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Welcome to issue 95 of Credit Insurance News Digest. The industry newsletter devoted to the global trade credit insurance industry.
This issue is sponsored by InfolinkGazette

  Index
  Plus: This week's special feature, 'Anatomy of a Business Failure
             by Greg Connell, Managing Director of InfolinkGazette.
Credit Insurance News
A powerful lesson in the importance of credit insurance. Following the failure of Palmer & Harvey McLane, which left a total of £384,218,439.65 owed to 689 unsecured creditors, InfolinkGazette has contributed an article to Credit Insurance News Digest which analyses what Palmer & Harvey creditors could have known about the financial stability of the group prior to its failure. The article also notes which facts only came to light after the business' demise. For example, PwC revealed a significant number of material misstatements in the 2016 accounts which would have increased the 2016 pre-tax loss from £16,400,000 to £28,500,000. Similarly, the company’s losses had increased to £63,800,000 in the 53 weeks to 8th April 2017. Commenting on the information available from the accounts, Greg Connell, Managing Director of InfolinkGazette, said: “leaving aside the fact that the directors and shareholder of Palmer & Harvey McLane have a lot to answer for, this business failure is a powerful lesson in the importance of credit insurance." He added, “if credit insurance isn’t available on one of your clients, there is normally a very good reason why not and you might want to review the information available on your customer before continuing to supply on open credit terms.” Click here to read the full article.
Credit insurance premiums for UK companies are likely to increase substantially. CRN has published an article in which Mike Stott, Export & Domestic Credit Insurance Expert at Rycroft Associates, notes that for more than two decades the credit insurance market has seen a substantial drop in premiums, with the market insuring £314 billion of turnover in 2016 compared to £101 billion in 1995. By contrast, in that period premiums increased by only 45%. However from 2015 to 2016 claims rose by 12.6%, with the average policyholder making at least one claim on their policy. As a result, Mr Stott warns that in addition to likely premium increases it is probable that market capacity on companies (particularly in retail and construction) is likely to be limited. "My advice for those who have credit insurance is to buy two-or three-year deals if they are available. For those who do not have a policy, the window for getting insurance at an economic price with the cover on the customers you require is closing fast." To read CRN's article go to https://www.channelweb.co.uk/crn-uk/opinion/3024379/watch-out-for-rising-credit-insurance-premiums.
XL Catlin identifies significant potential for credit insurance growth. Peter Schmidt, Chief Executive Asia Pacific, Latin America & Global Credit and Surety at XL Catlin, has published some thought leadership in its recent Global Credit Insurance Monitor 2017. Among its findings, the report noted that when margins are tight, the cost of credit insurance can be crucial when deciding whether or not to transfer the risk. However, the complexity of the policy – the contract wording, its interpretation and its practical applications – can also be a deterrent for smaller insurance buyers. Large global sellers, by contrast, who choose credit insurance primarily for financing purposes, retain a portion of the credit risk on their balance sheet and manage it through their tighter payment terms and conditions. In addition, the report found that credit insurance buyers believe the current suite of products does not fully meet their protection needs and/or that policies are too rigidly applied. Meanwhile, larger companies would prefer to have the ability to differentiate between different types of risks. To read Mr Schmidt's analysis (with a link to the report) go to http://xlcatlin.com/fast-fast-forward/articles/xl-catlin-market-research-identifies-significant-potential-for-credit-insurance-growth.
Carillion estimated to owe £1 billion-plus to its subcontractors and suppliers, with only a small minority set to benefit from their credit insurance cover. The Construction Enquirer has published an article which advises that just £31 million of the estimated £1 billion-plus owed by Carillion to its subcontractors and suppliers is covered by trade credit insurance. The poor level of cover on Carillion has been revealed by the Association of British Insurers, which said 10 of its members had made their first stab at assessing the scale of the fall-out from the £4.5 billion turnover giant. The article advises that firms had turned their back on insurance as being too costly. One specialist said: “We have given up on trade credit insurance, premiums are a percentage of turnover and you have to cover all the firms you work with, so it can look expensive when you are dealing with good main contractors.” To read The Construction Enquirer's article go to http://www.constructionenquirer.com/2018/01/26/just-31m-of-carillions-1bn-trade-debt-insured/.
Carillion – trade credit insurers expect to pay just over £30 million to help businesses recover. The Association of British Insurers (ABI) has estimated £31 million is expected to be paid by trade credit insurers to help firms in the supply chain recover from the collapse of Carillion. In comparison, latest figures show that trade credit insurers paid out £210 million in 2016 to businesses due to non-payment. Mark Shepherd, Assistant Director, Head of Property, Commercial and Specialist Lines, at the ABI, said: “The demise of Carillion is a powerful reminder of how trade credit insurance can be a lifeline for businesses in these uncertain trading times. This insurance is an essential business tool that helps firms trade and expand in the UK and overseas." To read the ABI's news release and to read the ABI's guide to trade credit insurance go to https://www.abi.org.uk/news/news-articles/2018/01/carillion--trade-credit-insurers-expect-to-pay-just-over--30-million-to-help-businesses-recover/.
Trade credit insurer cuts cover to House of Fraser suppliers. Drapers has published an article, 'House of Fraser suppliers rally as credit insurer pulls cover', which reports that House of Fraser suppliers are holding firm after it emerged that a credit insurer has decided to stop providing cover to some of them. The unnamed insurer, which reached the decision a month ago, covered roughly 20 of the retailer's 650 suppliers. While the department store’s suppliers were “not surprised” by the decision, several reaffirmed their commitment to the retailer. A source familiar with the situation said: "I’m philosophical about it – there’s nothing I can do about it. The insurance being pulled doesn’t affect us – the problem would be if they went under, and arguably its owner will do anything to prevent this from happening." To read Draper's article go to https://www.drapersonline.com/news/house-of-fraser-suppliers-rally-as-credit-insurer-pulls-cover/7028927.article.
