|Dear Credit Insurance Colleague
Welcome to issue 17 of Credit Insurance News Digest: 29 January - 12 February 2013 brought to you by Credit Insurance News (www.creditinsurancenews.co.uk).
This issue is kindly sponsored by Nexus Credit Indemnity and Financial Services ("CIFS").
If you are reading this Credit Insurance News Digest, but have yet to sign-up for regular copies, please add your name to my list of subscribers. You can sign-up to this service at the website www.creditinsurancenews.co.uk or simply send me an email.
Credit Insurance News
New look website at CIFS. CIFS (winner of last week's ICM Award for 'Credit Insurer of the Year' and this week's sponsor) has redesigned its website, with a clean, easily navigable new layout, new photographs (including team members) and some new copy. Sue Morley, CIFS' Client Services Director, commented:" We are entering the latest phase of or development with Nexus, our new parent group, keen to help us develop the potential of our collaborative approach to credit insurance as well as our innovative product development programme. The new website design reflects both the building blocks of our established business and the fresh impetus we've received." To view the changes go to http://creditindemnity.com/.
QBE launches top-up credit insurance cover for European businesses. QBE has launched CreditFlex, a new top-up credit insurance solution for continental European businesses trading in their home and OECD markets, designed to support businesses when their existing primary credit insurer has a positive limit in place - but is unable to provide sufficient cover for exposures within their whole turnover policy. CreditFlex is the result of a partnership between QBE and Tinubu Square in Belgium, is 100% underwritten by QBE European Operations and is available through any credit insurance broker. There are no restrictions on the underlying primary credit insurer. For more information and to view the product's website go to http://www.qbecreditflex.com/.
Note: A detailed presentation on CreditFlex, a proposal form and policy wording are available to view at http://www.qbecreditflex.com/aboutus.asp.
CIFS named 'Credit Insurer of the Year' at the ICM Awards. The prestigious ICM Awards 2013 were held at Hilton Park Lane, London, on 6 February 2013. The winners and finalists included a broad range of businesses working in the credit profession; among them this issue's sponsor CIFS, which won the 'Credit Insurer of the Year' award. Other winners and finalists included Euler Hermes Collections, recipient of the award for 'Debt Collection Agency of the Year', and CoCredo (the sponsor of the last issue of the Digest) which was a finalist in the 'Credit Information Provider of the Year' category. To view CIFS' statement on winning the award with a photograph of some members of the winning team with their Award, go to http://creditindemnity.com/a-night-to-remember/.
Political and regulatory uncertainty in the European Union could push trade credit insurance premiums up. GTR’s article, 'EU uncertainty to push premiums up' (7 February) advises that the ICISA has warned that political and regulatory uncertainty in the European Union could push trade credit insurance premiums up. However Robert Nijhout, ICISA’s president, explains to GTR that despite difficult market conditions that could lead to changes in credit limits and risk appetite, the policy renewal rate among members of the association is “extremely high”, adding that “competition is fierce and this is reflected in quite liberal offers to clients”. To view the full article on GTR's website, go to http://www.gtreview.com/trade-finance/global-trade-review-news/2013/February/EU-uncertainty-to-push-premiums-up_10663.shtml.
As familiar high street chains go insolvent more businesses are turning to Lloyd’s for trade credit insurance. Lloyd's has published a new article, 'Lloyd's trade specialists: credit where it is due' (4 February), which advises that due to continuing tough economic conditions more companies are turning to trade credit insurance. Mike Holley, CEO of the Lloyd’s trade credit insurance specialist Equinox Global, is pessimistic about the outlook for insolvency levels among businesses, which, he believes, could be worse in 2013 than in 2012. Mr Holley also says that “demand for [trade credit insurance] product is good at the moment because businesses are very aware of the ability of the current economic environment to produce unpleasant surprises.” To view the full article go to http://www.lloyds.com/news-and-insight/news-and-features/market-news/industry-news-2013/lloyds-trade-specialists-credit-where-it-is-due.
