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
Moderated by Deepesh Patel, Editor, Trade Finance Global
Streamed on LinkedIn Live
- 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?
Podcasts by Tinubu
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 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?
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
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.
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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- The changing risk landscape of trade credit insuranceIn a world where roughly 15% of trade is protected by insurance, eyes are often on the trade credit insurance stage. The credit political risk insurance (CPRI) industry helps lenders and corporates with lending capacity and regulatory capital risk. Credit insurance underpins global trade and finance, managing both concentration risk and country limits.
- Resilience, technology, and risk appetite: credit insurance experts weigh in on current trendsTo understand how firms and instructions operate in the trade credit insurance industry and the role that technology may play in altering this landscape, TFG’s Deepesh Patel sat down with Gary Lowe, global head of the Global Credit Insurance Group at Standard Chartered, Jérôme Pezé, CEO at Tinubu, Janusz Władyczak, CEO at KUKE, the Polish export credit agency (ECA), and Richard Wulff, executive director at ICISA.
- ICISA Trade Credit Insurance Week: GreenStars’ Paul Wollny on the world of credit insuranceThe world of credit insurance has seen a multitude of fluctuations in the market, as of late. Whether it be, COVID-19, geopolitical instability, or inflation, these factors have significantly impacted the sector, lowering the appetite for risk.