|Dear Credit Insurance Colleague
Welcome to issue 15 of Credit Insurance News Digest: 29 November - 17 December 2012.
This issue is kindly sponsored by S&P Capital IQ.
If you are reading this Credit Insurance News Digest, but have yet to sign-up for regular copies, please add your name to the list of subscribers. You can sign-up to this service at the website www.creditinsurancenews.co.uk.
Credit Insurance News
The Coface Group announces the worldwide launch of TopLiner. TopLiner provides online, non-cancellable, supplemental 'top-up' credit insurance cover for Coface policyholders on a cost per transaction basis. The policyholder determines the amount of cover (between €5,000 and €5 million) and the duration (between 30 and 90 days), and the price is adapted to the risk. Jean-Marc Pillu, Chief Executive officer of the Coface Group, commented: "Created as a result of our experience with the crisis, TopLiner is part of our mission to support the commercial development of companies seeking stronger protection against the risk of overdue payments from vulnerable buyers, whether they are strategic or occasional." To view Coface's full press release go to http://www.coface.com/CofacePortal/COM_en_EN/pages/home/Who_we_are/News?news=121204.
Who’s to blame for the dying Comet? CIFS has published an article, 'Who’s to blame for the dying Comet?' which robustly defends credit insurers against any suggestions that they are to blame for the demise of Comet. Firstly, CIFS advises, 'credit insurers are not charitable institutions,' but are in business to apply detailed knowledge from reputable information sources alongside analytical skills and experience in the assessment of risk. Secondly, CIFS advises that its own policyholders were at risk. . ."If we provided, say £500k cover on a risk we considered unsustainable – as it seems some commentators expect us to do – not only would we face a £450k “hit” if it went down, but at typical margins our insureds would also need to achieve an extra £1 million in sales to compensate. Hardly a recipe for business success – or a long-lasting relationship." To view the full article on CIFS' website go to http://creditindemnity.com/cifs-news/all/whos-to-blame-for-the-dying-comet.
Euler Hermes and MAPFRE announce joint venture“Solunion”. Euler Hermes and MAPFRE have announced “Solunion” as the brand name of their new credit insurance joint venture in Spain and Argentina, Chile, Colombia and Mexico. Solunion, owned 50/50 by the two partners, is to launch operations at the beginning of 2013 in Spain, followed soon after in the 4 Latin American companies. Euler Hermes advises that the name “Solunion” has been selected to indicate a company that is both solutions-focused and which believes in the importance of working closely with its customers. Solunion’s purple logo merges the corporate colors of Euler Hermes (blue) and MAPFRE (red). For more information, go to http://www.eulerhermes.com/mediacenter/news/Euler-Hermes-and-MAPFRE-announce-joint-venture-brand-name-Solunion.aspx.
Atradius recently ran a webinar featuring three of their senior risk team members 'Dissecting the UK Economy'. The webinar includes their views on: The economic highlights of 2012, How differing trade sectors are faring in the challenging economic climate, Key insolvencies; taking a look at private equity, Outlook for the Christmas trading period and beyond into 2013. If you’d like to listen to what they have to say the recording is available at https://webconnect.webex.com/webconnect/lsr.php?AT=pb&SP=EC&rID=6172297&rKey=15d5e430be70114d.
Credit Insurance - A buyer's market? Hanwell Atkinson has published a blog, 'Buyers's Market . . . ?' by Mark Barton, Account Director at Hanwell Atkinson which draws on Mark's considerable experience in the credit insurance industry to take a look at business in the current market. He advises that trade credit insurance premium rates are currently soft and levels of cover are more stable than previous years, and comments: "I believe this is due to the Credit Insurers being better equipped in terms of sourcing buyer information and I.T systems and processes to update monitor their exposures." He continues: 'Credit Insurance is usually a discretionary spend and therefore in hard times it will not be taken up to save money. When insolvencies are on the increase and the market is unstable some prospects feel they just can’t afford it. Maybe a poor analogy but I like it, a parent is driving a their car with a bald tyre because they can’t afford to replace it. The statement surely must be they can’t afford not to replace it.' To view the full blog on Hanwell Atkinson's website go to http://www.hanwellatkinson.co.uk/?p=510.