Brace for impact: Carillion's demise forecast to trigger a domino effect. Insurance Business has published an article which notes that being the second largest construction firm in the UK didn’t save Carillion from crumbling and warns of the implications for the thousands of smaller contractors it dealt with. In particular, those who didn’t have trade credit insurance, who might now themselves be at risk of shutting down. “The scale of Carillion’s demise has left many suppliers feeling very bruised,” said Mike Clark of Credit Risk Solutions Ltd. “Carillion worked with 30,000 contractors – many of them relatively small businesses who were reliant on a steady flow of cash from major, government-backed projects.” Mr Clark, who is chair of BIBA’s Trade Risk Focus Group, also “a period of considerable uncertainty” will be the case for many in the coming months. To read Insurance Business' article go to https://www.insurancebusinessmag.com/uk/news/construction-engineering/brace-for-impact-carillions-demise-forecast-to-trigger-domino-effect-90603.aspx.
What's going on with trade credit insurance? Insurance Business has published an article which questions why trade credit insurance coverage is suddenly having its moment? Just days before the demise of Carillion, Christian Hoy, Managing Director of CMR Insurance Services, told Insurance Business that it’s down to a maelstrom of prominent business failures as well as uncertainty caused by Brexit. “The recent high-profile collapses of companies such as Monarch, Palmer & Harvey, and Multi-York have made trade credit insurance become more necessary than ever,” Mr Hoy said. “That, along with the well-publicised financial struggles of other large companies like Maplin, Toys “R” Us, and Poundland, have made it critical that companies seek to protect themselves from a torpedo hit of bad debt.” To read Insurance Business' article go to https://www.insurancebusinessmag.com/uk/news/breaking-news/whats-going-on-with-trade-credit-insurance-89160.aspx.
New Look considering up to 60 store closures. Drapers has reported that struggling retailer New Look is thought to be considering up to 60 shop closures as it battles tumbling revenue and a ”challenging” UK sales performance. If New Look does go ahead with the store closures, roughly one-tenth of its 596 UK stores could face the closure. Earlier this month, some credit insurers for New Look suppliers cut their cover amid concerns over its poor performance. Euler Hermes stopped offering cover on new shipments of goods to New Look, although it is still providing residual cover on existing orders. Another insurer, QBE, said it has reduced its level of cover for New Look “in places”. To read Draper's article go to https://www.drapersonline.com/news/new-look-considering-up-to-60-store-closures/7028545.article.
Post-Brexit export markets may be a bad debt risk for British firms. China ranks amongst the hardest of countries for businesses to recover bad debts from, according to research from Euler Hermes. The findings come from Euler Hermes’ annual Collection Complexity Scores and Ratings report, which measures the challenges of international debt collection procedures in 50 of the largest economies involved in global trade. Western European countries made up 14 of the top 16 countries in the rankings with the most straightforward collections processes. But many of the markets the UK government is targeting for post-Brexit trade deals have been identified as having ‘severe’ or ‘very high’ complexity in recovering debts. These include Saudi Arabia (1st), United Arab Emirates (2nd), Malaysia (3rd), China (4th), the USA (18th) and Australia (20th). To read Euler Hermes' news release go to http://www.eulerhermes.com/mediacenter/news/Pages/Western-Europe-the-good-pupil-in-debt-collection-.aspx.
Coface predicts a 10% increase in insolvencies in the UK. CPI Financial has reported that during its annual conference on country and sector risks, Coface advised that global trade made a spectacular leap (+4.4% in 2017) and was stronger than expected in the US, Europe and several emerging countries. In 2018, Coface predicts that global growth could peak (Coface forecasts +3.2%), with a stronger recovery in emerging countries (4.6% growth predicted). In advanced countries, Coface expects the current downward trend in insolvencies to continue but notes that it is beginning to run out of steam (the forecast decline is 1.8% in 2018, after a 6% drop in 2017) as many countries have already returned to their pre-crisis levels. However, the UK will see an increase in insolvencies (up 10% according to Coface) in a context of persistent political uncertainties. To read CPI Financial's article go to http://www.cpifinancial.net/news/post/44160/coface-forecasts-3-2-per-cent-global-growth.
Atradius warns that the knock-on effect of Carillion's demise will be huge. Atradius has published a Market Monitor on the UK's construction industry which notes that the knock-on effect following Carillion's failure in January 2018 is expected to be huge, as it is anticipated that between 25,000 and 30,000 suppliers and subcontractors are owed around £2 billion. Currently, average payment in the British construction industry is 75 days, and the level of protracted payments and payment delays remains high and is expected to increase further in H1 of 2018 fuelled by the Carillion liquidation. For many smaller construction businesses, problems further up the supply chain regarding delays in payments will only intensify the issues they already have. Due to all this and a general concern over the overall state of the UK economy. Atradius forecasts that the level of insolvencies in the construction sector will remain high and is expected to increase further in 2018, by about 4-5% year-on-year. To read Atradius' Market Monitor go to https://group.atradius.com/publications/market-monitor-construction-united-kingdom-2018.html
Additional Market Monitors are available for Belgium, France, Italy, Romnania, Spain, US, Australia, Hungary, Mexico, Poland, Singapore, Thailand.