ICISA reports that demand for trade credit insurance is set to continue. ICISA has published its latest 'ICISA Outlook 2013' (6 February) which predicts that an increased demand for trade credit insurance and surety is expected to continue. 15% of global trade is now credit insured, while high retention rates confirm customer satisfaction in the product. Looking ahead, the trade credit insurance members expect a mixed picture; some markets are expected to harden while others will soften during 2013. Andreas Tesch, Vice-President of ICISA, explains that: “especially in continental Europe, the UK, Australia and New Zealand markets are expected to harden. As a result overall average premium rates are expected to show an upward trend with stricter policy conditions. The USA and Asia market conditions are expected to soften over 2013." To view ICISA's detailed press release go to http://www.icisa.org/press-releases/1561/.
Is Credit Insurance the “Silver Bullet? CMA (Credit Management Association) has published an article, 'Is Credit Insurance the “Silver Bullet?' (24 January) which gives an example in which a U.S. company used trade credit insurance for ten years, but in only one of those years were the costs of the insurance offset by the recoveries received. As a result, the article advises that author believes that credit insurance is definitely not a silver bullet to bad debts, and lists some of the limitations of credit insurance which lead to this opinion. To view the article and some of the lively comments it provoked go to http://creditmanagementassociation.org/2013/01/24/is-credit-insurance-the-silver-bullet-michael-dennis-cbf/.
Credit Insurance: The Pros and Cons And Alternatives. The Lien Blog has published an article, 'Credit Insurance: The Pros and Cons And Alternatives', in response the article (directly above) in which some of the advantages and disadvantages of credit Insurance are discussed. The blog's author, Scott Wolfe Jr., the CEO of Zlien, advises that credit insurance is not a “silver bullet” for the following reasons: credit insurance is usually not available on high-risk accounts, there are deductibles and minimum loss thresholds that minimize its usefulness; and policy limits restrict recovery and agrees. However, he advises that credit insurance is like insurance of almost any other character: "it’s there to avoid an enormous loss." To view the blog go to http://www.zlien.com/blog/credit-insurance-the-pros-and-cons-and-alternatives/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+xlien+%28Construction+%26+Mechanics+Lien+Blog%29.
An examination of the benefits of trade credit insurance. Eric Voegtle, Vice President of U.S. company One Source Risk Management and Funding has published two articles which may be of interest to readers. 'Why the lowest cost Trade Credit Insurance policy isn’t always the best choice', advises that pricing is only one thing to consider when purchasing credit insurance. To view go to http://tradecreditinsurance.wordpress.com/2013/01/30/why-the-lowest-cost-trade-credit-insurance-policy-isnt-always-the-best-choice/. The second article, 'You shouldn’t buy Trade Credit Insurance!' summarises the main benefits of credit insurance and advises that: "every company that sells on open terms needs to look into this coverage." To view go to http://tradecreditinsurance.wordpress.com/2013/01/07/you-shouldnt-buy-trade-credit-insurance/.
Atradius Collections to strengthen its presence in South East Asia. Atradius Collections has announced that it is strengthening its activities in the South East Asia region by expanding its Singapore office. Raymond van der Loos, Managing Director of Atradius Collections, commented: "South East Asia is developing fast and it makes sense to offer debt collection service to the wider market and serve our customers better by providing both local operation and customer services. It is the appropriate time now for us to strengthen and expand our activities in this potential region." To view Atradius' news release go to http://www.atradiuscollections.com/press/press/press-overview.html.
Note: A subscription is required to view the following articles:
Finance Monthly magazine has published a full-page interview with John Cockshutt, a director at W Denis which gives an overview of the benefits of trade credit and export credit insurance. The also examines some of the major developments in the industry during the last few years, including the UK Export Agency's provision of credit insurance support for UK exporters and new insurers entering the market. To view the full article go to http://www.finance-monthly.com/the-magazine and view page 34-35. If you are not already a subscriber, registration is free and provides access to the full magazine & back issues.
Trade Finance has published an article, 'TCI & PRI: Trade finance needs more guarantees' (4 February) which discusses the expansion of the trade credit and political risk insurance market with some of the big insurers, including Sovereign, XL Group, Atradius, Zurich, AIG, and Swiss Re. To view go to http://www.tradefinancemagazine.com/Article/3150889/Regions/22994/TCI-and-PRI-Trade-finance-needs-more-guarantees.html. (Please note: Free 7-day trials to this service are available).