Chartis' website rebrands back to AIG. American International Group, Inc. (AIG) has announced the successful integration of its European insurance operations into a single insurance company. This marks the most significant milestone in a two-year series of transactions which have concluded with the merger and portfolio transfer of AIG’s principal continental European entity, Chartis Europe S.A., into Chartis Europe Limited, renamed AIG Europe Limited or AIG. As part of this process, Chartis' website rebrand back to AIG has now taken place and includes a new colour scheme which is predominantly blue and gray. Will Clark, Head of UK Trade Credit at AIG, commented: "This is an exciting time for the AIG Trade Credit team in the UK and our change in name signals a further boost to our already known market credentials. Our corporate structure and re-branding puts us in a good position to grasp the opportunities that our markets will offer and build upon the accolades that have come to us through the support of all our clients and business partners. We look forward to more of the same during 2013 and beyond.” To view the website changes, go to www.aig.co.uk/.
Euler Hermes initiates a search for an agency to build its profile in the UK and promote the entire credit insurance industry. PRWeek has published an article, 'Euler Hermes seeks agency to lift UK profile,' (12 December), which advises that Euler Hermes is looking for an agency to handle media relations, profile raising and relationship building in the UK, with a brief that also includes crisis management, media training and identifying key organisations for Euler Hermes to partner with. In addition, Euler Hermes wants the successful PR agency to help educate the public on credit insurance and build consumer interest and trust in the industry. To view the full article on PRWeek go to http://www.prweek.com/uk/news/1163821/euler-hermes-seeks-agency-lift-uk-profile/.
Announcing our new service. Credit Insurance News is launching a series of regular additional specialist business information digests on a wide range of subjects of interest to the industry: from cash flow, late payments and insolvency, to trade sectors and economic outlooks. As with our previous short editorial pieces, our analysis will seek to look behind the immediate facts and figures and uncover variations and contradictions between information sources and press releases to present you with an objective, full and balanced picture. The first paper in late January will be on UK insolvency. Please email firstname.lastname@example.org if you would like to sign-up to this free additional service.
Web poll Final Results: How could the UK the UK government tackle B2B late payment? Many thanks to the 166 subscribers who voted in our web poll. Interestingly, the results still show a polarisation between the 41.3% of voters who consider late payment an unwelcome fact of business which is unlikely to change with or without Government intervention and the 35.9% who felt that it should become common and accepted practice to impose at least minimal late payment charges on late payers. Trailing quite some distance behind, only 17.95% of voters felt the UK Government should do a little more (e.g. naming and shaming clear offenders), and a mere 5.13% felt that the UK is moving in the right direction. This poll is now closed, but do have a go at our lighthearted short Christmas News Quiz at Credit Insurance News.
The short list for the British Credit Awards 2013 has been announced. Congratulations to Credit Indemnity and Financial Services (CIFS) and Euler Hermes who are shortlisted in the 'Credit Insurer of the Year' category and to Euler Hermes for its nomination in the 'Debt Collection Agency of the Year' category. For more details about the evening, the categories and the shortlist go to http://www.icmbritishcreditawards.com/static/shortlist. To view CIFS' response to its nomination go to http://creditindemnity.com/cifs-news/all/cifs-makes-shortlist-for-icm-awards.
Zurich, Euler Hermes and Aon succeed in Global Finance's Awards. Global Finance has published an article, 'World’s Best Global Risk Management Providers 2012. Winners include: Zurich Insurance, Euler Hermes, and Aon. To view the full article on Global Finance's website go to http://www.gfmag.com/tools/best-banks/12144-worlds-best-global-risk-management-providers-2012.html#axzz2ETpvVZ45.
GTR 'Leaders in Trade 2012' readers' poll names BPL, AIG and ACE as winners. Over 6,000 votes were cast in favour of the leading banks, financial institutions, insurers and brokers in the trade finance market, and the winners include: BPL who won the award for 'Best trade credit and political risk insurance broker' and AIG who won the award for 'Best trade credit insurance underwriter.' In addition, Ace was named 'Best political risk underwriter'. A full write-up will appear in the Jan/Feb issue of GTR Magazine. To view full details of the awards go to http://www.gtreview.com/trade-finance/global-trade-review-news/2012/December/GTR-Leaders-in-Trade-results-2012_10501.shtml.
Credit Insurers: New Reports and Video Clips
Atradius publishes its latest Market Monitor on agriculture and food. Atradius' latest market monitor features the agriculture and food sectors´ performance and outlook and stresses that: "to prosper in today’s agri-food industry, size really does matter." The countries covered in detail include: Belgium, Canada, Czech Republic, Denmark, France, Germany, Italy, The Netherlands and Spain. To download the report go to http://global.atradius.com/creditmanagementknowledge/market-monitor/latest-market-monitor.html.