A condensed view of country risk assessments published by Atradius, Coface, Credimundi and Euler Hermes. AU Group has released its latest AU 'G Grade' for Q1 2018 which notes that the improvement in the wider global economy in the last six months has been reflected in the 'G Grade', with more countries being upgraded than downgraded. There were particularly significant upgrades for Slovenia, Azerbaijan, South Korea, Taiwan, Ukraine, Egypt, Kazakhstan and Rwanda, with only the Philippines and Bahrain seeing significant decreases to their rating. The AU 'G-Grade' is based on the individual assessment of a country by each of the 4 main credit insurers and is based on real risk taken by these major insurers collectively representing billions of euros transactions. To download a copy of AU Group's free report go to http://www.au-group.com/how-to-monitor-country-risks/.
Euler Hermes warns that Asia will start feeling the heat again in 2018. An article in CFO Innovation has reported that Euler Hermes cautions that credit conditions in Asia-Pacific could begin to tighten this year despite an expected +4.8% GDP growth in 2018 and +4.7% in 2019 in the region. “2018 will be a good year for Asian businesses. Yet trade easiness, payment delay issue, and financing conditions will be the three big-ticket items the private sector should keep in mind for 2018 and 2019,” said Ludovic Subran, Chief Economist at Euler Hermes. Payment delays have increased throughout the region and particularly in China where clients pay at 89 days on average against 72 days five years ago, said Euler Hermes. As a result, bankruptcies are expected to increase by +14% this year in the region. To read CFO Innovation's article go to https://www.cfoinnovation.com/story/14112/euler-hermes-asia-will-start-feeling-heat-soon-2018.
Liberty to launch trade credit e-trade platform. Insurance Age has reported that Liberty Specialist Markets is set to launch Toredo, an e-trade platform designed to offer brokers access to trade credit insurance. According to Liberty the platform, which will focus on cover for banks, corporates and commodity traders, will allow underwriters, brokers and clients to buy and sell insurance capacity with greater speed, visibility and efficiency. Beyond operating the platform, Liberty will provide capacity to Toredo. Other capacity will come from a soon-to-be announced consortium. To read Insurance Age's article go to https://www.insuranceage.co.uk/insurer/3260476/liberty-to-launch-trade-credit-e-trade-platform.
MarketInvoice partners with Euler Hermes. MarketInvoice has announced that it has established a partnership with Euler Hermes to give MarketInvoice customers who use invoice finance solutions the assurance that they are protected in the event their customer becomes insolvent or fails to pay within the agreed terms. Additionally, a Risk Prevention tool that monitors a company’s financials will allow MarketInvoice customers a forward view on their debtors tol improve future trade decisions. Milo Bogaerts, CEO Euler Hermes UK and Ireland, said: “We live in uncertain times. Trade, investment and consumer spending are driven by confidence, and uncertainty is the enemy of confidence. Businesses leaders need to plan ahead for how future risks like Brexit might impact them and their supply chains." To read MarketInvoice's news release go to https://blog.marketinvoice.com/2018/02/12/marketinvoice-partners-euler-hermes/.
The most promising emerging markets in 2018. Atradius has advised that the economic recovery in emerging market economies is expected to continue strengthening in 2018 and these markets could present opportunities for business. The most promising markets include Colombia, Costa Rica, the Czech Republic, India, Indonesia, Morocco, Panama, Senegal, and Vietnam. Aradius advises that all of these have GDP growth fuelled primarily by private consumption and fixed investment as well as sufficient external buffers and a flexible exchange rate reduce the downside risk stemming from global volatility. They also tend to have stable political and institutional conditions and generally have young and growing populations, marked by an expanding middle class. To read Atradius' news release go to https://group.atradius.com/publications/promising-markets-2018.html.
Export Development Canada launches a new online Portfolio Credit Insurance solution. Export Development Canada (EDC) has introduced its new online Portfolio Credit Insurance to make it faster and easier for Canadian companies to apply for credit insurance coverage, pay premiums, report overdue payments, submit claims, and speak directly with a dedicated support team. EDC's research shows there are approximately 140,000 Canadian companies that are currently engaged in trade (directly or indirectly exporting or have international investment) or planning to export. About 76% of the companies in the addressable market (approximately 107,000) are considered to be "micro" in size (under CA$1 million in annual volume) and have huge untapped potential for growth. To read EDC's news release go to https://www.edc.ca/EN/About-Us/News-Room/News-Releases/Pages/CIT-launch.aspx.
Atradius predicts US economic growth of 2.5% - or even higher. Atradius' latest NAFTA Country Report for the US notes that after sharp year-on-year increases in 2008 and 2009, the number of corporate insolvencies has steadily decreased every year since. According to figures provided by the US Courts, the number of business bankruptcies filed in Federal Courts declined 2.5% year-on-year in 2016, to 24,114 cases, and preliminary numbers indicate a 4% decrease in 2017. In 2018 a more modest 2% decrease in failures is forecast. Atradius also advises that after expanding just 1.5% in 2016 economic growth increased 2.2% in 2017, mainly driven by buoyant private consumption, but also by a recovery in exports thanks to stronger external demand. Looking ahead, economic growth is forecast to accelerate to 2.5% or even higher in 2018. To read Atradius' Country Report go to https://group.atradius.com/publications/country-report-nafta-usa-2018.html.
NAFTA Country Reports are also available for: Canada, Costa Rica, Mexico, Panama.
Congratulations to . . .
