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SUB CATEGORIES Credit Bureaus  |  Credit Insurance |  General | 

Decreasing trade insurance claims in Europe, rise in claims in China

20 April 2015 Charles Nortje, Credit Guarantee Insurance Corporation
Charles Nortje, CEO of Credit Guarantee Insurance Corporation.

Charles Nortje, CEO of Credit Guarantee Insurance Corporation.

The International Credit Insurance & Surety Association (ICISA) met in Athens for the ICISA Spring Meetings 2015. Members were upbeat about the current market conditions and global outlook, with a stable claims environment and growth in demand. However, the claims picture for China is less favourable.

“The ongoing softness of the markets indicates however that business, especially for South African exporters is not yet back to normal and the next twelve months could see a continuation of uncertain market conditions,” comments Charles Nortje, CEO of Credit Guarantee Insurance Corporation.

ICISA members received presentations from leading Greek banks and trade credit insurers operating in Greece. In spite of the many challenges faced by Greek traders, the mood was positive. “International trade credit insurers have invested heavily in sophisticated information systems to optimise their ability to cover Greek risks, in particular for domestic transactions. Greek traders could benefit from ongoing trade credit insured transactions throughout the crisis.”

In Europe a decrease in claims and an increase in growth are noted. Growth is expected especially in Asia and the MENA region. Africa is also emerging as a growth region in particular for single risk transactions.

As far as the surety and bonds market is concerned, conditions are stable in a continued soft market. Although some members expect premium income to decrease, most expect no change in premium income in the course of this year. Almost half of the surety members see claims in Europe decrease, which is an improvement on previous years. Although the construction sector in Europe is still experiencing difficult times, there has been a decrease in insolvencies. The tough market conditions are reflected in the stable growth outlook for this year, while growth in this sector is expected mostly in Latin America and Europe.

“A continued economic recovery is expected on all continents which underpins the growing demand for trade credit insurance cover across the globe. The South African economy however, is posting very muted growth with continued energy constraints and labour imbalances in the country, which emphasises the need for companies to carefully assess their credit risk and to ensure that they are adequately covered,” concludes Nortje.

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