Euler Hermes publishes its latest UK Risk Bulletin. The issue contains sections on the UK economy, insolvency trends, a special report on the eurozone, an examination of the fuel and retail sectors, a regional report on the Republic of Ireland and a client case study of Merco Petroleum. To obtain a copy of the Bulletin, please email EHUKMarketing@eulerhermes.com and mention Credit Insurance News Digest.
India in 2013: Atradius advises of higher growth – but still below long-term potential. Atradius has published its latest Country Report on India, which advises that India's economic performance is still far below its long-term growth potential, with the 5.8% growth rate forecast for 2012 far below the long-term potential growth rate of 9%. Looking forward, the economy is forecast to grow 6.5% in 2013. To view the Report go to http://global.atradius.com/creditmanagementknowledge/india/india-overview.html.
Interview with Director of Atradius Collections 2012. Atradius has published a new clip on YouTube in which the Managing Director of Atradius Collections, Raymond van de Loos, presents an introduction to Atradius Collections in which he advises that 93% of clients who use its services find that their relationship with late payers is not harmed. In addition, he advises that Atradius Collections' success rate is 62% - excluding insolvencies and case withdrawals. To view the clip go to http://youtu.be/JWNw5Ya4H6I.
Aircraft industry at all-time high while air transport encounters some turbulence. Euler Hermes has published a new sector analysis of the global aircraft industry which advises that, for the second consecutive year, the global aircraft industry should record solid growth, with a 14% rise in aircraft delivered. Euler Hermes also expects this positive trend to continue into 2013 (deliveries +10%), fueled again by virtually across-the-board increases in production rates. In addition, the traditional European air transport industry - loss-making in 2012 - could return to break-even in 2013 following major restructuring now underway. To view Euler Hermes' detailed press release go to http://www.eulerhermes.com/mediacenter/news/Aircraft-industry-at-all-time-high-while-air-transport-encounters-some-turbulence.aspx.
Interview with Atradius' Global Director. Atradius has published a new clip on YouTube in which Martie van Velsen, Atradius' Global Director, talks about how Atradius can support multinationals around the world by proving tailor made products and management and business information. The interview also explores Atradius' global growth in the last couple of decades, and the risks and opportunities provided by new and emerging markets. To view the clip go to http://youtu.be/zkuYREaumjw.
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.
Dates for the STECIS Trade Credit Insurance and Surety (BASIC & 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. Both STECIS training seminars are two day events, are highly interactive and cover technical and practical knowledge on respectively Trade Credit Insurance and Surety Bonds, the theory of underwriting, in-depth analysis of industry developments, the terminology and the current market. 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 email@example.com or call +31 20 528 5170.
Career Opportunities and New Appointments
Production Underwriter to develop Trade Credit book, City Of London, £90k-120k. An exciting opportunity for an experienced Trade Credit Underwriter with strong technical credit risk or financial background to join a Global organisation within a leading Trade Credit Unit. This position is a new role and the client are looking to develop a German book of business and support the London Trade Credit team based in London with the view to establishing a team based in Germany after 12 - 18 months. The candidate will have strong marketing and commercial skills and will need to work with various distribution channels. For more information please contact Edward O`Dwyer directly on 02073378819 or email Edward@highfinancegroup.co.uk. To apply, please go to http://www.aptrack.co/jobs/d3xy58hf3.
Euler Hermes announces new CEO for Euler Hermes Australia. Euler Hermes has announced that Chris Doubé has been appointed chief executive officer for Euler Hermes in Australia and New Zealand. He succeeds Babette Bottin, who will be leaving the company to pursue other opportunities. Chris Doubé has over 11 years experience within the trade credit industry industry in Australia, holding various management positions with Coface, QBE Trade Indemnity and Dexta Corporation. Until May 2012, he was country manager of Coface Australia, and most recently served as general manager of Trade Credit Underwriting Agency at National Credit Insurance Brokers (NCI). To view Euler Hermes' press release go to http://www.eulerhermes.com/mediacenter/news/Euler-Hermes-appoints-Chris-Doube-country-CEO-of-Australia-and-New-Zealand.aspx.
