands at approximately 25%, compared to an average of 20% over 2017-19. Similarly, in terms of global market share, China’s exporters increased their reach to 33.8% on average in 2020, compared with 23.4% on average over 2017-19. Such a rapid increase in market share has not been seen in previous global crises and, Euler Hermes notes, is partly explained by the pandemic increasing global demand for Chinese medical goods and electronics. To read Euler Hermes' paper go to https://www.eulerhermes.com/en_global/news-insights/economic-insights/Winning-exports-market-share-despite-the-COVID-19-crisis.html.
Cinven and GIC to acquire specialist insurance broker Miller. Cinven, the international private equity firm, and GIC, Singapore’s sovereign wealth fund, have announced that they have reached an agreement to acquire Miller, a specialist insurance and (re)insurance broker, from its partners and corporate member, Willis Towers Watson. Miller operates across a number of specialist areas, including credit and political risks, and is headquartered in London. Founded in 1902, it employs more than 640 people through its offices in London, Ipswich, Brussels, Paris, Singapore and Geneva. To read Miller's news release go to https://www.miller-insurance.com/News-and-insights/Latest-news/Cinven-and-GIC-to-acquire-specialist-insurance-broker-Miller.
A condensed view of country risk assessments published by Atradius, Coface, Credendo and Euler Hermes. AU Group has released its latest AU 'G Grade' for Q4 2020. The AU 'G-Grade' is based on the individual assessment of a country by each of the four main credit insurers (Atradius, Coface, Credendo, and Euler Hermes), and is calculated according to the real risk taken by these major insurers collectively. Also, seven key indicators provided by the IMF Statistics Department give a view of the key trends and the level of risk per country. In this issue, AU notes that downgrades this quarter include Jordan, Lebanon, Turkey, Ghana, South Korea, Oman, Taiwan, and UAE. To download a copy of the publication from AU Group website go to https://www.au-group.com/new-trends-in-country-risks-au-g-grade-q4-2020/.
WEBINAR. Looking ahead to 2021: Western Europe and the Americas. Coface has published a webinar in which Patricia Krause, Bruno De Moura Fernandes and Ruben Nizard, Coface's economists for Latin America, Western Europe, and North America respectively, look ahead to 2021. In an informative session, three pivotal issues are discussed in depth: Brexit and Europe outlook, US elections and Northern America outlook, and economic development in Latin America. To watch the webinar, go to https://www.coface.com/News-Publications/News/Coface-Webinar-Looking-at-2021-Western-Europe-Americas.
2020 issue of Atradius' International Debt Collections Handbook. Atradius has announced the publication of the latest issue of its annual International Debt Collections Handbook. The handbook for 2020 includes country-specific snapshots of local economic situations, with details of the GDP, major industries, import-export growth and Atradius Collections' local success rate. Additional chapters examine local debt collections customs and provide an overview of the interest and collection costs that are charged to the debtors, as well as collections and bankruptcy procedures. To download a copy go to https://group.atradius.com/publications/global-international-debt-collections-handbook.html.  
Markel International’s wholesale business new website. Markel has launched a new website for its wholesale business which has a fresh new look and feel, in line with its latest marketing campaign, Performance Freed. To see the trade credit, political risk and surety pages visit https://performancefreed.markel.com/trade-credit-political-risk-and-surety, or click on Markel's advert on this webpage. or click on the Markel advert.
Congratulations to:
Charles Taylor for being for being shortlisted for Outsourced Partner of the Year in the 2020 British Claims Awards. The virtual awards ceremony will be broadcast at 7 pm (GMT) on 19 November.  
Nexus Group for being identified as one of London Stock Exchange Group’s ‘1000 Companies to Inspire Britain’ 2020. To be featured in the report, businesses had to demonstrate strong revenue growth over the last three years and outperform their sector peers, creating a unique list of the UK’s most innovative SMEs. Colin Thompson, Group CEO of Nexus, said: “We’re delighted to be acknowledged in this report as one of the UK’s fastest growing and most dynamic SMEs and commended for our entrepreneurial spirit."