New Industry Reports, Video Clips and Apps
Euler Hermes report on debt collections in the US. 'Ripples on the pond: Credit culture and collections'in the US' a new report by Joe Batie, CEO of Euler Hermes Collections North America, and Phil Mercer, Managing Director of Euler Hermes Collections, advises that collections activity in the U.S. has been buoyant. Accounts placed for collection have been on the rise since July, while the rate of bankruptcies has also increased - albeit marginally. In the ﬁrst half of 2012, the average DSO across all sectors was approximately 57 days, however, cases have been reported of corporations that will only pay invoices after a minimum of 120 days. To download the full report go to www.eulerhermes.com/search/results.aspx?k=ripples%20on%20the%20pond.
Marsh advises that demand for trade credit insurance remains strong across EMEA. Marsh's latest 'Insurance Market Report 2013' advises that the demand for trade credit insurance remains strong across EMEA, although rates have remained stable for the fourth consecutive quarter as insurers continue to compete for business. However, trade credit insurers continue to be cautious about exposures for countries such as Greece, Italy, Ireland, Portugal, and Spain. A video clip in which Andrew Child, Global Development Manager in the Trade Credit practice at Marsh, discusses the eurozone crisis and its impact on the trade credit insurance as well the outlook for 2013 is available at http://imr.marsh.com/Reports/EMEA.aspx. Full instructions to access the report are also given.
AIG provides an overview of its U.S. trade credit product. AIG has published a 3 minute video clip which provides an introduction to and overview of its Credit Insurance product in the U.S. The clip contains presentations by Paul Kunzer, Divisional President North America Trade Credit, Carolyn Spackman, Global Vice President/Economist Trade Credit and Political Risk, and Patrick Sullivan, Global Head, Claims Trade Credit and Political Risk. To view the clip please paste the following URL into your browser- www.youtube.com/watch?v=8pXnUmodUK0.
Marsh report stresses the benefits of trade credit insurance. Marsh has advised in a new report, 'Perspectives on Topical Risk and Insurance Issues for UK Corporates', that leading trade credit insurers used by Marsh have expressed the opinion that business defaults or failures as a consequence of the collapse of the Eurozone or a member state withdrawing are insurable events. Claims would be paid, subject to normal policy terms and conditions. Marsh also stresses that the role of trade credit insurance is not simply to protect against bad debts; other benefits include: lower borrowing rates and increased funding, better cash flow and debt collection services: "If you don’t buy trade credit insurance and haven’t considered it recently, now could be a good time to consider how it could help you." To view Marsh's press release and link to the full report go to http://uk.marsh.com/default.aspx?tabid=1560&ID=28693.
Escalating Violence and Regime Instability Key Global Political Risks in 2013. Marsh’s Global Political Risk and Trade Credit Practice and risk analysis and mapping company Maplecroft have jointly released the 'Political Risk Map 2013'. According to the map, the number of countries experiencing escalating political violence rose by 36% from a year ago - a trend that is likely to continue given the heightened risk of regime instability in a growing number of countries. In addition 38 countries, nearly one in five of those analysed, are experiencing escalating political violence, up from 28 in 2012. The map highlights dynamic political risks across 197 countries, including conflict, terrorism, macroeconomic stability, rule of law, regulatory and business environments. To view Marsh's press release and link to 'Political Risk Map 2013', go to http://uk.marsh.com/default.aspx?tabid=1572&ID=28689.
Atradius advises that GDP in Ireland will grow by more than 1% in 2013, driven by net exports. Atradius has produced its latest country report on Ireland which advises that the Irish economy has rebounded after the prolonged and deep recession that lasted from 2008 to 2010. Economic growth is expected to have reached 0.5% in 2012, much better than the Eurozone overall. Furthermore, the rebound is forecast to accelerate in 2013, with GDP growing by 1.5%: again, a relatively strong performance compared to the rest of the Eurozone. The main drivers of this growth are net exports, which have been the only component positively contributing to GDP over recent years and which is also expected to be the main driver in 2013. To view the full report go to http://global.atradius.com/creditmanagementknowledge/ireland/ireland-overview.html.