Euler Hermes board appointments, changes in leadership team responsibilities. The supervisory board of Euler Hermes has announced a departure and two nominations related to the Group board of management and, in parallel, has announced changes in responsibilities for two current members of the company’s leadership team. Nicolas Hein, chief financial officer and member of the Euler Hermes board of management, has resigned from the board and will be replaced by Frédéric Bizière with immediate effect. Paul Overeem, currently head of region for Euler Hermes Northern Europe, is nominated to the Euler Hermes Group board of management, effective January 1, 2013. Ludovic Sénécaut, currently head of region for Euler Hermes France, will become head of region for Euler Hermes Northern Europe on January 1, 2013. In addition, Nicolas Delzant, currently CEO of Euler Hermes World Agency, will become head of region of Euler Hermes France. His replacement will be announced shortly. To view Euler Hermes' press release go to http://www.eulerhermes.com/mediacenter/news/Euler-Hermes-board-appointments-changes-in-leadership-team-responsibilities.aspx.
Business Information: Recommended Reports and Business Shorts
Conditions deteriorate for UK manufacturers. EEF has published its 2012 Manufacturing Outlook, a quarterly report on the trends in UK manufacturing produced by EEF in partnership with BDO. The report advises that both the the UK economy and manufacturing have experienced challenging conditions during 2012 and, in both cases, output in 2012 is likely to be lower than in 2011. In addition, the balance of responses on export sales have turned negative for the first time since the end of the 2008/9 recession. To view the full report go to http://www.eef.org.uk/publications/surveys/Manufacturing-Outlook.htm. (Note: EEF members can download this report by logging in and clicking the download link on the right hand side. Non-members will need to first register their details with EEF).
Latest data shows that the UK five-year survival rate for businesses born in 2006 was 45%. The Office for National Statistics (ONS) has published an analysis which shows that the UK five-year survival rate for businesses born in 2006 and still active in 2011 was 45%. By region, the highest five-year survival rate was in Northern Ireland at 50.5% and the lowest was in London at 41.8%. By sector, the highest five-year survival rates were the health sector at 60% and education with a survival rate of 52.8%, while Hotels & catering was the lowest with only 35.7% of businesses surviving for five years. Altogether, nearly a million businesses shut down in the three-year period, To view the ONS' detailed findings go to http://www.ons.gov.uk/ons/rel/bus-register/business-demography/2011/index.html. Adapted from data from the Office for National Statistics licensed under the Open Government Licence v.1.0.
Deloitte's latest Global Economic Outlook predicts that 2013 will be an interesting year. Deloitte has published its latest, Global Economic Outlook Q4 2012, which advises that the world economy is at a crossroads. In Europe, the leaders of the Eurozone are moving slowly toward more integration, while periodically fighting back against new crises. In the United States, slow growth continues, but various forces seem destined to push the economy either toward recession or faster growth. In China, the economy has landed softly, but the next steps depend on the decisions of a new leadership. And in India, the government has attempted to kick-start the reform process just as the economy seems to have stalled. This means, Deloitte advises, that at the very least, the next year will be an interesting one. To download the Outlook go to http://dupress.com/collection/economic-outlooks/global-economic-outlook-q4-2012?id=gx_dcom_home#global-economic-outlook-q4-2012.
UK SMEs continue to struggle with cash flow problems. The latest Baker Tilly SME Distress Monitor (results drawn from over 25,000 SMEs), shows that nearly a quarter (24%) of SMEs have insufficient funds to pay their short-term debts, and as a result may be unable to fund any future recovery. However, it’s not all doom and gloom; despite the research showing that over one in five businesses (21%) reporting a fall in pre-tax profits of 50% or more, this was a slight improvement on the previous year’s figure of 24%. Figures for sales also appeared to be holding up more strongly with 14% of businesses saying they had seen sales fall by around 10%, which was lower than in the previous year. To view Baker Tilly's full press release go to http://www.bakertilly.co.uk/media/news/struggle-with-debt.aspx. To download a report with the UK national results or to view regional reports go to http://www.bakertilly.co.uk/publications/Pages/sme-distress-monitor.aspx.
BCC forecast UK GDP growth of -0.1% in 2012, followed by positive but modest growth of 1.0% in 2013. The British Chambers of Commerce (BCC) has published its latest economic forecast, which sees UK growth in 2012 revised upwards from -0.4% to -0.1%. However, forecasts for the next two years have been downgraded from 1.2% to 1.0% in 2013, and from 2.2% to 1.8% in 2014. David Kern, BCC Chief Economist, commented: “We expect quarterly growth to increase gradually over the next two years, but we have to accept that it will remain modest and below-trend for some time. Although there will be a slow improvement over the medium-term, GDP will only return to its pre-recession levels at the end of 2014." To view the BCC's press release with a link to the full forecast go to http://www.britishchambers.org.uk/press-office/press-releases/bcc-economic-forecast-uk-growth-upgraded-for-2012-but-revised-down-for-2013-and-2014.html#.UL5hPNdKR9s.