CBF for winning, for the second year in a row, the category of Credit Insurance Specialist of the Year at last week's CICM Awards.
New Appointments
Neon has announced the expansion of its political & credit risk team with the appointment of Paul Barrett, who moves from Arthur J. Gallagher. Mr Barrett joins Senior credit analyst Anthony Vaughan and underwriter Paul Carrington.
Liberty Specialty Markets (LSM) has announced the appointment of Chris Hall as senior underwriter to spearhead a new trade finance insurance initiative. Mr Hall, who is currently head of trade asset management for Lloyds Banking Group, will be based in LSM's London headquarters.
Aspen Insurance has announced that it has promoted Carolyn Thomas to global head of credit and political risks. Ms Thomas was previously senior underwriter in the credit and political risks team, based in Bermuda. She replaces Paul Sanders - see below.
Everest Re Group has announced that Paul Sanders has joined Everest Insurance in London as head of their European credit and political risk insurance business. Mr Sanders was most recently global head of credit and political risks at Aspen Insurance.
Lillian Labbat has joined Zurich North America as head of trade credit and political risk. She succeeds David Anderson, who left Zurich in January to pursue other opportunities. In her new role, Ms Labbat will be responsible for the political risk and single-risk trade credit underwriting teams in the Americas, London, Continental Europe and the Asia Pacific region.
XL Catlin’s insurance operation in France has announced the appointment of Eric Zandvliet as Head of Political Risk, Credit & Bond – France & Benelux. Mr Zandvliet previously held the role of Senior Underwriter, Political Risk, Credit & Bond at XL Catlin. He will be based in Paris.
Euler Hermes has announced three new appointments.
  • Chantal Schumacher is appointed Group Chief Financial Officer and a member of the Group Board of Management, effective April 1st, replacing Clarisse Kopff who is leaving the company to take on a new role as Chief Financial Officer at Allianz France. 
  • Michael Eitelwein is appointed Group Chief Operating Officer and a member of the Group Board of Management, effective April 1st, replacing Ludovic Sénécaut who will be leaving the company to pursue new challenges. 
  • Michele Pignotti’s responsibilities as member of the Group Board of management in charge of Market Management will now also include Commercial & Distribution activities effective April 1st 2018 following Paul Overeem’s upcoming retirement on 31 March 2018.
Business Information & Reports
We are delighted to offer a small selection of the news items included in our new business information publication. Please go to Credit Management News Digest for more business information news.
Carillion crisis exposes the "toothless" Prompt Payment Code. The Federation of Small Business (FSB) has commented that Carillion’s collapse has called into question the effectiveness of the UK's Prompt Payment Code (PPC) and raised the need for urgent reform to tackle the UK’s late payment epidemic. Despite being a signatory of the PPC since 2013, Carillion was notorious for paying its invoices late. Last July, FSB exposed these poor practices when it came to light that some members were being made to wait 120 days for payment. Poor payment practices continue to be a big issue for small businesses with FSB research showing that, on average, 30% of payments are typically late while the average value of each late payment stands at £6,142. Furthermore, it costs the UK economy £2.5 billion each year and "kills" 50,000 small firms. As a result, the FSB is calling on the UK Government to mandate that all FTSE 350 companies sign up to a strengthened Prompt Payment Code with a new 'three strikes and you’re out' rule. To read the FSB's news release go to http://www.fsb.org.uk/media-centre/press-releases/carillion-crisis-exposes-toothless-prompt-payment-code.
Carillion subcontractors will take an average hit of £375,000. The Construction Index has published an article which reports that a poll by the Building Engineering Services Association (BESA) and Electrical Contractors Association (ECA) found that 80 of their respondents were collectively owed £30 million by Carillion - an average exposure of £375,000. The trade associations’ straw poll showed that the average amount owed to micro businesses (fewer than 10 employees) was £98,000, but one such firm is owed more than £250,000. Small firms (10-49 employees) in the sample are owed £141,000 on average, while medium-sized businesses (50-249 employees) are owed on average £236,000, with the most exposed firm owed almost £1.4 million. BESA and ECA say that large businesses (250+ employees) are owed on average £15.6 million, while Balfour Beatty has said that it expects to take a hit of between £35 million to £45 million. To read The Construction Index's article go to http://www.theconstructionindex.co.uk/news/view/poll-shows-carillion-subcontractors-take-average-hit-of-375k.
Project bank accounts could protect UK small business suppliers against a repeat of Carillion collapse. The Federation of Small Businesses (FSB) has urged the Government to adopt a practice which would see money for public projects held in trusts. This would protect businesses throughout the supply chain if a big firm running a public project  goes bust by ensuring that they are paid for work already completed. Furthermore, holding project money in trusts would help stem the poor payment practices used by some large companies as it would allow money to be released promptly, as and when work is completed. Major projects, such as the £14.8 billion Crossrail project, have already implemented similar arrangements, as have construction spending departments including Highways UK. To read the FSB's news release go to http://www.fsb.org.uk/media-centre/press-releases/project-bank-accounts-could-protect-small-business-suppliers-against-repeat-of-carillion-collapse.
The implications of the Carillion collapse for mid-market contractors. Insurance Business has published an article which notes that, according to specialist insurer ECIC, before its demise, Carillion was holding more than £800 million in debt payments owed to sub-contractors - putting mid-market contractors at risk. As a result, electrotechnical and engineering services trade body ECA and the Building Engineering Services Association (BESA) have put forward suggestions, among which is a plan allowing those SME contractors already working on Carillion projects to continue with work and be paid directly. They also want the UK government to actively support the retentions bill, and for major public sector suppliers to be precluded from winning further contracts unless they can prove prompt supply chain payments. To read Insurance Business' article go to https://www.insurancebusinessmag.com/uk/news/construction-engineering/implication-of-carillion-collapse-for-midmarket-contractors-89683.aspx.
