Welcome to issue 26 of Credit Insurance News Digest, 24 July 2013.
Credit Insurance News
In tough economic times credit insurance can become a lifeline. Marsh has published a report, 'European Credit Risks and the Effects on Premium Rates', which advises that there has been a large increase in claims notifications in Europe since the last quarter of 2012, particularly in the retail, construction, paper and engineering sectors and in the emerging economies of Central and Eastern Europe. As a result, trade credit premium rates have risen in Europe, although Marsh advises that reductions can still be gained on loss free or well-managed programmes. In addition, Europe has experienced a more conservative view on credit appetite from some insurers compared to any other region. To view Marsh's news release with a link to the full report go to http://uk.marsh.com/NewsInsights/Articles/ID/31463/European-Credit-Risks-and-the-Effects-on-Premium-Rates.aspx.
Credit Insurance News
Credit Insurance Reports
Industry Events and Offers
Business Information: Recommended Reports and Business Shorts
UK Retailers: Who's UP/Who's DOWN
Euler Hermes UK launches a new online portal to enhance broker relationships. A new UK online portal that allows brokers immediate access to credit insurance documents, in-depth reports, economic data and essential news on forthcoming events has been launched by Euler Hermes. The Euler Hermes UK Broker Portal is divided into two sections: a public section with information about Euler Hermes, its products and a range of available marketing material; a private section only accessible to brokers who register on the Portal. This secure area contains specific information for each broker which they can access from anywhere, enabling them to respond quickly to customer needs. For further information and details of how to register on the Euler Hermes UK Broker Portal, go to www.broker.eulerhermes.co.uk or contact firstname.lastname@example.org.
Insulation giant launches a credit insurance service for subcontractors. Construction Enquirer has published an article which announces that SIG has teamed up with specialist insurance broker Credit Risk Solutions Ltd (CRS) and underwriter Credit Indemnity & Financial Services (CIFS) to launch a new credit insurance service for subcontractors. SIG’s Director of UK Credit Management, Simon Johnson, said: “We’re seeing many of our customers considering credit insurance, but struggling to find a solution that takes into account the complexities of construction financing structures. The service was launched to fill this gap; giving sub-contractors direct access to both competitive rates and cover plans designed specifically to recognise construction businesses’ fluid finance requirements.” To view Construction Enquirer's article go to http://www.constructionenquirer.com/2013/07/01/insulation-giant-launches-credit-insurance-for-subbies/.
Less than 1% of Canadian companies are currently using receivables insurance. Canadian Underwriter.ca has published an article, 'New Canadian association says there's major opportunity in receivables insurance market', which advises that, according to the Receivables Insurance Association of Canada, less than 10,000 of Canada’s 1.1 million employer businesses currently use trade credit insurance. That’s compared with market penetration of up to 30% in European countries and 15% in the United States, the association says. The association is now inviting brokers to help grow what it says is a $200 million market to $350 million within five years. To view the full article on canadianunderwriter.ca go to http://www.canadianunderwriter.ca/news/new-canadian-association-says-theres-major-opportunity-in-receivables-insurance-market/1002393245/.
Management of a Credit Insurance policy is often more critical than the policy itself. The Channel has published an article, 'Don't wait to check your parachute until you're out of the plane', by Eddie Pacey which cautions that management of a credit insurance policy is often more critical than the policy itself. Mr Pacey advises: "Insurers and their risk teams are no mugs – they watch and analyse the sector closely and will provide cover only when it clearly makes sound sense to do so. Where they may provide cover on higher risk clients and markets the premium rate will naturally reflect the risk taken . . . "Zombies", of course, may not qualify for cover no matter how high the premium". To view the article on The Channel's website go to http://www.channelregister.co.uk/2013/06/17/lost_meelions_on_reseller_failures_credit_is_a_risky_biz/.
Euler Hermes expands its U.S. services with the addition of a specialist Excess of Loss (XoL) underwriting team based in New York. Euler Hermes’ XoL solution provides large and multinational companies protection from exceptional trade credit losses. The policy features non-cancellable coverage, group buyer limits, full credit limit service, and local policies for foreign subsidiaries. Jochen Duemler, CEO and head of Euler Hermes Americas Region, commented: “Following the XoL policy’s success in other countries and increased U.S. market demand, we believe a specialist team can offer our large and multinational clients useful new opportunities to grow safely and successfully.” John Pellew will become managing director-head of XoL (Americas). To view Euler Hermes' press release go to http://www.eulerhermes.com/mediacenter/news/Pages/Euler-Hermes-broadens-US-credit-insurance-services.aspx.
