Committee of Underwriters

James Deloz

One year after the global outbreak of the Covid-19 pandemic and of the economic crisis which resulted from it, the situation from the Credit Insurers’ perspective remains remarkably calm. If anything, direct and indirect insurers report an even mildly better situation. Business volumes remain resilient and claims continue to be low ; for some direct Insurers claims are currently even very low. As before, members do expect claims levels to increase from mid-2021 onwards, when government support measures are expected to be wound down. However, most members do not, or not anymore, foresee a dramatic increase of claims even then. A lot will depend not so much on when the various forms of government support will be decreased, but on how that decrease will be organised: what will be the advance notice given and, above all, how gradual (or not gradual) will the decrease be.

Members have no other choice but to prepare for this post-support phase, but at the same time their actions, if taken abruptly, may cause unwanted effects. Striking the right balance in this will be the Credit Insurers’ major challenge throughout most of 2021 and possibly early 2022, depending on when government support will be decreased or will be stopped altogether.

Although the full impact of the pandemic-induced crisis is yet to come to the surface, the question is already being asked as to how government support could be organised differently when the next crisis occurs, as inevitably it will. In this crisis of an unseen magnitude, members do value the state support schemes via the trade credit insurers. At the same time, some members would have welcomed a less radical level of premium cession, if not in 2020, then at least in the extension into 2021. Still, the industry tends to continue making maximum use of the state support schemes. Whilst it is unrealistic to hope that government support could be organised at supranational level e.g. at the level of the EU, a minimum of alignment between the member states would be welcomed, if only on practical matters (e.g. in some countries, the state support scheme considers the nationality of the Insured, whereas other countries consider the nationality of the Policyholder). Such alignment would facilitate the Insurers’ management of the state support schemes.

James Deloz

Chair of the Committee of Underwriters Company: Credendo

Credit Insurance Committee

Niels Enevoldsen

COVID-19 Pandemic is still influencing the work of the Credit Insurance Committee. The regular spring meeting was shorter than usually and took place virtually again. Many thanks to ICISA for setting up this meeting.

Tour de table clearly demonstrated that the current main concerns are the development of the pandemic and the economic impact it might cause. It was interesting to learn about the different markets and the development of insolvencies – at the moment surprisingly moderate. State aid packages are still available and the visibility in the markets is very limited. Concerns are the number of zombie companies kept alive by state aid packages and if or when we might see a negative impact hereof.

So the CIC will in the near future follow this trend closely and follow up on development in late payments/ insolvencies along with available state aid solutions. The committee will also closely monitor new demands arising from an unusual market situation.

Our committee agreed to put together a working group to go through some essential FAQ’s concerning Credit Insurance. The aim of this project is to make the sector more accessible for anyone interested in understanding better the trade credit insurance industry.

Another topic of interest for our committee was Brexit. Of course this will still be observed – there might come some legal/license questions up soon that must be addressed. The economic impact of Brexit is still to be monitored and discussed by the committee.

We live strange times and the industry will most likely face new challenges that I believe will become topics of discussions for the Credit Insurance Committee.

Niels Enevoldsen

Chair of the Credit Insurance Committee Company: Tryg Garanti