The umbrella that doesn’t open? The future of credit insurance

Presented by Trade Finance Global and Tinubu

TFG has joined forces with Tinubu to present a virtual tradecast, looking at 4 different sectors of the trade credit insurance industry, and how they have been impacted by the COVID-19 pandemic, geopolitical issues and inflation.

The tradecast will touch on:

  • A trade credit insurance industry outlook
  • How public and private credit insurance support global economies and trade
  • Risk appetite, claims, payouts: how to make trade credit work for everyone, everywhere
  • Outlook, innovation and sustainability in trade credit insurance
  • Expert perspective: banks & lenders, insurtechs, associations, and ECAs

The Panel

Jerome Peze Tinubu Webinar

Gary Lowe

Janusz Wladyczak

Richard Wulff

Moderated by Deepesh Patel, Editor, Trade Finance Global

864 viewers

Live Tradecast

75 minutes

Streamed on LinkedIn Live

Sponsor

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Tinubu

Credit Insurance

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Introduction

  • Introduction to the panel
    • Gary Lowe, global head, global credit insurance group, Standard Chartered,
    • Jérôme Pezé, CEO, Tinubu,
    • Janusz Władyczak, CEO, KUKE S.A,
    • Richard Wulff, Executive Director, ICISA
  • What is trade credit insurance is and how does it underpin global trade?
  • Why do banks utilise trade credit insurance?
  • How do ECAs work? What is the difference between OECD operating ECAs and ECAs based in developing countries?

Tinubu

Podcasts by Tinubu

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Perspectives – trade credit insurance

  • How has the market fared with unprecedented challenges around inflation, war and political risk and through the disruption of supply chains?
  • There has been a massive wave of states withdrawing their support to private businesses, what do you expect the repercussions of this to be?  
  • What’s happened from a claims and payouts perspective? 
  • Has risk appetite changed and how has this impacted claims from a private market perspective?

Summary article: Resilience, technology, and risk appetite: credit insurance experts weigh in on current trends. Read here

Risk Appetite

Resources

Tinubu podcast: Getting Saas into surety and credit insurance

Insurtech champions – Tinubu Square named to 2021 InsurTech100 list

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Risk appetite in the context of claims

  • What is the current general consensus on risk appetite? 
  • How willing are ECAs in encouraging collaboration and sharing risk? 
  • How will the rise in digitalisation help mitigate common risks associated with credit insurance?

Expert Perspective

Resources

Under the spotlight: MSME access to finance in emerging and developing markets

Whitepaper: Accelerating trade digitalisation to support MSME financing

Tinubu Podcast: Future-proofing trade finance and insurance through technology

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Where is the industry heading? Future outlook and innovation

  • Managing capital and improving returns through less traditional avenues. Thoughts on capital calls, new economy, renewable energy and private equity
  • How will customer needs be met in terms of buyers of CPRI?
  • How will the capacity of risk evolve and where will this take the market?

Panel Questions and Answers

Q. Is it possible to comment on the role of “Credit Guarantees” in SCF? If we consider a chain of suppliers ending to a manufacturer which sells the finished product, and a credit given to this manufacturer transferred to chains before (i.e. suppliers), how a credit guarantee institution can help the finance of this chain?

RW: Trade credit insurance is about helping to finance the whole supply chain. Whilst we do not finance, sellers in every part of the chain can and do buy trade credit insurance which enables their financiers to provide terms.

Response: Thanks a lot. What you said, it is exactly done in traditional sense. Now, we have some digitalized platforms of supply chain, the final buyer or manufacturer applies for credit and the banks issues BPO , this BPO is transferred from one chain (supplier) to the other (instead of each chain asks independently for credit using credit insurance/guarantee). So this BPO will be cashed at Bank’s counter on due date by the last chain (if not discounted in between). Now if a credit guarantee is issued for the manufacturer to receive the BPO, shall CG be transferred along with BPO via chains? Or not at the due date, just the manufacturer is responsible for honoring the debt of BPO? And if the debt is not paid, then CG will be called.

RW: Interesting thought! Would need some work as the insurance is assessed on the payment of the next debtor/link in the chain.

Q. With the impending stock market crash and the BRICS countries moving away from the petro dollar and moving to precious metals backed currency, what are your thoughts on western economies ?

JP: Likely stagflation (recession+inflation), potential stress on public debt issued by already highly indebted countries, and -with a time-lag- increase of defaults by corporation in Europe, in a tense social environment. A key element regarding the timing and the extent will depend on governments and BCE policy.

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