Survey indicates that fewer SMEs consider external finance as an option for their business. BDRC Continental has published its sixth quarterly SME Finance Monitor, which investigates the availability of external finance for the UK SMEs, and has found that use of external finance is now at its lowest level since early 2010. 57% of all SMEs neither use any external finance, nor have any immediate plans to do so – and this proportion has increased over time. Use of ‘core banking products’ such as loans, overdrafts and credit cards also declined by five percentage points year-on-year (39% Q3 2011 down to 34% in Q3 2012). To view the full report go to http://www.sme-finance-monitor.co.uk/.
Prompt Payment Code: Four years on UK’s largest companies pay nine days faster. Four years after the Prompt Payment Code (PPC) was launched, Experian has revealed that the difference between the late payment times of the largest firms (more than 1,000 employees) and the smallest firms (up to 25 employees) has improved significantly, falling by almost nine days during this period - driven by better payment behaviour amongst the UK’s biggest companies. The UK’s largest companies, who were paying on average 25 days slower compared to smaller companies in December 2008, have now improved the difference to 16 days. The new research by Experian also looked at average payment performance for UK companies between December 2008 - when the PPC was launched - and November 2012., and shows that since the launch of the PPC, average DBT initially dropped from 23.5 in December 2008 to 21.1 in July 2010, rising to a high of 27.7 in November 2010 and has since stabilised. To view Experian's news release go to http://press.experian.com/United-Kingdom/Press-Release/prompt-payment-code.aspx.
Who's UP and Improving: Positive News to end the Year
UP: Berkeley has reported a 40.7% rise to £142.2 million in pre-tax profits in the six months to 31 October, while revenue increased by a very significant 69.4% to £686 million. This is primarily due to benefits from overseas demand for London residential property, returns on cheap land acquired during the financial crisis and the sale of residential homes across mix-use developments in London and the South East. Berkeley's Chairman, Tony Pidgeley, commented that the results: “demonstrate the value created by acquiring land at the right point in the economic cycle."
UP: Sports Direct has announced a 25% rise to £125.2 million in pre-tax profits and 22.5% increase in sales revenues to £1.09 billion for the six months to 28 October. This was largely due to the positive impact of London 2012. The company now says that it is on target to meet its full-year financial targets. It is also understood that the sports giant and its owner Mike Ashley are currently in talks to buy House of Fraser.
UP: Asos has announced that, compared to 2011, in the three months to November 30 it achieved a 24% jump in sales in the UK to £62 million and a 34% increase in international sales (particularly in the U.S.) to £103.7 million. In addition, its active customer base rose by 35% worldwide. Looking ahead, the company is expecting a strong Christmas and has plans to launch in both China and Russia by Autumn 2013.
UP (in the UK): Carpetright has announced a 46% rise to £5.4 million in group underlying operating profit in the 26 weeks to October 27. This is due to a small increase of 0.7% in like-for-like UK sales, which account for around 80% of group sales, which helped counteract a decline in its European business (especially in the Netherlands) and the impact of one-off items. The company advises that it is on track to meet its full-year expectations.
UP: Stagecoach, the transport group which is one of the largest bus and coach operators in the UK, has announced a 39% rise to £123.7 million in half-year profits to 31 October - primarily due to strong growth in its regional bus division. The company's rail division (South West Trains, Island Line, East Midlands Trains and a 49% share in Virgin Rail Group), also performed strongly - recovering from a £6.9 million loss in 2011 to a profit of £22.7 million.
Improving: Although Supergroup recently reported that for the six months to October 28 it had experienced a 32% fall in pre-tax profit from £20.3 million to £13.9 million, this is mainly due to the negative impact of a writedown in the value of its European business bought in 2010. In fact, the company's retail revenue actually increased by 26.4%, and like-for-like sales at shops in Britain also rose by 3.9%. In addition, the company reported a positive sales outlook in the run-up to Christmas and commented in the press that it now believes that is now back on the right tracks.
Improving: Mulberry warned in October that in the six months to 30 September that it had made a pretax profit which at £10 million, was £5.6 million lower than in 2011. This was largely due to slowing sales in Asia and the rising cost of leather. However, since then the company's outlook has improved considerably, with like-for-like sales 11% higher and a rise of 19% in total revenues. Looking ahead, Mulberry now intends to open 17-20 new stores globally in the coming year with an additional factory due to open in the UK.
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Credit Insurance News Digests: Sponsorship
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The next issue will be with you on Tuesday 15 January
Best wishes for Christmas and New Year