Welcome to the July 2020 issue of Credit Insurance News Digest. This issue is sponsored by Markel.

Index
 
PLUS: This month's featured article: 'Direct Advantages for International Companies', by Farosol.
Please note: Amid such a fast-moving global pandemic, news stories of just a few days old quickly become outdated. Consequently, we have provided the publication date of the news releases or articles featured in this month's issue, with items closest to our publication date (10 June) displayed first.
Credit Insurance News
2 July: European Commission objections delay UK trade credit rescue package. The Grocer has reported that the Association of British Insurers (ABI) has confirmed to The Grocer that the European Commission, in charge of giving final approval under EU state aid rules to the UK government's £10 billion trade credit underwriting plan, has unspecified issues with the scheme as it stands. An ABI spokeswoman said: "We are very disappointed with the EU Commission's objections to certain elements of the UK scheme, which has caused delays. We are working with insurers and the government to work through this to ensure businesses can get the cover they need." However, The Grocer notes that the delay has already led to trade credit insurers reducing or cancelling coverage for a number of food and drink wholesalers. To read The Grocer's article go to https://www.thegrocer.co.uk/finance/city-snapshot-european-commission-objections-delay-uk-trade-credit-rescue-package/645997.article?adredir=1.    
2 July: Video. Marsh webcast discusses the UK's trade credit insurance scheme. Marsh has published a webcast which provides an in-depth review of the UK government's trade credit insurance scheme and explains what it means for UK businesses. The webcast also examines the benefits of trade credit insurance and describes how policies can help reduce the risk of cash flow volatility. A Q&A at the end of the video responds to questions on limit reviews and reinstatements, current actions being taken by various insurers, trade sectors most likely to benefit by the scheme. The speakers include Matthews Strong, CEO, of Credit Specialties - UK & Ireland, Marsh JLT Specialty; Ian Watts, Practice Leader Marsh UK; Steve Howells Head of Major Accounts Trade Credit at Marsh. To watch the webcast go to https://www.youtube.com/watch?v=f6RY5xOCzT0.
1 July: Coface finalises the acquisition of GIEK Kredittforsikring AS. Coface has announced the closing of the acquisition of GIEK Kredittforsikring AS, a company owned by the Norwegian Ministry of Trade, Industry and Fisheries, that manages a short-term export credit insurance portfolio. Coface has acquired all GIEK Kredittforsikring AS shares, and the business will operate under the brand name Coface GK. In 2019, GIEK Kredittforsikring AS recorded a total of around €9 million of gross written premiums with a portfolio that is widely focussed on export policies. To read Coface's news release go to https://www.coface.com/News-Publications/News/Coface-finalises-the-acquisition-of-GIEK-Kredittforsikring-AS.  
30 June: Australian trade credit insurers re-evaluate insurance coverage amidst liquidity concerns. Asia Insurance Review has reported that following the news that QBE told its suppliers that it would cancel all trade credit insurance cover for Myer and David Jones by 16 July, the four other major insurers in Australia - Atradius, The Bond and Credit Co, Coface, Euler Hermes - are at different stages of reducing and reviewing cover for the two specific department stores and the retail sector more broadly.  Ther article notes: "This means that insurers could still cancel policies in upcoming weeks." To read Asia Insurance Review's article go to https://www.asiainsurancereview.com/News/View-NewsLetter-Article/id/62410/Type/eDaily/Australia-Insurers-re-evaluate-trade-insurance-coverage-amidst-liquidity-concerns.
30 June: Video: CBI webcast stresses that trade credit insurance is critical. The CBI has published a webinar in which it emphasises that trade credit insurance (TCI) is critical to enabling the "better flowing of finance" as firms take their staff off furlough and look to resume operations. The webinar notes that while it is hearing reports that TCI renewals are "very onerous" right now with prices going up and, in many cases, reduced cover, it welcomes the development of the UK government's trade credit insurance scheme. Looking to the future, the CBI advises that it has joined a three-month taskforce to see whether it could be possible to develop a special insurance product to provide cashflow protection for SMEs in a future lockdown or pandemic scenario. To watch the webinar go to https://www.cbi.org.uk/articles/webinar-supporting-smes-impacted-by-coronavirus-29-06-20/.