Global economic growth in 2018 on track to be fastest since 2011. The global economy is set to grow by almost 4% in 2018 in purchasing power parity terms, adding an extra $5 trillion to global output at current values, according to new projections in PwC’s Global Economy Watch. The main engines of the global economy, the US, emerging Asia and the Eurozone, are expected to contribute almost 70% of economic growth in 2018 compared to their post-2000 average of around 60%. Growth in the Eurozone is predicted to be above 2% in 2018, as PwC expects the peripheral economies to outpace the core for the fifth consecutive year. Of the larger Eurozone economies, the Netherlands is expected to lead the way with economic growth at 2.5%. By contrast, uncertainty relating to Brexit is expected to drag on UK growth, which is predicted to be 1.4% in 2018. To read PwC's news release go to https://www.pwc.co.uk/press-room/press-releases/Global-economic-growth-in-2018-on-track-to-be-fastest-since-2011.html.
UK businesses experience a strong start to 2018. According to the latest Business Trends Report by BDO, British businesses have had a strong start to the year, despite mounting uncertainty about Brexit. BDO’s Output Index, which tracks current order books and is an indicator of GDP growth over the next three months, increased to 99.63 from 98.45 and is now just below the 100 level. This suggests that the UK can expect GDP growth of around its long term trend of 2% in the early part of 2018. This is the first time that the Index has increased since July 2017. BDO’s Manufacturing Output sub-index has also increased to 100.67 from 100.33, climbing further above the long-term trend. UK manufacturing continues to benefit from increasing overseas demand, partly due to the cheaper pound. To download BDO’s New Economy report and find out more visit www.neweconomy.bdo.co.uk. To read BDO's news release go to https://www.bdo.co.uk/en-gb/news/2018/uk-businesses-experience-strong-start-to-2018.
BDO data reveals “glacial” growth on the UK high street. New figures released by BDO have shown that total like-for-like sales grew at a glacial pace of 0.6% in January, as UK stores avoided a repeat of last year’s negative growth (sales fell -0.1% year-on-year in January 2017). All three sectors covered by BDO’s High Street Sales Tracker (HSST) recorded positive growth for the first time since September, but none managed a single percentage point. Sales of lifestyle goods and homewares both recorded year-on-year increases of 0.8%, with fashion stores recording a like-for-like increase of 0.5%. In fact, excluding last January, the growth during the traditional post-Christmas discounting season was the lowest seen in five years. The poor figures for the new year sales follow a disastrous festive quarter of trading where overall like-for-like high street sales dropped -2.3% in December alone – the fifth successive December to record negative sales growth. To read BDO's news release go to https://www.bdo.co.uk/en-gb/news/2018/bdo-data-reveals-glacial-growth-on-the-high-street.
The destructive force of late payments. A new report from Dun & Bradstreet (D&B) has shown that at any one time, UK SMEs are owed an average of £64,000 in late payments, with 11% owed between £100,000 and £250,000. When you split it by sector, manufacturing firms suffer most, with an average of £83,000 owed in late payments, while retail follows closely with an average of £76,000. And the problem is growing – 51% of SMEs say late payments are more of a problem than they were three years ago, with 58% going as far as to say this issue is putting their business at risk of failure. In terms of the worst offenders, it’s an even split between large and small firms (27% and 26% respectively) and government organisations (27%). When you break it down by industry, however, things are less even. 30% of health SMEs and 33% of education SMEs are badly impacted by late payments from the public sector, while the manufacturing sector is disproportionately impacted by late payments from large firms (at 35%). To download a copy of D&B's report go to https://www.dnb.co.uk/perspectives/entrepreneurial-strategies/small-business-big-opportunity.html.
Approx. £22 billion in annual UK SME turnover is paid late. Members of the National Federation of Builders (NFB) consistently report that although The Construction Act requires public bodies to pay undisputed invoices within 30 days, many companies do not use it for fear of jeopardising future work from public sector clients (including central government). According to the NFB, some main contractors impose 120-day payment terms, with £10.5 billion withheld in retention payments and around £22 billion in annual SME turnover is paid late. Richard Beresford, Chief Executive of the NFB, commented that while late payment and retention of funds remain a problem for UK construction companies, there are some examples of some large companies providing a positive example. "One of our members, Colmore Tang Construction, is offering to pay subcontractors affected by the demise of Carillion earlier than their contract terms in order to provide some stability. This is the kind of collaborative leadership the industry needs and represents the best construction has to offer.” To read the NFB's news release go to http://www.builders.org.uk/news/withholding-subcontractor-payments-is-unethical/.
Nearly half a million businesses across the UK ended 2017 in a state of ‘significant’ financial distress. According to Begbies Traynor’s latest Red Flag Alert research for Q4 2017, 493,296 businesses were experiencing ‘significant’ financial distress at the end of 2017, up 36% compared to the same period in 2016 and 10% higher than Q3 2017. Begbies Traynor warns that a number of macro-economic pressures last year contributed to this considerable increase in distress, with the combination of rising inflation, stagnant real wage growth, a weak Pound, political uncertainty, the rise in interest rates, and the ever-tightening credit environment putting increasing financial stress on businesses. As a result, 258,349 UK businesses ended the year in a position of negative net worth, while a further 154,251 demonstrated an increase in their working capital deficit. To read Begbies Traynor's news release go to https://www.begbies-traynorgroup.com/news/business-health-statistics/half-a-million-uk-businesses-start-2018-in-significant-financial-distress.