Marsh launches new iPad app. Marsh has created a new, free iPad app to facilitate access to Marsh Risk Management Research (MRMR), Marsh's series of white papers, briefings, and analytics featuring Marsh's research and analysis on the risks facing the world’s businesses. In addition, a quarterly briefing highlights changes in insurance rates around the world. To download a copy go to http://uk.marsh.com/ and click on the link or go to app store.
Credit Insurance Account Executive (Ref: 6517). Location: South East/London/Surrey/Sussex/Kent/Middlesex. Salary: £55,000 - £65,000 + benefits.
An expanding broker based in the South East is looking for an experienced Credit Account Executive to join their progressive business. You will have specific knowledge of Credit Insurance processes, client advisory background, good level corporate/credit insurance expertise across. This is an excellent opportunity for an individual to join a business where they can make a real impact. For more information and/or to apply contact: firstname.lastname@example.org or call 07943 851 382. (Please mention Credit Insurance News Digest).
Still recruiting . . .
New Business Broker - Trade Credit- Buckinghamshire. Salary up to £40,000 (Job Ref 27339)
Our client is a well-known Insurance Broker trading for over 25 years and offering a nationwide service is looking to recruit a Trade Credit New Business Broker to work in their Buckinghamshire office or home based. This is a fantastic position for the right individual to handle the Credit divisions day to day duties including processing credit limits, overdue notifications and mid term alterations. Requirements include: Credit insurance experience, client servicing experience with a track record achieving pre-agreed targets, knowledge of the FSA procedures and account handling experience. For more information and/or to apply go to http://www.lawesrecruitment.co.uk/jobs/buckinghamshire/account-handler/broker/other-insurance/new-business-broker--trade-credit-buckinghamshire/571/, call 0203 411 8430 or email email@example.com. (Please mention Credit Insurance News Digest).
Credit New Business Producer, South East. Salary: £40,000 - £80,000 (Job Ref 27195)
Our client is seeking a Credit New Business Producer based in the South East. This role will be either working independently on larger premium business or alongside an existing New Business Producer dealing with Credit Insurance. Requirements include: Proven Sales track record and new business developing/handling experience within Credit Insurance, extensive insurance industry knowledge with a proven track record, an ability to meet tight deadlines and excellent presentation and communication skills. For more information and/or to apply go to http://www.lawesrecruitment.co.uk/jobs/city/business-development-london-market/credit-new-business-producer-south-east/272/, call 0203 411 8430 or email firstname.lastname@example.org. (Please mention Credit Insurance News Digest).
23rd Insuring Export Credit & Political Risk Annual Global Convention. The 23rd Insuring Export Credit & Political Risk Annual Global Convention takes place on the 27-28th of February at the Hilton London Tower Bridge Hotel. Attracting nearly 300 attendees from over 37 countries annually, this is the leading global event for ECAs, the private insurance sector and their clients. The 70+ expert speakers announced include: Richard Talboys of Willis, Susan Ross of Aon, Lukas Neckermann of Euler Hermes, Diana Smallridge of International Financial Consulting, Jane Johnson of Atradius, Neil Ross of AIG and Robert Nijhout of ICISA. Register by 25th January to benefit for an early registration discount of up to £600. Readers of Credit Insurance News Digest can also quote code FKW52464CNINL for a further 10% reduction. To view the latest agenda or to register online, please visit: http://www.iiribcfinance.com/FKW52464CNINL.
Guidance on export credit insurance including an overview of the market. HLW Keeble Hewson are holding a free breakfast seminar, ' International Trade - Exploring Opportunities And Avoiding The Pitfalls,' on 21 February 2013 at Commercial House, 14 Commercial Street, Sheffield S1 2AT. Mike Clark, a specialist export Credit Insurance Broker, will be a speaker. Topics to be covered include: securing payment when doing business abroad, guidance on export credit insurance including an overview of the market and advice on obtaining cover. To book a free place please contact Clare Bowler at email@example.com or 0114 2906 230. (Please mention Credit Insurance News Digest).