29 June: Atradius warns businesses to be vigilant after seeing a rise in impersonation fraud during the Coronavirus pandemic. Atradius has cautioned businesses against impersonation fraud, which occurs when a fraudulent party presents themselves as if representing a credit-worthy business and approaches other businesses under the guise of looking for new suppliers. However, once the impersonator obtains the goods, they quickly disappear, leaving invoices unpaid and the supplier out of pocket. According to Atradius, although impersonation fraud is particularly common for sectors trading perishable goods, which are difficult to trace, (such as fish and fruit and vegetables), all sectors are seeing increases in this type of fraud. To read Atradius' news release go to
25 June: The Eurozone is heading for a historic recession in 2020. Atradius latest global economic outlook forecasts a 5.1% GDP contraction and a 15% decrease in global trade in 2020. All advanced markets are affected to a greater or lesser degree by the Covid-19 pandemic, with advanced economies facing a 6.5% GDP contraction in 2020, and the Eurozone heading for a historic recession in 2020. All major emerging economies – except for China – will also face a recession in 2020. Although Atradius predicts a robust 6.5% recovery in 2021, it stresses that economic recovery depends on the development and administration of a vaccine, or a state of the world in which the effect of social distancing on economic activities is mostly overcome. To read Atradius' news release go to https://group.atradius.com/publications/economic-research/global-economic-outlook-june-2020.html.
24 June: US fashion groups turn to Trump administration for a trade credit insurance backstop. Insurance Business has reported that a group of 22 US fashion trade organisations have called on the federal government to create "an emergency, temporary federal commercial trade credit insurance backstop", to help both retailers and vendors during the pandemic. The letter noted that current available credit insurance capacity "now represents only a fraction of what was available just a few months ago," with the situation continuing to deteriorate. "This means that US jobs, including many US manufacturing jobs, supported by our supply chains are at risk." To read Insurance Business' article go to https://www.insurancebusinessmag.com/us/news/breaking-news/fashion-groups-turn-to-trump-administration-for-cover-226071.aspx.    
24 June: Chinese business insolvencies look set to increase by almost 30% in 2020. Atradius' latest country report on China notes that Chinese GDP contracted by 6.8% year-on-year in Q1 of 2020, and the cash flow of many businesses has come under pressure as sales sharply deteriorated. Furthermore, since large manufacturers across the country stopped operations in early 2020, this has caused significant disruptions to supply chains in China and elsewhere. Atradius now anticipates that Chinese business insolvencies will increase sharply in 2020 - by almost 30% - with small and medium-sized private businesses mainly affected. To read Atradius Country report go to https://group.atradius.com/publications/country-report-asia-china-2020
New country reports are also available for South Korea, India, and Indonesia,
23 June: Spain and Italy look set to among the hardest hit by the pandemic. According to Coface forecasts, although the current financial situation of companies in Spain and Italy is healthier than on the eve of the 2009 global financial crisis, both countries will be among the economies hardest hit by COVID-19, contracting by 12.8% and 13.6% respectively in 2020. Coface also predicts that corporate insolvencies will increase by 22% in Spain and 37% in Italy by 2021, relative to 2019 levels. The retail and construction sectors are particularly vulnerable.  For 2021, Coface forecasts that Spain and Italy’s GDP will rebound by 10.2% and 8.9%, leaving the economies 3.9% and 5.9% below 2019 levels. To read Coface's news release go to https://www.coface.com/News-Publications/News/Are-corporate-balance-sheets-in-Spain-and-Italy-ready-for-the-COVID-19-shock.