UK insolvencies hit a four-year high. The Insolvency Service has reported that its latest statistics indicate that an estimated total of 17,243 companies entered insolvency in 2017, a rise of 4.2% on the year before. This was driven by a 6.3% increase in creditors’ voluntary liquidations (CVLs) of 8.2% and was further inflated by two 'bulk insolvency' events (large numbers of connected companies entering insolvency), which accounted for an estimated 2,131 of the total. Excluding bulk insolvencies, 15,112 companies entered insolvency in 2017, a rise of 2.5% on 2016. Similarly, in Q4 2017, total company insolvencies increased by 7.3% compared to Q3 2017 caused by a bulk insolvency event of an estimated 1,000 connected companies entering CVL. Excluding this bulk insolvency event, the underlying number of companies entering insolvency in Q4 2017 fell by 17.2% compared to Q3 2017 and by 10.9% compared with the same quarter in 2016. To read the Insolvency Services' new release go to https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/675931/Insolvency_Statistics_-_web.pdf.
Contains public sector information licensed under the Open Government Licence v3.0.
New ‘Duty to Report’ data shows large firms still paying a quarter of all invoices late. New figures produced exclusively for the Chartered Institute of Credit Management (CICM) by Graydon have indicated that more than a quarter of all invoices are being paid late, leaving small businesses struggling for cash. The average reported time to pay was 38.97 days with just over half (51.71%) paid within 30 days. A third (33.02%) were paid between 31 and 60 days, and 15.25% were paid later than 60 days. The most troubling statistic, however, is that more than a quarter (27.26%) were paid beyond the agreed terms. Data stems from the new Payment Practices Reporting Regulations that oblige larger firms with a ‘Duty to Report’ their payment performance. The first tranche, which includes such names as Stagecoach Services, Center Parcs, and The Carphone Warehouse, had to report by 30 November 2017. To read CICM's news release go to https://www.cicm.com/new-duty-report-data-shows-large-firms-still-paying-quarter-invoices-late/.
Eurozone growth reached it best growth rate for 10 years in 2017. A new estimate from Eurostat has indicated that GDP grew by 0.6% in both the euro area and the EU28 during the fourth quarter of 2017, compared with the previous quarter. In the third quarter of 2017, GDP had grown by 0.7% in both zones. Compared with the same quarter of the previous year, seasonally adjusted GDP in Q4 rose by 2.7% in the euro area and by 2.6% in the EU28 (after +2.8% in both zones in the previous quarter). Over the whole year 2017, GDP grew by 2.5% in both zones. This is the most rapid rate of growth since a 3.4% expansion in 2007 - the year before the global financial crisis. To read Eurostat's news release go to http://ec.europa.eu/eurostat/documents/2995521/8627394/2-30012018-AP-EN.pdf/0374d17b-ba86-4aab-8837-c4865e087ceb.
Please note that the text above is a summary of Eurostat's news.
Career Opportunities
Credit Risk Analyst 
Leadenhall, London 
Role Purpose: Part of the Political Risk & Credit team, our Credit Risk Analyst is responsible for reviewing the credit worthiness of companies globally but with a concentration on the EMEA region. Our Credit Risk Analysts work in partnership with our underwriters to recommend and approve credit limits for our clients. The role encompasses financial, sector and country risk analysis all in relation to short-term trade exposures.
Responsibilities: 
  • Credit Analysis – recommendation of credit limits for large and medium-sized corporates incorporating financial statement analysis and a discussion of other relevant factors in support of each recommendation.
  • Credit Monitoring – keen interest and ability to follow relevant news flow which may impact the credit risk portfolio. Experience with automating news alerts (e.g. factiva) and/or handling large datasets (e.g. from Bloomberg, D&B) on behalf of a team would be a plus. 
  • Compliance – a thorough and diligent approach to recording and maintaining accurate information in Chubb’s systems, including keeping records of all credit decisions and correspondence.
  • Risk Presentations – presenting risks internally to Chubb’s underwriters and/or credit committee as appropriate, either in written or oral form. Delivering credit training presentations to more junior analysts within the team, if applicable. 
  • Client Presentations – accompanying underwriters to client meetings and/or attending client presentations to the insurance market, with ability to participate and discuss specific risks and/or sectors with confidence.
Person Specification: The ability to focus on service to customers is a key requirement and the successful candidate will be able to clearly demonstrate a positive attitude and proactive approach. Strong communication skills are pivotal to the role, including the ability to present complex risk issues confidently.
The successful candidate will be able to assimilate information and process workflow quickly and arrive at decisions promptly without detriment to quality. 
  • 5+ years Credit Insurance industry experience
  • Excellent financial analysis skillset
  • Knowledge of different trade sectors and the characteristics of companies in the sectors
  • An interest in current affairs
  • An understanding of global economics
  • An understanding of political risk
  • Ability to work efficiently under pressure and to deadlines
  • Ability to work independently as well as part of a team 
  • Degree educated or equivalent professional. 
Please email your CV and a covering letter to emea.resourcing@chubb.com.
Nexus CIFS Risk Underwriter - Reporting to Risk Director
Job Summary: Expert analysis of credit risk in relation to enquiries from policy holders & generally managing the risk portfolio to achieve an acceptable loss ratio. Ideally to have previous risk underwriting experience in credit insurance or bank in environment.