Coface Country Risk Conference highlights risks of continued austerity in Europe. Coface has announced that it is downgrading its GDP growth forecast for the Eurozone. The announcement, made at Coface’s recent Country Risk Conference in London, reflects concerns about Germany, and is in contrast with a more positive outlook for the USA and Japan. Revealing Coface's new growth predictions, the company’s Chief Economist, Yves Zlotowski, said: "We do not believe there will be a recession in Germany but German exports are being hampered by the recessions in the core Eurozone countries of France, Italy and Spain which have severely curbed domestic demand. This has prompted us to downgrade our forecast for Germany to just 0.3% in 2013, and we are further downgrading the Eurozone as a whole to -0.6% retraction as austerity continues to bite and the risk of payment defaults increases." To view Coface's press release go to http://www.cofaceuk.com/CofacePortal/UK/en_EN/pages/home/who-we-are/news?news=130618.
QBE Australia stresses that it has no plans to exit the printing industry. ProPrint has published an article, 'Geon faced credit crunch in years before failure', which reports that tensions between Australian paper merchants Geon and QBE Australia played out over almost two years before the print group’s collapse. According to an extensive creditors report prepared by administrator PPB Advisory, in April-May 2012, QBE indicated it was considering exiting the industry and no longer offering credit insurance. However QBE's Australia spokesperson told ProPrint: “QBE is a key underwriter in the printing space and we have no plans to exit the industry. As a trade credit insurance specialist, we continue to write risk across a variety of industries and regions.” To view the article on ProPrint's website go to http://www.proprint.com.au/News/349283,geon-faced-credit-crunch-in-years-before-failure.aspx#disqus_thread.
Coface launches credit insurance services in Croatia. On 1 July 2013, the first day of Croatia’s membership of the European Union, Coface simultaneously expanded its network in Central Europe with the launch of its credit insurance services in Croatia. Coface Group CEO Jean-Marc Pillu said: 'Central Europe is a dynamic and experiencing positive growth region in which Coface continues to build its core credit insurance business to complement its position as the leader in business information. . . This is a further stage in the expansion of its already strong presence in this emerging region, one offering enormous potential – where premiums grew strongly by +14.9% in 2012.' Coface is currently the only private sector provider of credit insurance solutions in Croatia. To view Coface's news release go to http://www.coface.com/News-Publications/News/Coface-is-expanding-further-in-Central-Europe-to-offer-credit-insurance-in-Croatia.
More insurers are looking to take on political risks. 4-traders has published an article, 'As political risks proliferate, insurers step up cover', in which Isabelle Girardet, head of the Transactional Cover Unit at Euler Hermes, advises that there is more capacity arriving in the political risk market and that the market has grown by about 10 or 20% over the last five years. Nuria Gorog, head of credit and political risk at Zurich Insurance Group, Kim Brownlees, a political risk specialist at Arthur J Gallagher & Co, and Andrew van den Born at Willis Group Holdings Plc are also quoted. To view the article on 4-trader.com go to http://www.4-traders.com/EULER-HERMES-4642/news/As-political-risks-proliferate-insurers-step-up-cover-17079728/.
QBE Australia plans to sell its National Credit Insurance Brokers. The Insurance Insider has advised that Steadfast Group, the largest insurance broking network in Australia, has announced a deal to buy National Credit Insurance Brokers (NCIB) from QBE Australia as part of its strategic expansion. The deal, thought to be in the tens of millions of dollars, will be funded by Steadfast's planned IPO, which is slated to take place next month. For more information go to http://www.insuranceinsider.com/-1244313/9. (Note: a subscription is required to view the full article).
Solunion integration complete with the launch of single operations platform. Solunion, the joint venture owned equally by Euler Hermes and MAPFRE, has completed the integration of its teams in Spain with the launch of a single platform to manage trade risks and unify its credit insurance offerings to new clients. Solunion now presents a single face to the market as an independent company. To view Euler Hermes press release go to http://www.eulerhermes.com/mediacenter/news/Pages/Solunion-integration-complete-with-launch-of-single-operations-platform-.aspx.