20 June: QBE reduces trade credit insurance cover for suppliers of Australian major high street names. Insurance Business has reported that Australian department stores David Jones and Myer have been classified as 'higher risk 'by QBE following the insurer's review of the retail industry. A recent article in The Sydney Morning Herald noted that QBE had advised the two retailers of a decision to reduce trade cover from mid-July on account of the department store sectors' risk profile amid the Coronavirus crisis.  A Myer representative was cited as describing the coverage withdrawal as "disappointing". To read Insurance Business' article go to https://www.insurancebusinessmag.com/au/news/breaking-news/insurer-refuses-cover-for-suppliers-of-major-high-street-names-225734.aspx.
19 June: Euler Hermes casts doubts over the UK government's credit insurance support scheme. CRN reported that Euler Hermes has revealed that the UK government's credit insurance support package has hit a bump in the road. In a note sent to brokers and seen by CRN, Euler Hermes' UK CEO Milos Bogaerts said: "The negotiations between HMG (the government) and the European Commission are taking longer than planned and there are discussions that could impact the way the scheme is implemented operationally." He added: "Unfortunately, we need to pause the implementation of the scheme and we cannot reinstate cover just yet." To read CRN's article go to https://www.channelweb.co.uk/news/4016758/euler-hermes-casts-doubts-gov-credit-insurance-support-scheme.
19 June: The Canadian government needs to recognise the importance of trade credit insurance post-COVID-19. Trade Finance Global has reported that the Canadian government needs to recognise the importance of trade credit insurance (TCI) offered by private insurers as an effective instrument for complementing economic relief measures aimed at preserving buyers’ ability to pay once trading resumes.  After determining the extent to which TCI is vital to trade and the economy, the article suggests that the government should incentivise private insurers to design affordable tailor-made products for SMEs. Another option is to establish reinsurance schemes through a public-private partnership to enable the optimal sharing of risk between the government and private insurers. To read Trade Finance Global's article go to  https://www.tradefinanceglobal.com/posts/why-should-canadian-smes-leverage-trade-credit-insurance-post-covid-19/.
17 June: Concerns that UK trade credit insurers are not adjusting their criteria to take into account the pandemic. A new report from the Food and Drink Federation (FDF) has warned that businesses in the sector are continuing to find that trade credit insurers are not adjusting their criteria to take into account the pandemic. The report notes that there have been reports by businesses of insurers seeking increases in premiums of up to 200%. It also cites an example of the complete withdrawal of existing trade credit insurance where no reasons were given for the loss in cover. The FDF recommends that the UK Government should place a requirement on the trade credit insurance industry for greater transparency and formal notification of the reason(s) for refusal or withdrawal of cover. It also suggests that insurers should be required to reinstate reduced or withdrawn cover backdated to 1 March 2020, except where there are clear and identifiable reasons as to why this would no longer be appropriate. To read the FDF's report go to https://www.fdf.org.uk/publicgeneral/squeezed-middle-paper.pdf.
16 June: Coface predicts a sharp and substantial rise in European corporate insolvencies. Coface's latest press release warns that the economic consequences of the COVID-19 pandemic are of unprecedented scale in Europe. Coface notes that the decline in revenues has deteriorated the liquidity of companies, fostered an increase in payment delays and, ultimately, of illiquidity. In most European countries. As a result, Coface predicts that corporate insolvencies will rise sharply across Europe in the second half of 2020 and during 2021, with the most substantial increases expected to occur in the UK (+37%), Italy (+37%), the Netherlands (+36%), France (+21%) and Spain (+22%). To read Coface's news release go to https://cofaceitfirst.com/resources/focus-corporate-insolvencies-in-europe.
11 June: GAD helps develop support for the UK trade credit insurance sector. The UK government Actuary's Department (GAD) has explained how it played a central role in developing new measures to support the credit insurance market. Actuary Jacqui Draper said: "Our modelling meant that policymakers could explore costs under various scenarios to better understand the potential implications of different scheme structures. Policymakers then used these models during their negotiations with the insurance industry to estimate the potential implications on government finances. This means the scheme ensures firms are supported with risk which is shared appropriately between the government and insurers." To read Gov.uk's news release go to https://www.gov.uk/government/news/gad-helps-develop-support-for-the-trade-credit-insurance-sector.
