1 / 13

Credit Insurance Cooperating with ECAs Denmark Copenhagen, June 16, 2009

Credit Insurance Cooperating with ECAs Denmark Copenhagen, June 16, 2009. Erik Skovgaard Nielsen, Executive Manager, Denmark. Contents. Atradius – facts and figures Economic cycle management EKF scheme. Atradius – facts and figures. Atradius Group

elita
Download Presentation

Credit Insurance Cooperating with ECAs Denmark Copenhagen, June 16, 2009

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Credit Insurance Cooperating with ECAs Denmark Copenhagen, June 16, 2009 Erik Skovgaard Nielsen,Executive Manager, Denmark

  2. Contents • Atradius – facts and figures • Economic cycle management • EKF scheme Slide 2 of 10

  3. Atradius – facts and figures Atradius Group • World wide market share 31% • Annual revenues of more than EUR 1,8 billion • “A-” from S&P and “A2” from Moody’s • Information on 52 million companies • 22000 credit decisions daily Atradius in Denmark • Largest credit insurer – market share 65% • Insured turnover appr. EUR 20 billion • Appr. 80% related to export • Credit insurance, B2B Collection and guarantee business Slide 3 of 10

  4. Contents • Atradius – facts and figures • Economic cycle management • EKF scheme Slide 4 of 10

  5. Economic cycle management Facts • Severe and fast change in economic cycle • Recession in most countries • Business defaults increasing sharply everywhere • Country issues increasing Result • Credit capacity is shrinking • Fewer companies qualify for cover • Price for credit is increasing significantly • Credit insurers are pulling limits • Politicians/governments worry on impact on exports and economy overall Slide 5 of 10

  6. Market Outlook – Deterioration of Creditworthiness ‘Marketable’ credit risks ‘Non-Marketable’ credit risks Economic crisis Very good Very poor Creditworthiness Slide 6 of 10

  7. ” The best of the rejected risks” Scope for EKF involvement ‘Non-Marketable’ credit risks ‘Marketable’ credit risks Economic crisis Good times Very good Very poor Creditworthiness EKF Reinsurance Slide 7 of 10

  8. Contents • Atradius – facts and figures • Economic cycle management • EKF scheme Slide 8 of 10

  9. Basic principles • Structured as a quota share reinsurance facility • Private insurers front in all aspects • Premium split between EKF and insurer • EKF pays a ceding commission to insurers • Market have the “first right of refusal” to a limit • Market facility - offered to all major market players • EKF sets the price • The private insurers have the “underwriting pen” • Increased risk retention for the customers • Only covers export Slide 9 of 10

  10. Terms & Conditions • Policyholder • Scheme is a supplement to the policyholders current credit insurance. • Private insurers decide whether they accept a customer for the facility • Separate policies are issued for the EKF scheme • EKF must approve policyholder • Buyer risk • Diverse country group, incl. most OECD/EU-countries • Only ”the best of the non-marketable risks” can be covered • Specific guidelines on buyer underwriting applies • The private insurers do the risk underwriting decisions without interference from EKF, unless…… Slide 10 of 10

  11. Why use quota share structure • Historically the preferred option by the Danish government • Relatively easy in terms of admin – well known concept by the private market • EKF will not have to be involved directly into the market • Treaty signed for a year – with possibility to renew • Easy to phase-out again when market capacity gets back to normal Slide 11 of 10

  12. Premium rate and retained risk • Policyholder must take additional risk retention (20%) • Buyer risks are concentrated on buyers above average credit risk. • The premium rate is fixed and has been decided by EKF based on a grouping of countries. The premium rates – turnover basis – are: • 1.00% in country group 1 • 1.50% in country group 2 • 2.00% in country group 3 • Political risk cover is compulsory in country groups 2 and 3. For country group 1, political risk cover is optional subject to an excess premium of 0.10%. Slide 12 of 10

  13. Erik Skovgaard Nielsen Executive Manager, Denmark T. +45 33 26 52 10 erik.skovgaard.nielsen@atradius.com www.atradius.com

More Related