Marsh Named Best Trade Insurance Broker in North America, Europe, the Middle East and Africa. For the second year in a row, Marsh has been named Best Trade Insurance Broker in North America in Trade Finance Magazine’s 2013 Awards for Excellence. The firm was also named Best Insurance Broker in the Europe, Middle East, and North Africa region. To view Marsh's press release go to http://usa.marsh.com/NewsInsights/MarshPressReleases/ID/32187.aspx.
Solunion named Project of the Year at Dirigentes Excellence awards. Solunion Seguros de Crédito has been named 'Project of the Year' in the 19th annual Dirigentes magazine Excellence Awards. The Excellence awards are based on a combination of managerial performance and value and contribution to society. To view Euler Hermes' full press release go to http://www.eulerhermes.com/mediacenter/news/Pages/Solunion-named-Project-of-the-Year-Dirigentes-magazine-Excellence-awards.aspx.
Coface wins the Le Fonti International Award. On 27 June, Coface Italy was awarded the 2013 Le Fonti International Award in the special categories ‘Excellence in Credit Insurance’ and ‘Excellence in Services to Companies’. To view Coface's press release go to http://www.coface.com/News-Publications/News/Coface-wins-the-Le-Fonti-International-Award-another-major-acknowledgment-for-Coface-Italy.
Credit Insurance Reports
The UK is the country with the lowest ratio of trade credit insurance relative to GDP. Finnacord's detailed new report, 'Trade Credit Insurance in Europe', (research on 10 European countries) estimates that the value of gross written premiums for trade credit insurance was €3.98 billion for 2012 (€2.52 billion domestic trade credit insurance, €1.46 billion export trade credit policies). In addition, Finnaccord calculates that the total market was worth €3.88 billion in 2008, meaning that although it grew at a nominal compound annual rate of 0.6% between 2008 and 2012, after taking inflation into account, this translates into an annual decline of around 1.6%. Germany has the largest trade credit insurance market in Europe in terms of premiums, and at €923.6 million accounted for an estimated 23.2% of the regional total in 2012; while the second largest market in terms of value was France. Belgium had the smallest market in absolute terms, although the UK is the country with the lowest ratio of trade credit insurance relative to GDP. Looking ahead, the report predicts that the market for trade credit insurance across the ten countries will grow between 2012 and 2016, increasing to an estimated €4.27 billion by 2016. The full report is available from http://www.finaccord.com/uk/report_trade_credit_insurance_europe.htm and costs £2995. Individual country reports are available for £595.
Coface warns that the Italian 'business model' is stuck in a vicious circle. Coface's latest Panorama report warns of worsening company payment practices in Italy (the rate of late payment is now seven times greater than in France), reflecting the severity of the recession, the preponderance of fragile small companies and the sheer scale of late payment within the public sector. With one of the most industrialised economies in the Eurozone, Italy has seen seven consecutive quarters of GDP contraction and, looking forward, is expected by Coface to contract by -1.7% in 2013 (compared with -0.6% for the Eurozone). To view the Panorama and press release go to http://www.cofaceuk.com/CofacePortal/UK/en_EN/pages/home/who-we-are/news?news=130702.
Euler Hermes advises that the global economy is at a crossroads. According to Euler Hermes' latest Economic Outlook, global economic growth will slow to +2.4% in 2013 before rebounding slightly to +3.1% in 2014. Wilfried Verstraete, CEO, Euler Hermes Group, commented: “Leading indicators such as global GDP growth and manufacturing output suggest a delay in the anticipated 2013 year-end recovery in the global cycle . . . A mid-term global ‘crossroads’ may be emerging as three growth drivers decouple: regional trade relationships, fiscal policy and regulatory institutions. The next economic scenario – improved growth and sovereign risk, or recession and volatility - will be determined by the degree to which global demand and wealth impacts the real economy, monetary policies are restored and realigned, and competitive playing fields become more balanced.” To view Euler Hermes' news release with a link to the full Outlook go to http://www.eulerhermes.com/mediacenter/news/Pages/The-global-economy-at-the-crossroads.aspx.
CIFS' Natalie Pelczer on the Food Sector. According to Natalie Pelczer, CIFS' Risk Underwriter specialising in the sector, food businesses are operating in an uncertain climate having been hit by a series of double – and even triple - whammies over the past year. While there may be some up-side (for example, a move towards higher quality, higher value products and a greater propensity to buy British), Natalie also stresses that for suppliers to the sector three considerations are essential in taking credit decisions. First, it’s important to establish precisely where a potential new customer stands in the production chain so that the effect on an individual business of global and domestic developments can be analysed. Next, late payment is likely to be a significant issue in the near term as companies in the sector are squeezed at both ends of the supply chain. Thirdly, it’s vital, that suppliers are satisfied their customers have a sufficient cushion to survive a catastrophic sectoral event. To view the article on CIFS' website go to http://creditindemnity.com/natalie-pelczer-on-the-food-sector/.