11 June: COVID 19: European governments have moved swiftly to protect the availability of trade credit insurance. A new report by DBRS Morningstar anticipates that the actions taken by various governments in Europe (Belgium, Denmark, France, Germany, Netherlands and the UK are examined) will ensure the continued availability of trade credit insurance. The report notes that the global credit insurance market was estimated to be about US$8.64 billion in 2017 and predicts that the market will continue to grow at a compound annual growth rate of 2.9% to reach US$ 10.77 billion by 2025. To read the report go to https://www.dbrsmorningstar.com/research/362324/covid-19-european-governments-have-moved-swiftly-to-protect-availability-of-trade-credit-insurance.






New Appointments
International Risks Insurance Advisers (Iria) has announced that it has hired Mark Schulz as an Executive Director. Mr Schulz is responsible for growing Iria's single-risk political risk and credit business in German-speaking Switzerland. He joins from Euler Hermes Switzerland where he was Director of Risk, Claims & Collections and Member of the Executive Board.
Euler Hermes has appointed Andrew Hodson as its Director of Risk, Information, Claims and Collections (RICC) of Euler Hermes UK & Ireland. Mr Hodson most recently headed up Euler Hermes group risk steering and strategy, based in Paris. He succeeds Kris Macauley, who has taken up the role of RICC director for Northern Europe and will relocate to London.
LiquidX has announced that it appointed Todd Lynady as Managing Director and Global Head of Insurance Sales and Business Development. Mr Lynady was formerly Head of Broker Management for the Americas for Euler Hermes. He will be based in New York.

Events
GTR Asia 2020, 8-9 September 2020. Singapore.
GTR Asia will return to Singapore from September 8-9 to host over 1,300 decision-makers and leaders from the global trade, export and fintech community. A leading global financial hub and home to a dynamic and thriving financial ecosystem, Singapore provides the perfect backdrop to explore the future of international trade and investment. 
Offering a truly global perspective and tackling issues with a forward-looking outlook, GTR aim to create events for those passionate about issues that define the trade finance world. Hosted for over a decade, GTR Asia is recognised as the world’s largest international gathering for local and international organisations: from banks to multinational corporations and SMEs, independent financiers, commodity brokers and traders, insurers and risk managers, lawyers, consultants, ECAs and multilaterals and many more. 
Attendees will gain valuable business contacts and learn from the leading figures in the industry; Hear fresh and challenging perspectives from over 100 of the world’s leading trade, treasury and fintech experts; Enjoy innovative content designed to foster maximum engagement between speakers and delegates, bringing all parties involved in Asian trade together for a two-day focused conference and networking exhibition. 
Don’t miss your chance to join leading corporates and trade specialists for two days of discussion, debate and networking. Limited amounts of complementary corporate passes are available to those who are exporters, importers, manufacturers, distributors, traders & producers of physical goods only. For more information, visit here.
Commodities Trading Forum, 16 September 2020. Geneva.
Building on the success of 2019’s inaugural Geneva event and reflecting increased collaboration and partnership with the Swiss Trading & Shipping Association (STSA), GTR is delighted to announce that its newly expanded Commodities Trading Forum will be taking place at the Intercontinental Hotel Geneva on September 16, 2020. Co-hosted and held in partnership with both the STSA and PwC, and reflecting on Switzerland’s role as one for the world’s leading hubs for commodities from oil and gas to metals and agribusiness products, the conference will provide a comprehensive overview of the global commodities and commodity finance markets. Attendees will benefit from critical market insight and idea-sharing through a series of interactive and informative session formats, whilst unchallenged networking opportunities will provide access to over 200 different companies involved in the financing of global commodities. 
Don’t miss your chance to join leading corporates and trade specialists for a day of discussion, debate and networking. Limited amounts of complementary corporate passes are available to those who are exporters, importers, manufacturers, distributors, traders & producers of physical goods only. For more information, visit here.