Principal Accountabilities
The role is predominately London based although some UK travel will be required to visit clients/brokers/risks etc., on an ad hoc basis.
Main Tasks 
  • Manage a portfolio of clients, understanding both the nature of their trade and that of their customers to enable accurate limit underwriting of the risk;
  • Contact risks for more up to date information & to visit buyers where requested & produce a subsequent report;
  • Assess credit limit requests, including new business applications and action those within individual authority level & refer on recommendations for those above the authority level at all times in accordance with the CIFS Underwriting Authority Template;
  • Monitor the limits in appeal on the CIFS system & respond within a maximum of 5 working days;
  • Review monitoring alerts on a daily basis; 
  • Update notes section on the CIFS system with relevant information; 
  • Liaise with policyholders/ brokers regarding credit limit decisions, reasons for Nil limits, cancellations etc.; 
  • To monitor overdue on the CIFS system and take appropriate action and to respond to requests for payment re-scheduling with consultation with Directors where appropriate;
  • Progress limits reviews and communicate limit changes via the broker or client; 
  • Create reports on Buyers, Buyer Groups, Countries and Trade Sectors for presentation to CIFS personnel as required; 
  • Maintain a broad knowledge of the UK economy & more generally the European & global economy. Monitor the FT on a regular basis; 
  • To attend and contribute to the monthly Credit Committee meetings and act on decisions made and agreed upon in that meeting.
Communications and Relationships
Internal: To communicate internally through various meeting including Credit Committee, assisting the Commercial team at renewal stage of policies and the new business team in winning new cases. 
External: Daily communication with clients, brokers, and risks to discuss various maters as and when they arise.
Required Qualifications, Skills, Knowledge, Experience
  • Minimum 3 years risk underwriting experience
  • Educated to degree level would be preferable but not essential 
  • I.T. literate with knowledge of word, excel, Microsoft outlook.
  • Previous experience of the credit insurance industry would be beneficial 
Please email your CV and a covering letter to humanresource@nexusunderwriting.com.
Events & Offers
GTR MENA, Trade & Export Finance Week 2018, 19-20 February. Dubai.
The most established and comprehensive market gathering for the Mena region’s trade experts, fintech innovators, bankers, government bodies and corporates of all sizes returns to Dubai on February 19-22. Now in its 15th year, the 2018 instalment of this annual series will take stock of recent global developments, while focusing on key issues in regional hotspots and sectors. 
With unrivalled links to a huge number of movers and shakers in the industry, this event provides access to hundreds of companies engaged in international trade, acting as an ideal forum at which to learn about the latest trade, export and infrastructure financing tools and opportunities.
Click here for more information. 
Readers of Credit Insurance News receive a discount of 15% (discount code CIN15).
India Trade & Treasury Conference 2018, 28 February 2018. Mumbai.
Featuring as the only event of its kind in the country, this multi-format conference allows both domestic and international delegates to meet face-to-face to discuss their priorities, build their contact base, and learn from the leaders and innovators in trade all in one day. 
With over 250 delegates due in attendance in 2018, topics for discussion will centre on policy developments, trade and infrastructure finance opportunities, credit and political risk strategies and best practice regarding supply chain finance structures. Furthermore, an exclusive track on Fintech will give an outlook of the disruptive technologies reshaping the trade finance industries and the opportunities they have created for India’s trade and finance sectors.
For corporates and trade financiers looking to make their next moves in India, the India Trade & Treasury Conference 2018 offers the ideal forum at which to expand their network, meet their competition, and get direct advice and fresh perspectives from a wide range of trade experts.
Click here for more information.
Readers of Credit Insurance News receive a discount of 15% (discount code CIN15).
GTR Africa Trade & Export Finance week 2018, 1 - 2 March 2018. Cape Town.
Advance your knowledge, create new business opportunities and gain a competitive edge at the market’s premier pan-African trade and export finance gathering. For well over a decade, GTR Africa Trade & Export Finance Week has been a crucial networking and discussion forum for Africa’s corporates, financiers, trade specialists, ECAs and service providers.
This two-day conference, taking place at the Cape Town International Convention Centre on March 1-2, will provide extensive opportunities to create new business, as well as a truly customisable delegate experience.
 This event will cover all aspects of trade, export, commodity and infrastructure finance, exploring innovative funding solutions available to African corporates, identifying key African trade hotspots and project opportunities, providing insight into credit and political risks and much more.
Click here for more information.
Readers of Credit Insurance News receive a discount of 15% (discount code CIN15).
TXF Moscow: Export Finance, 13 March 2018. St Regis Nikolskaya Hotel, Moscow.
TXF is delighted to invite you to join us for this exclusive, capped attendance event.
With focused and informative content, honest discussion of financing trends & opportunities, plus excellent networking opportunities, it is an event not to be missed if you are active in the region. We will be helping Russian borrowers understand the kinds of financing available to them, giving borrowers the chance to explain their needs, as well as providing timely updates on regulation and policy. The perfect meeting point for all stakeholders doing business in Russia.
To take advantage of your exclusive 10% off offer contact Lucy at lucy.morris@txfmedia.com or click here for further information.
Turkey Trade & Export Finance Conference 2018, 21 March 2018. Istanbul.
According to the Turkish Exporters Assembly (TİM), Turkey’s exports rose to a 6-year high at $11.5 billion in July 2017 making it a key exporter of automobile, agriculture and mining commodities in the region and one of the fastest growing economies among OECD members in the next few years. 