Etihad Credit Insurance, on being named 'Most Innovative Finance Solutions in Middle East 2020' for the second year in a row by global finance magazine Capital Finance International (CFI.co Awards).
Long-Service Anniversary: Congratulations to:
Jane Hull
, Tokio Marine HCC's Underwriting Director - Credit, on passing her 26th anniversary with Tokio Marine HCC. Jane joined HCC in 1994 as a chartered quantity surveyor in the surety team, before becoming claims manager for both credit insurance and surety divisions, and later moving into credit insurance underwriting.
New Appointments
Berne Union Members recently voted on the election of officials for a new 2-year term, including the re-appointments of Christina Westholm-Schroder (SOVEREIGN) as Vice President, and Julian Hudson (CHUBB) as short-Term Committee Chairman. Michal Ron (SACE) was announced as the Berne Union's new President.
Markel has made two new senior appointments. Phil Amlot has become Markel's Head of Portfolio, Global - Trade Credit, based in Markel's Fenchurch Street office in London. Phil was previously Underwriting Manager at Markel Corporation in New York City and, before that, Senior Underwriter - Trade Credit, in London. Arjan Van de Wall becomes Markel's Head of Trade Credit & Political Risk - Americas, based in North Carolina. Arjan was previously Markel's Global Development Director - Trade Credit & Political Risk and Surety, and was based in Virginia.
Credendo has announced that James Deloz has been appointed to the newly created post of Group Chief Underwriting Officer. James joined Credendo eight years ago and will combine his current position of Head of Underwriting and Credit Information (short term non-EU risks) with the new position.
Nexus Group has announced that following its partnership with US insurer Crum & Forster and Dublin-based Hamilton, David Wright has been appointed as Head of International Credit and Political Risk. David moves from Ryan Specialty Group. In addition, Steve Powney has been appointed as Head of International Surety business. He joins from AIG, where he was most recently EMEA Region & Global Surety Product Head.
Crum & Forster has appointed Robert Staples as its new regional Underwriting Director. Robert was previously Crum & Forster's Vice President - Major Markets, and prior to that worked for Allied World and AIG. Robert will be based in Florida.
Events & Training
New Stecis’ courses in Trade Credit Insurance and Surety. 
After having cancelled all April courses in 2020, Stecis’ has picked up the pieces again.
All classroom courses in various levels of Credit Insurance and Surety are led by professionals from the industry. The courses are meant for starting and experienced professionals who are working in the Trade Credit Insurance and Surety industry and for all other interested parties like reinsurers, brokers and lawyers. There are courses on offer that will cater for the level of knowledge you are looking. Also it is a perfect way to enhance your network within the industry.

So please check the course descriptions and course dates on our website www.stecis.org – where you are able to register for the Stecis’ courses.
GTR Nordics 2020, 12 November 2020. Stockholm.
After many consecutive years of attendance growth we are delighted to announce that GTR Nordics 2020 will take place on November 12, moving to the larger event space at the Radisson Blu Waterfront, Stockholm. While offering a more comfortable space to mingle, this also provides the opportunity to add some exciting new event features. GTR Nordics 2020 promises to be the biggest and best yet: Watch this space for more details as we move towards the conference date! Last year GTR Nordics returned to Stockholm and welcomed another record-breaking audience of over 500 trade finance experts, insurers, bankers, ECAs, technology innovators and corporates of all sizes. 
Don’t miss your chance to join leading corporates and trade specialists for a day of discussion, debate and networking. Limited amounts of complementary corporate passes are available to those who are exporters, importers, manufacturers, distributors, traders & producers of physical goods only. For more information, visit here.
About the Sponsor: Tinubu Square
Tinubu Square is the industry-leading SaaS platform vendor, enabling Credit Insurance & Surety digital transformation.
For 20 years, Tinubu Square has provided Credit & Surety insurers across the globe with software and services allowing them to offer best-in-class customer experience, as well as significantly reduce their exposure to risk and their financial, operational and technical costs.
Tinubu Square has an international footprint with customers in over 20 countries, including 30 of the top 60 worldwide Credit & Surety underwriters.
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