New Chair, New Views, New Challenges

Chair Views Challenges NEWNEWNEW

Interview with Christian Hendriks, Chair of the Single Risk Committee

Christian Hendriks, Deputy General Manager at Credendo – Single Risk, was recently elected as the Chair of the Single Risk Committee of ICISA. He accepted to share some thoughts about the motivation and the plans he has as a new Chair of the Single Risk Committee. In our conversation with Christian we touch on the effects of the Covid-19 pandemic, technology and fraud developments in the industry of Credit Insurance.

What was your motivation for accepting the nomination for Chair of the Single Risk Committee? This Chair coincides with the still developing COVID-19 crisis that has led to an unprecedented global lockdown with a direct impact on global trade. Once again, ICISA can assume a leadership role in offering an open place of exchanging and thinking on critical concerns. Thanks to our regular meetings, we all can keep a very close watch on market developments and remain vigilant with regard to any current triggers and potential evolution that may affect our industry. Therefore, considering the current environment, this nomination comes at a very challenging and exciting period. However, the biggest challenge will be to keep the level set by the previous chairs!

Are there any opportunities that you identified and you’d like to work on in the upcoming months with your Committee?

The shelves of the Single Risk committee are pretty full already with the work done by my predecessors. We need to continue to follow up on all regulatory topics, like the cost of capital under Basel IV, the impact of the EU forthcoming regulation as regards to minimum loss coverage for non-performing exposures…Added to this, new agenda items, which arose with this specific time, will ask us to address pandemic exclusion, loss environment, trade finance landscape, etc. They are enough opportunities, which may evolve according the market conditions.

How would you describe the effects of the current pandemic on the industry?

Everybody was expecting an economic backlash by the end of the year, after the global lockdown, once the economy will restart. The second or third waves have pushed the return to normality to an indefinite period. It is certainly too early for assessing the impact whilst everything is still in pending settlement. In July 2020, the broker AJG noted that one third of claims reported were attributable to COVID19 - crisis according to PRI insurers. The combination of oil collapse at the same time has increased claim environment deterioration. Some sectors have been hardest hit initially, while others come out unscathed. This might help to accelerate paradigms shifts which were already in motion. More globally, the crisis raises an interesting questioning on the possible scenarios of overcorrection or under-correction of the global economic system. First obvious effect of the current pandemic relates directly to logistic and supply chains management forcing companies to reinvent themselves.

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Could you briefly indicate what you see as the most important lessons the insurance industry learned from the current pandemic?

It is too early to draw conclusions, especially since our industry has felt the impact of fraud cases more than pandemic collateral damages. We could say that the pandemic in a way has helped to reveal those fraud cases, which would not have been detected on the face of it.

What are your thoughts on the topic of fraud and recent “developments” on fraud emerging from the current situation caused by the pandemic? Are there new types of fraud emerging because of the pandemic?

If the pandemic brought a number of frauds to light, we cannot consider these fraud cases as “new types” or arising from abnormal situation. Those fraud cases are tailored to the same pattern and based on the gap in contractual documentation vis-à-vis the banks. We can assume that it will not be limited to the commodity sector. However, we should not conclude to a generalization of fraud cases. Cases remain rare but have potentially catastrophic consequences. Eventually this is something to address to the Committee to understand how the market will respond.

What are some recent technology and information developments that you think might change the future of the industry?

If you ask Siri about “technology in credit or political risk insurance,” you will receive very little information on AI developments associated with our industry. However, there is a range of individual or collective initiatives emanating from major players, brokers and IT specialised providers to create e-placement platforms, or high tech risk management tools. In any industry, IA and IT are from the realm of competition, so perhaps it is no wonder that this has not been widely publicized then, unless you have ensured your technological leadership.

Is the trade credit insurance industry well prepared for the current technology and information developments?

We can’t say that the whole market is ready. The blue chips companies are taking this seriously, the smallest delegate the development to the brokers due to lack investment capacity. However, there might come an issue of concentration risk sooner or later.

What more would you like to share with the readers?

All crisis is an opportunity to promote and highlight the role of our industry in the economy. The trade credit insurance sector has again demonstrated its capability to act as a catalyst for business continuity in a highly disruptive environment. Our industry is a strategic factor of economic and financial stability, and this crisis gives us the opportunity to advocate its benefits towards regulators, clients and partners. I know that ICISA is very committed to this, and the Single Risk Committee will strive to bring its support to reaching this goal.

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Christian Hendriks

Chair of the Single Risk Committee Credendo – Single Risk