Atradius examines the many opportunities of trading with Mexico. Atradius' new report, 'Trade successfully with Mexico’, explains what can make or break export ventures to Mexico and stresses that foreign suppliers need to take time to understand many aspects of the Mexican marketplace. For instance, while ‘time is money’ might be a familiar business saying in other countries, Atradius advises that it certainly isn’t the case in Mexico, where the building of trusted relationships and lengthy negotiations are the norm. However, according to the report, the wide range of planned infrastructure projects, covering energy technology, telecommunications, road, rail, ports and aviation, combined with President Peña Nieto’s pledge to break the monopolistic hold over sectors like telecommunications, offer real opportunities for foreign suppliers and investors. To view the full report go to http://global.atradius.com/corporate/pressreleases/mexico-a-compelling-export-market.html.
Euler Hermes advises that insolvencies are on the rise across the entire French business landscape. Euler Hermes has published its latest report on French business growth which advises that it has revised its French GDP growth forecast downward for 2013 (-0.3%) before a return to modest growth (+0.4%) in 2014. The report also warns that insolvencies remain at a very high level in France, with more than 26,600 since the beginning of the year (+0.8%), and more than 61,250 over 12 months (+3.8%). These figures are near the records set 1993, 1996 and 2009, supporting an outlook for increased defaults during the full year 2013 (+2% to approximately 62,000), before, at best, a slight decline in 2014. To view Euler Hermes' full news release go to http://www.eulerhermes.com/mediacenter/news/Pages/Insolvencies-on-the-rise-across-the-entire-French-business-landscape.aspx.
Coface predicts contrasting fortunes for two important UK export markets. In its latest Panorama Report, Coface has updated its assessment for 11 different countries. Amongst these, Ireland’s risk assessment has been placed under positive watch, whilst South Africa’s risk assessment has been downgraded. Grant Williams, Risk Underwriting Director at Coface in the UK & Ireland commented: “Western economies such as Ireland were at the epicentre of the 2008 crisis but it has also had a ripple effect through other countries which depend on overseas exports. South Africa was one of the fast-expanding BRICS economies but has been hit by the slowdown in European export markets. For the full Panorama report, providing the risk evaluations for Ireland, South Africa and for other countries, including Italy, Japan, the Czech Republic and Slovenia, go to http://www.cofaceuk.com/CofacePortal/UK/en_EN/pages/home/who-we-are/news?news=130628.
To view Coface's World Growth Forecasts for June 2013 go to http://www.coface.com/News-Publications/News/World-growth-forecasts-updated-June-21013.
Payment defaults in Eastern Europe rose to 3% of total invoice value over the past year. Atradius has published its latest Payment Practices Barometer for Eastern Europe which advises that the use of trade credit amongst Eastern European countries has declined overall. In addition, compared to one year ago, the average overall credit term decreased by 4 days, with the largest decrease (11 days) being observed in the Czech Republic. On average, the credit periods extended by respondents to B2B customers do not vary much between domestic (averaging 28 days) and foreign sales (averaging 33 days), suggesting a fairly consistent perception of trade credit risk arising from B2B sales to domestic and foreign customers. To view a summary of findings and to link to the full report go to http://global.atradius.com/creditmanagementknowledge/publications/atradius-payment-practices-barometer-group-eastern-europe-june-2013.html.
Victims of sluggish growth, businesses in Central Europe will not emerge from the crisis in 2013. Coface has advised that after the 2009 recession and in the context of the crisis in the euro zone, Central European companies are very vulnerable. Insolvencies rose sharply in nearly all of the countries in this region, and in much larger proportions than in Western Europe, from +7% in Slovakia to +27% in the Czech Republic in 2012. The highest concentration of insolvencies was observed in construction (30% of the total) as a result of a gradual decline in production, and in retail (23%) due to intense competition and the loss of consumer confidence. To view Coface's press release go to http://www.cofaceuk.com/CofacePortal/UK/en_EN/pages/home/who-we-are/news?news=130624.