For over a decade, GTR’s Turkey Trade & Export Finance Conference has provided Turkish corporates, financiers and investors with a key annual platform at which to make valuable business contacts and learn from the leading figures in international trade and investment. With a recent referendum increasing the executive power of Turkey’s President, political risk is likely to feature high on the agenda, as well as other geopolitical developments and emerging trade dynamics in global markets.
Discussions on current import-export scenarios, structured trade & export finance, infrastructure hotspots and treasury will also take place over the course of the day. If you have trade dealings with Turkey, this is an essential event for expanding your contact base, knowledge and trading position. 
Click here for more information.
Readers of Credit Insurance News receive a discount of 15% (discount code CIN15).
ICTF Global Credit Professionals Symposium, 22-24 April 2018. Chicago.
ICTF's Symposiums are known as the 'best in the industry' - the most superb educational and networking events for international credit management professionals - a forum for sharing of experience and exchange of best practices, providing unique practical insight and actionable ideas, real-time business intelligence, quality interaction and expert perspectives. Whether you are an experienced credit pro or new to the industry, attending the ICTF symposiums is a tremendous opportunity to learn from and network with over 150+ leading practitioners in the field. For more information go to http://www.ictfworld.org/events/EventDetails.aspx?id=1007962&group=. 
ICTF International Credit Professionals Symposium, 13-15 May 2018. Budapest.
ICTF's Symposiums are known as the 'best in the industry' - the most superb educational and networking events for international credit management professionals - a forum for sharing of experience and exchange of best practices, providing unique practical insight and actionable ideas, real-time business intelligence, quality interaction and expert perspectives. Whether you are an experienced credit pro or new to the industry, attending the ICTF symposiums is a tremendous opportunity to learn from and network with over 150+ leading practitioners in the field. For more information go to http://www.ictfworld.org/events/EventDetails.aspx?id=1030324&group=.
TXF Amsterdam: Natural Resources & Commodity Finance, 17 & 18 May, Amsterdam.
TXF is back in Amsterdam on 17 - 18 May for another two days of networking and analysis of the global commodity finance market. With senior speakers, interactive sessions and a guest list full of active deal-makers, TXF Amsterdam: Natural Resources & Commodity Finance has quickly established itself as the premier event in the commodity finance calendar.
Why attend?
  • A content-driven agenda featuring in-depth analysis of the market trends
  • A chance to get your groove on with potential business partners and make new connections
  • The perfect split between producers, traders, financiers, insurers, law firms and other key industry players
  • An expected 50% corporate attendance rate
  • Keynotes from industry heavyweights on new opportunities
  • Multiple session types with interactive innovative formats
  • he chance to earn 16 CPD points towards your professional development.
To find out more about the event, please visit the event website
TXF Global 2018: Export, Agency & Project Finance, 5-7 June, Prague. 
TXF Global 2018 has become the flagship event for the export, agency & project finance industry. Expect 1000 delegates, heaps of networking opportunities, stimulating content and industry-leading speakers!
If you work in export or project finance and are an exporter, borrower, bank, ECA, DFI/MFI, project sponsor, developer, law firm, insurer or government representative – this is the event of the year for you!
Why attend?
  • Meet with many potential business partners all under one roof, with multiple networking opportunities throughout the day
  • Closed door meetings for Borrowers, Private Insurance, Exporters and ECAs
  • SOEs and borrowers from fast-growing regions and sectors
  • An ideal demographic with an even split between corporates and financiers and large multinationals to smaller SMEs (50% corporate attendance expected)
  • Keynotes from export and project finance heavyweights: CEOs of ECAs, DFIs and large corporates
  • Multiple session types and dynamic networking formats to review product effectivity, innovation, and new markets
  • ECA direct lending, alternative lending and the changing role of commercial banking future mapped
  • A Highly-acclaimed industry event: ”Fantastic gathering of the industry leaders. A great place to find partners and future deals!” – International Business Development Director, BAM Nuttall. 
Find out more on the event website
About the Sponsor: InfolinkGazette
InfolinkGazette (ILG) was established in 2012 to collect and digitise all of the information available on UK Insolvencies, with the aim of helping Credit Insurers, Brokers, and other Risk Management businesses find the optimum time to call commercial prospects and present their company's solution; the time when the prospect has the greatest propensity to purchase a Credit Insurance or Risk Management solution, which is shortly after the prospect has incurred an unsecured credit loss, following one of their customers going out of business.
In an average quarter period, ILG data quality editors process over 2,500 insolvency files, with total unpaid/unsecured credit losses of approximately £1 billion, resulting from an average 45,000 ordinary unpaid trade creditors, who have each lost an average of more than £20,000.
The information is available via our website 24/7, with extensive search, viewing & download facilities; the database of over 0.9 million records, is increasing at the rate of almost 15,000 unsecured creditors per month, which means we are constantly refreshing the supply of quality new business prospects for credit insurance professionals.
InfolinkGazette (ILG), is a division of Connell Data Ltd (CDL), a commercial data collection bureau, supplying business information and information management systems to their client. CDL started out, collecting, and digitising UK and Irish Insolvency appointments. More recently, CDL broadened the scope of its data collection strategy to cover a wider range of commercially available information; we take data from print media, or other analogue sources, and supply it in a structured digitised format, but remain focused on credit risk, opportunity, and compliance.

ILG also provide bespoke product development, and application hosting services for their data customers, including: Case Management Systems; Credit Scoring & Decisioning Systems; API’s and online web portals.
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