Credit Summit 2013. Credit Today’s Credit Summit returns on 13 March 2013 to the QE11 Conference Centre in London and attracts around 700 credit industry professionals. The event offers free content including an Economic Outlook from ex-chief economist of HSBC Dennis Turner, a timely regulatory briefing from the FSA on the move to the FCA, in addition to a number of workshops for trade credit managers. The event also offers an exhibition with more than 35 stands, and three paid-for conferences including Credit & Collections, Alternative Lending and Data, Risk and Fraud starting from £299. For more information on this event go to http://www.creditsummit.co.uk/.
Dates for the STECIS Trade Credit Insurance and Surety (Basic and Advanced) Training Seminar have been announced for 21 & 22 March and 13 & 14 June 2013 (The Hague, the Netherlands). The Basic training seminars are open to participants with up to 3 years of work experience. The Advanced training seminars are targeting participants who attended the basic training seminars and/or have at least 4 years of work experience in trade credit insurance or surety. As the International Credit Insurance & Surety Association (ICISA) strongly endorses the STECIS training seminar programme, ICISA member companies receive a 5% discount on the total seminar fee. Companies (ICISA members and non-ICISA members) registering three or more participants to one training seminar, receive a 10% discount on the total seminar fee. For more information contact firstname.lastname@example.org or call +31 20 528 5170.
Business Information: Recommended Reports and Business Shorts
Begbies Traynor's report indicates green shoots of recovery in spite of GDP Gloom. Published on the back of gloomy GDP data, the most recent Begbies Traynor Red Flag Alert research shows a 12% decrease in the level of ‘Combined’ distress across the UK (categorised as companies experiencing ‘Significant’ or ‘Critical’ financial problems) from 223,125 in Q3 2012 to 196,636 in Q4 2012, indicating the first tentative signs of recovery for parts of the economy. In addition, the research showed substantial decreases in distress in key sectors, with construction and real estate leading the overall improvement. To view Begbies Traynor's press release with access to the full report go to http://www.begbies-traynorgroup.com/default/news/13-02-01/green_shoots_of_recovery_in_spite_of_gdp_gloom.aspx.
Corporate insolvencies on the decline . . . for now. The Insolvency Service has published statistics showing that there were 3,834 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the fourth quarter of 2012 (on a seasonally adjusted basis). This was a decrease of 3.3% on the previous quarter and 10.7% less than the same quarter a year ago. However, James Money – a partner in the Corporate Recovery & Insolvency team at PKF (UK) LLP commented against too optimistic a reading of these figures: “As we have seen during the first few weeks of the year, the high street is having a difficult time and the construction sector is under pressure as well. We’re also starting to see more business failures in the professional and financial services industries. This does not tally with an operating environment in which the number of company liquidations drops by 10.7% year-on-year. " To view PKF's news release go to http://www.pkf.co.uk/pkf/news/press_release/corporate_insolvencies_on_the_decline%E2%80%A6for_now&goto=5.
BDO report describes the food and drink sector as the ‘squeezed middle’ following another challenging year. BDO has published its latest publication, 'The food and drink report - January 2013' which focuses on the key issues and challenges facing the sector, how the sector has responded and what may be in store over the next year. The Report blames pressures out of the sector’s control for the ‘incredibly tough’ conditions it is facing, such as consumer spending, poor commodity harvests, rising input costs and being stuck in the middle of supermarket price wars. To download a copy go to http://www.bdo.uk.com/library/food-and-drink-report-january-2013.
UK to avoid triple-dip recession as business confidence rises. The UK looks set to avoid a triple-dip recession according to the latest ICAEW/Grant Thornton UK Business Confidence Monitor. Business confidence is at its highest since Q2 2011 - which suggests that growth will resume this quarter. Companies reported an increase in turnover of 3.3% in the past 12 months, and expect a rise of 4.6% in the year ahead. Similarly profits grew by 2.5% in the past 12 months and are expected to grow by 3.9% in 2013. Confidence is positive across all regions with the South East and Wales among the most optimistic. Businesses in all sectors also reported a positive trend with IT & Communications and Construction recording the highest Confidence Indexes. To view Grant Thornton's news release go to http://www.grant-thornton.co.uk/en/Media-Centre/News/2013/UK-to-avoid-triple-dip-recession-as-business-confidence-rises/.