Atradius predicts a 2% decrease in Japanese corporate insolvencies in 2013. Atradius has published its latest Country Report on Japan which advises that, since 2009, annual corporate insolvencies in Japan have decreased and that Atradius expects this trend to continue in 2013 - although less so than in previous years - with a 2% decrease predicted. In Q1 of 2013 the Japanese economy grew 1% on the previous quarter, driven by domestic demand, and, overall economic activity is expected to increase 1.6 % in 2013 and 1.9 % in 2014. The outlook is best for the Agriculture, Financial Services and Food sectors - which are all rated 'Good'. To download Atradius' report go to http://global.atradius.com/creditmanagementknowledge/japan/japan-cr-overview.html.
Euler Hermes Italy: Updated benchmark on the business use of credit management tools. Euler Hermes has published the results of a study of the main credit management tools used by Italian businesses which has found that credit insurance is being used as a valid tool for mitigating risk for 52% of the businesses surveyed that operate in domestic and export markets. The research also found that in the past five years the use of credit insurance has increased, mainly among medium-sized and large company respondents (especially in the northeast and northwest). Perceived experience the key criteria for most respondents when selecting a credit insurance provider. To view Euler Hermes' press release go to http://www.eulerhermes.com/mediacenter/news/Pages/Euler-Hermes-Italy-Updated-benchmark-on-the-business-use-of-credit-management-tools.aspx.
California agrifood industry is set to seize growth opportunities. Euler Hermes’ has published a new report, 'California: The Agrifood Valley at Risk', which advises that although the fluctuations of commodity prices during the past six months may continue to affect profits for the California agrifood sector, improvements may lie ahead. “For the last six years, food manufacturing in California, as well as in the U.S. generally, has faced fluctuating agricultural raw material prices,” said Dan North, lead economist, Euler Hermes North America. “However, there is light at the end of the tunnel. The industry is well-positioned to capture economic growth through the export of a wide range of products.” To view Euler Hermes' press release go to http://www.eulerhermes.com/mediacenter/news/Pages/California-agrifood-industry-is-set-to-seize-growth-opportunities.aspx.
New corporate video from Coface. Coface has published an excellent new short corporate video on YouTube which provides an overview of Coface and its services, as well as the benefits of trade credit insurance. To view go to http://youtu.be/6PvSn0MijTI.
Euler Hermes' video clips explains how clients can optimise their risk management with Eolis. Euler Hermes has published a short video guide to Eolis, its online system for clients. Some of the features offered by Eolis are examined, including the facility to see all limit requests, overdue declarations and the debt collection process. To view the clip go to http://youtu.be/XP9iMBCZack.
Industry Events and Offers
Equinox Seminar: 'Banks, insurers, and the return to growth.' 3-5pm on Tuesday 3 September 2013 at The Old Library, Lloyd's of London.
Equinox Global has announced that it will be hosting a seminar, 'Banks, insurers, and the return to growth', from 3pm to 5pm on Tuesday 3 September 2013 at The Old Library, Lloyd's of London, 1 Lime Street, London EC3M 7HA. A panel of experts from different parts of the financial services industry will advise businesses on how to emerge from the long economic slowdown, followed by refreshments and an opportunity for informal discussion with the speakers and other guests. To register your wish to receive a formal invitation, please contact mike.holley @equinoxglobal.com.
Trade Credit Insurance Summit, 23-25 September, The Address Dubai Marina, Dubai.
IIR has announced that the Middle East's inaugural Trade Credit Insurance Summit is to be held on 23-25 September in Dubai. The two day conference will present a rare 360 degree perspective on the growth of this dynamic sector across the region from all stakeholders including C Level Corporate Executives, Government Representatives, ECAs, Multilaterals and Ex-Im Banks, Financiers, Trade Credit Insurers, Re-Insurers, Brokers, Lawyers, Credit Information Agencies, Consultants etc. The conference will include: an analysis of the role of trade credit insurance in the larger global trade landscape, an exploration of contrasting models of export credit agencies and their role in increasing intra-regional trade and a discussion of best practice in leveraging trade credit insurance for accessing trade finance, securing geographic business growth and increasing working capital. For more information go to http://www.iirme.com/tradecreditinsurance.
