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Credit Insurance

Improved global economic conditions lead to increased demand for trade credit insurance and surety

By CreditMan Thursday, June 18, 2015

Trade credit insurance

  • Insured exposure increased by + 11,9% to € 2.21 trillion ($ 2.47 trillion)

  • Premium increased by + 2,95% to € 6.07 billion ($ 6.79 billion)

  • Claims decreased by -/- 1% to € 2.85 billion ($ 3.19 billion)

  • Claims ratio 2014: 46.9% (2013: 48.8%)

Surety

  • Insured exposure increased by + 26.1% to € 331 billion ($ 370 billion)

  • Premium increased by + 16.3% to € 2.71 billion ($ 3.03 billion)

  • Claims decreased by -/- 13.6% to 1.02 billion ($ 1.14 billion)

  • Claims ratio 2014: 37.8% (2013: 50.8%)

The members of the International Credit Insurance & Surety Association (ICISA) met in Toronto for their 73rd Annual General Meeting to share and discuss market and industry developments. The trade environment continuous to improve, but certain regions are not delivering as expected. Furthermore members identified risks threatening the recovery, such as the ongoing political unrest in parts of the world and the effects of sanctions on trade.

President Andreas Tesch:”The overall positive outlook for global trade is countered by disappointed economic outlook for countries such as Brazil and slower growth in China.”

During the Annual General Meeting the membership re-elected Andreas Tesch (Atradius) as President for 2015/2016 and Jos Kroon (Nationale Borg) as Vice President for the same period.

Trade credit insurance

“The drop in average premium rate demonstrates the fierce competitive environment ICISA trade credit insurance members operate in”, Tesch notes. Comparing the current situation with the pre-crisis (2007) period, Tesch indicates that “members’ results continue to improve and exceed pre-crisis levels, with a 34.6% higher premium income and 29.1% higher insured exposure.” Tesch states: “An increasing number of companies, including a growing number of SMEs, recognize the benefits of the product as more than an insurance product. It facilitates access to bank finance and provides them with business relevant market knowledge assisting them to avoid large losses.”

Looking ahead to 1 January 2016 when the Solvency II regime will be effective, Tesch indicates: “The anticipated implementation of Solvency II is seen as the start of renewed negotiations for the industry.”

Surety

“The decreased claims figure reflects the overall improved market situation also for construction companies and the transportation sector”, Jos Kroon, Vice President of ICISA, explains. “Comparing the 2014 surety results with those from before the crisis (2007), premium income has more than doubled, while the insured exposure grew by almost 85%”, Kroon adds.

www.icisa.org