GTR East Africa 2020, 1-2 October. Nairobi. 
GTR East Africa marks its 11th annual conference in Nairobi, Kenya on 14-15 May 2020, where a cutting edge agenda will explore the key macroeconomic, geopolitical, financial market and tech trends shaping the East African trade finance landscape. This two-day conference provides GTR attendees with a unique opportunity to network with over 350 delegates all under one roof.
Don’t miss your chance to join leading corporates and trade specialists for two days of discussion, debate and networking. Limited amounts of complementary corporate passes are available to those who are exporters, importers, manufacturers, distributors, traders & producers of physical goods only. For more information, visit here.
GTR US 2020, 28 October 2020. Chicago.  
GTR US 2020 will return to Chicago for its fourth year on June 17, 2020, where US companies and their financing partners will meet to discuss the evolution of the trade, supply chain and working capital space. Featuring a host of expert speakers, the event will provide the latest business intelligence required to navigate trade-related risks, and the practical know-how enabling those tasked with facilitating US commerce to form resilient, agile trade financing and risk management strategies. With leading corporates, banks, financiers, insurers and digitization specialists in attendance, this event is not to be missed for those looking to create crucial industry contacts and optimize their trade business. 
Don’t miss your chance to join leading corporates and trade specialists for a day of discussion, debate and networking. Limited amounts of complementary corporate passes are available to those who are exporters, importers, manufacturers, distributors, traders & producers of physical goods only. For more information, visit here.
GTR UK 2020. 2 November. London.
GTR UK 2020 will take place in London on May 6, bringing the trade community together to discuss the potential implications for corporates, financiers and policymakers alike. The event will also consider the important role that all stakeholders have to play in promoting British businesses abroad and seizing on the huge opportunities to secure the UK’s future prosperity, with a strong focus on the role of the financial services community and the UK government in developing a global network to support trading companies. 
Don’t miss your chance to join leading corporates and trade specialists for a day of discussion, debate and networking. Limited amounts of complementary corporate passes are available to those who are exporters, importers, manufacturers, distributors, traders & producers of physical goods only. For more information, visit here.
GTR Nordics 2020, 12 November 2020. Stockholm.
After many consecutive years of attendance growth we are delighted to announce that GTR Nordics 2020 will take place on November 12, moving to the larger event space at the Radisson Blu Waterfront, Stockholm. While offering a more comfortable space to mingle, this also provides the opportunity to add some exciting new event features. GTR Nordics 2020 promises to be the biggest and best yet: Watch this space for more details as we move towards the conference date! Last year GTR Nordics returned to Stockholm and welcomed another record-breaking audience of over 500 trade finance experts, insurers, bankers, ECAs, technology innovators and corporates of all sizes. 
Don’t miss your chance to join leading corporates and trade specialists for a day of discussion, debate and networking. Limited amounts of complementary corporate passes are available to those who are exporters, importers, manufacturers, distributors, traders & producers of physical goods only. For more information, visit here.
About the Sponsor: Markel
Credit is vital to the commercial world. Markel’s global solutions promote trade by ensuring that buyers and sellers can do business with confidence. We offer a wealth of experience in trade credit, political risk and surety covers, to control counterparty payment default, expropriation, confiscation and performance risks. 
Markel's team offers expert knowledge of commercial counterparty and sovereign covers across a wide spectrum of trade sectors. The key benefits for clients include security of non-cancellable credit and country limits, balance sheet and cash flow protection, improved terms for bank financing facilities, effective alternatives to letters of credit or other types of collateral, reduced need for bad debt reserves, fulfilment of capital adequacy requirements, increased potential for sales growth and security of performance obligations - all because the risks are hedged and secured on a firm foundation. 
The team has extensive experience of providing global solutions for clients, but can also tailor policies for specific credit risks, markets and contingencies. As a result of the complexity of our clients’ risks spanning political, cultural, legal and social differences, it is crucial to choose an insurer who understands all of the facets of international and domestic trade, combined with a detailed understanding of available solutions across a variety of contexts and geographies.
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