Business Information: Recommended Reports and Business Shorts
The UK recovery accelerates with a 39% decrease in 'Critical' distress. According to the latest Begbies Traynor Red Flag Alert research for Q2 2013, levels of ‘Critical’ financial distress among UK businesses have fallen by 39% compared to Q2 2012; the second highest year on year decrease since the beginning of 2011. Leading the recovery with significant reductions in ‘Critical’ financial distress during the period are the Construction, Professional Services and Financial Services sectors, which decreased by 48%, 59% and 30% respectively year on year. To view Begbies Traynor's full press release go to http://www.begbies-traynorgroup.com/default/news/13-07-15/uk_recovery_accelerates_with_39_decrease_in_critical_distress.aspx.
New Study shows how late payment drains SMEs of investment. According to new research by Bibby Financial Services, late payment is twice the problem for firms in 2013 than it was four-years-ago and, as a result, the number of SMEs with cash available to invest has slumped from 20% to just 2%. In 2009 almost one in five (19%) said debtors were paying quickly. This has now halved to less than one in ten (8%) in 2013. To view Bibby's full news release go to http://www.bibbyfinancialservices.com/meta/press/news/2013/7/sme-cash-availability.aspx.
The number of businesses with serious cash flow problems hits a new high. 134,000 UK businesses are struggling to pay their debts when they fall due, the highest figure in the last 12 months, according to the latest ‘zombie business’ tracker from R3. An extra 24,000 businesses are in this position now compared to 12 months ago. Although the number of ‘zombie businesses’ – those that can only pay the interest on their debts – has fallen over the last year from 146,000 to 108,000, the rise in businesses with acute cash flow problems indicates that the outlook for struggling businesses is deteriorating. To view R3's news release go to http://www.r3.org.uk/index.cfm?page=1114&element=18885&refpage=1008.
Good news for businesses as insolvencies fall again year-on-year. The latest Business Insolvency Index from Experian has revealed that the overall business insolvency rate for the UK fell to 0.07% in June from 0.08% in June 2012. This is the second consecutive month that the rate has fallen year-on-year – in May the rate was down from to 0.08%. The majority of UK regions have showed continued improvement. Of the UK’s top five biggest industries, the building & construction industry saw yet another year-on-year fall with its insolvency rate down from 0.17% in June 2012 to 0.12% in June 2013. To view Experian's press release go to http://press.experian.com/United-Kingdom/Press-Release/good-news-for-businesses-as-insolvencies-fall-again-year-on-year.aspx.
BCC advises the UK economy has made further progress, but that risks remain. The latest British Chambers of Commerce’s Quarterly Economic Survey (QES) indicates that the UK economy has made further progress, but that there are still some risks at home and abroad that could derail the recovery. The new survey shows that most key balances strengthened in Q2 2013 compared with the previous quarter, with the services export deliveries balance reaching its highest level (+36%) since the survey began. The findings suggest that the economy will continue to strengthen gradually over the next year, with growth slowly improving. To view the BCC's news release and link to the full report go to http://www.britishchambers.org.uk/press-office/press-releases/bcc-quarterly-economic-survey-recovery-gathering-strength,-but-risks-remain.html#.UevwY22wU0w.
IMF forecasts that global growth will remain subdued at slightly above 3% in 2013 - the same as in 2012. This is less than forecast in the April 2013 World Economic Outlook (WEO), driven to a large extent by appreciably weaker domestic demand and slower growth in several key emerging market economies, as well as a more protracted recession in the euro area. In addition, the IMF predicts that the euro area will remain in recession in 2013, with activity contracting by over ½%. To view the IMF' news release go to http://www.imf.org/external/pubs/ft/weo/2013/update/02/.
June retail sales confirm that the retail sector is recovering. The latest BRC-KPMG Retail Sales Monitor June 2013 has reported that UK retail sales values were up 1.4% on a like-for-like basis from June 2012, when they had increased 1.4% on the preceding year. On a total basis, sales were up 2.9%, just ahead of the year-to-date average of 2.8% and better than the 12-month-average of 2.4%, confirming this year’s pick-up. In real terms, growth was 2.3% over the last six months against 1.5% over the last twelve months. To view KPMG's news release go to http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/NewsReleases/Pages/BRC-KPMG-Retail-Sales-Monitor-June-2013.aspx.
What are the greatest threats to insurers? PwC’s latest study- Banana Skins- brings out top 2013 risks for the industry. PwC has published the results from its biennial survey, 'Insurance Banana Skins,' which examines risks facing the industry, and includes insights from over 660 insurers, regulators and close observers of the industry across 54 countries. This survey has been produced with the Centre for the Study of Financial Innovation and is aimed at senior executives in the insurance industry. To download a copy go to http://www.pwc.com/gx/en/insurance/banana-skins/2013-survey-report.jhtml.
