Trade Credit Insurance!

Transcription

1 Trade Credit Insurance!

2 Agenda! Credit Insurance Credit Terms & Sales Cycle Key Benefits! Policy Structure Policy Coverage Claim Payout Example! Market Trends Key Challenges Australian Agriculture Insolvency Statistics! Solution Proposed Solution for AgLink Next Steps What s Required? CRM Brokers Pty Ltd - ACN ABN AFS Licence

3 Recommended Insurer: Atradius - Facts & Figures! Atradius is the most international and integrated credit insurer in the world! More than 160 offices in 45 countries! Worldwide more than 3,300 employees! Financial strength rating by A.M. Best is A (excellent) outlook stable and A3 outlook stable by Moody s! Access to information on 100 million companies! Headquarters: Amsterdam (the Netherlands)

4 Atradius a Global Presence! They operate where their clients are: strong local expertise! They manage risk & collections wherever they have exposure as close to the buyer as possible Oceania Australia New Zealand The Americas Argentina 1 Brazil Canada Chile Europe Austria Belgium Czech Republic Denmark Finland France Germany Greece Asia China Hong Kong India Indonesia 1 Japan Malaysia 1 Philippines 1 Singapore Mexico USA Middle East Israel 2 Saudi Arabia¹ Lebanon 2 UAE 1 Hungary Iceland 1 Ireland Italy Luxembourg The Netherlands Norway Poland Portugal Russia Slovakia Spain Sweden Switzerland Turkey United Kingdom Taiwan 1 Thailand 1 Vietnam 1 Africa Kenya 2 South Africa 1 Tunisia 2 1 Co-operation agreements with local partners. No Atradius office or shareholding. 2 Associated company or minority interest in local business.

5 What is Trade Credit Insurance? Adding to the value chain Financing Receivables Insured Company (Seller) Credit Insurance Contract Cover of Non- Payment Risk Delivery of Goods and Services Credit Terms Agreed The Credit Insurance Triangle Risk Assessment and Approval of Credit Limits in Favour of the Insured Customer of Insured (Buyer = Risk )

6 Key Features Modula Policy Atradius Modula is a revolutionary concept in credit insurance that allows you to build a policy to your specific needs. Atradius Modula provides:! A flexible and tailored approach to credit insurance! Access to an international recovery service! First class online policy management system (Serv@Net)! Cover for up to 90% of debt! Dedicated account management support

7 Credit Insurance in Practice-Timetable Contract signed Dispatch & invoice Due date Probable loss Claim / Ascertainment of loss WaiOng period e.g. 60 days e.g. 120 days up to Protracted Default Pre- credit period Credit risk period Max extension period (MEP) Credit limit decision Invoicing period (max 30 days from despatch) Maximum payment terms e.g. 120 days Apply internal credit management procedures for recovery No cover for future deliveries NoOficaOon of probable loss / transfer for collecoon (within 30 days of MEP expiry) Date of loss / submit claim

8 What are the Key Benefits? Reduce Financial Risk Improve Cash Flow Support Credit Management Supports Sales Growth Risk protecoon- commercial & poliocal Protects Cash flow & profits Reduce bad debt provisioning Hedge against catastrophe risk Peace of mind Claim payments Maximise debt collecoon Access to finance Access to collecoons service- some contribute to costs Automated credit control via insurer s systems Creates discipline/ control Second Opinion Leverages market intelligence- i.e. payment experience from clients across Australia Supports most compeoove terms of payment Confidence to grow in new markets, with new customers or bigger contracts Financial health check at tender stage

9 What s Covered?! Insolvency Includes the following:! voluntary administration! liquidation! bankruptcy! receiver / manager appointed! Default Buyer fails to pay within the policy waiting period, this period starts from the due date! Political Risk Losses in countries other than the supplier s country, including:! foreign exchange blockage! import bans! war & civil riots! contract frustration! public buyer default! natural disasters

10 Claim Payout Example Invoices AUD $100, Exclusion of Tax (GST) AUD - $9, Amount covered AUD $90, Amount before indemnity % is applied AUD $90, Indemnity Percentage (90 %) Balance AUD $81, Each & Every (first loss) AUD - $5, Amount payable AUD $76,818.18

11 Key Challenges Australian Agriculture! Vagaries of the Australian climate! Global price instability! Long- term downward trend in farmers terms of trade! Future growth largely dependent on exports - maintaining compeooveness in the global market * Source: Grant Thornton, Food and Beverage Study 2013

12 Insolvency Risk Australia