The 2012 Late Payment Index from Experian indicates that UK businesses paid their bills more than a day earlier in 2012. During 2012, firms paid their overdue invoices on average 24.66 days after agreed terms, compared to an average of 25.70 days during 2011, with the average late payment figures during Q4 falling from 25.97 days beyond terms in Q4 2011 to 25.63 days. The largest improvements during 2012 were led by businesses with more than 100 employees, paying on average 2.25 days faster than in 2011. To view Experian's news release go to http://press.experian.com/United-Kingdom/Press-Release/late-payments-fall-in-2012.aspx.
On the High Street: Who's UP/Who's DOWN
UP: LVMH, the world's largest luxury company, has reported a full year group net sales growth increase of 19% (9% on a like-for like basis), up to €28.1 billion, with full year net profit of €3.42 billion up from €3.07 billion. The Christian Dior fragrance range has been the driving force in the company’s perfume and cosmetic division and Louis Vuitton recorded double-digit growth through the year. Looking ahead, Bernard Arnault, Chairman and CEO, is confident that growth momentum will be maintained.
UP: Hugo Boss has reported that lower demand from China was more than off-set by rapid growth in the US. Total sales for 2012 were up 10% to €2.35 billion with a 13% increase in EBITDA. Full results are due to be published on March 14th, and CE Claus Dietrich Lahrs is confidently predicting ahead of market growth for 2013. Overall, Hugo Boss is one of the best performers in the luxury sector.
IMPROVING: Thomas Cook. After a rocky period, Thomas Cook, Britain’s second-biggest travel company, turnaround plan seems to be firmly on track with stronger operating performances reported in its major markets - the UK, Germany and the Nordics. Revenues in the final three months to end-December 2012 were down 7%, or 4% on a constant currency basis, to £1,724 million, with a gross margin improvement of 1.3 percentage points to 21.9% compared to the same period a year earlier. In addition, the company said it had reduced its debt by £86 million to £1.56 billion over the last year. Looking ahead, the group plans to achieve savings of £100 million by 2015 and has identified another £60 million of savings for this year.
Expanding: H&M, the world's second biggest clothing retailer, has reported that its sales were below expectations sales in the three months to end-November 2012, with a drop in net profits to £528 million ( £534 million during the same period in 2011). H&M advised that this was due to tough European competition, reduced consumer spend, the cost of its ongoing expansion plan and the strengthening of the Swedish krona against the euro. Looking ahead, the retailer plans to revamp its website, introduce new brands in Europe and press ahead with its expansion plans. In total 325 new stores are planned to be opened in 2013 - building on a similar level of openings in 2012.
DOWN: Waterstones. While Charles Daunt, Waterstones MD has been widely quoted that they will not “chase share” at the cost of margins, in the year to 28 April 2012, Waterstones reported widening pre-tax losses from £28.7 million to £37.3 million, turnover slid 14% to £410.4 million and like-for-like sales fell by 11.1%. However, Mr. Daunt has also been keen to stress that his turnaround plan for the businesses seems to be bearing fruit - with like-for-like sales over the Christmas period up 5% (as reported in The Telegraph) and more positive results expected for 2013.
About this week's sponsor: Nexus Credit Indemnity and Financial Services ("CIFS").
Credit Indemnity & Financial Services – named Credit Insurer of the Year at last week’s ICM British Credit Awards – is the only company to offer whole turnover policies 100% underwritten at Lloyd’s of London.
CIFS is characterised by direct communication between policyholders and their risk underwriters as well as by process innovation and technological know-how. Now, with backing from new parent Nexus Underwriting Management Ltd (NUML), its management team of Bob Lilley, Sue Morley and Neil Payton is seeking to build on growing appreciation of its collaborative approach and in-depth market expertise.
NUML is a private equity-backed MGA underwriting Specialty classes of business. In 2013 the Group will manage more than USD100m of Gross Written Premium though its operating subsidiaries and has quickly established itself as one of the UK's leading Specialty MGA's.
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 go to www.creditinsurancenews.co.uk for further information or call Sally on 0208 337 2171.
The next issue will be with you on Tuesday 5 March