UK Retailers: Who's UP/Who's DOWN
UP: Sports Direct. The UK's 'Summer of Sport' has boosted Sports Direct results to a record breaking year. Preliminary results for the year to 28 April saw Group Revenue up 20.9% to £2,186 million and profit before tax up 40.0% to £207.2 million. There was growth across all divisions, with a notable surge in online revenue of 52.1%.. This is excellent news for around 2,000 of Sports Direct staff who are now set to receive bonus payments of £75,000 or more.
UP: Burberry, the luxury fashion retailer, has announced better than expected results in Q1 2013, with an 18% underlying increase of its retail revenue to £339 million. Like-for like sales were also strong, climbing from 8% in the previous quarter to 13%. By region, the company enjoyed double-digit comparable store sales growth in Asia Pacific and the Americas and high single-digit growth in its Europe, Middle East, India and Africa division. The retailer's chief executive, Angela Ahrendts, commented that Spring was a 'standout' 'season.
UP: Primark. Despite the negative publicity following the Rana Plaza disaster in Bangladesh, Primark, the budget clothes retailer, has reported a strong (22%) year-to-date sales increase, and a 20% quarterly rise in sales in the 16 weeks to 22 June compared to the same period in 2012. The results were instrumental in enabling Primark's owner, Associated British Foods, to announce an 8% rise in its overall quarterly sales.
DOWN: Nicole Farhi, the upmarket fashion retailer founded in 1982, has been bought out of its recent administration for an undisclosed sum by the former head of womenswear at Matalan, Maxine Hargreaves-Adams. The retailer has six stores and also sells its clothing in department stores Harvey Nichols, House of Fraser, John Lewis and Selfridges. The last few years have been challenging for the business; in the last three years alone the company was sold for £5 million and has had two private equity owners. The most recent set of company accounts show that it made an operating loss of £2.33 million for the year to January 2011.
DOWN: Dwell, the mid/upmarket furniture chain, went into administration on 25 June but has since seen its founder and former owner, Aamir Ahmad, step in to buy five stores and the group's headquarters out of administration. Mr Ahmad left the business last year following the sale of Dwell to Key Capital Partners. Dwell's latest accounts showed a pre-tax loss of £675,320 in the year to 27 January 2012.
DOWN: Modelzone, the UK’s largest specialist model chain employing 335 staff across 47 stores, entered into administration last month. While, the wholesale arm of the company has since been bought by Ripmax Limited, the joint administrators to Modelzone have confirmed they have received no offers for the retail business on a going concern basis and now plan to implement a program of store closures. Richard Hawes, joint administrator, commented that in recent years the company had entered into leases for new stores that proved to be loss making, and coupled with the growth in online competition, the business had become unsustainable.
DOWN: Internacionale Retail, the budget fashion retailer, filed notice of intention to appoint administrators after failing to meet the years second quarter day rent payments on 24 June. The company had been making significant losses for several years and, despite a large recent cash injection by shareholders, its most recent full-year accounts for the year ending 24 July revealed a loss of £15.4 million. However, just a few days later, a new business set up its former directors bought Internationale Retail following a pre-pack administration. This will conserve 1550 jobs in 132 (of 150) stores.
Bad Debt Protection Manager - Credit Insurance (Ref: JO 8637). Manchester, £38,000 - £45,000.
The Client is UK Bank with a growing invoice finance book. They are looking for somebody to proactively ensure that the Bank operates its Bad Debt Protection (BDP) service in strict accordance with all invoice finance agreements and trade credit insurance arrangements and monitor the appropriateness of BDP limit levels through constant monitoring of overdues, potential over trading of limits, payment plans, rejected collections and credit information. The successful candidate will also manage the limit application process to ensure the quickest possible turnaround times and prompt communication of BDP limits to regional teams and their clients, and ensure charging of BDP Service Fees is conducted promptly and accurately. A firm grasp of the principles of bad debt protection / non-recourse finance and trade credit insurance and an ability to appraise financial information for credit management purposes is required. To view the full job description go to http://www.opusmitchell.com/jobs/vacancy/bad-debt-protection-manager.html. To apply, please send your CV to email@example.com or call 0207 929 2795. (Please quote Credit Insurance News Digest).
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