AU Group, broker-advisor in collateral and receivables financing publishes the results of its new exclusive study on the situation of the credit insurance market 2022.
If in the second half of 2021, the macro-economic indicators of the world economy improved significantly following the gradual exit from the Covid crisis, the current conflict in Ukraine has brutally slowed down this recovery. ! Export ban, inflationary spiral, increase in energy prices… are all disturbing parameters that require adaptation. Focus on 2022 trends.
The 2021/2022 context :
In the second half of 2021, the macro-economic indicators of the world economy improved significantly following the gradual exit from the Covid crisis. Despite some bottlenecks in the supply chains, companies have returned to growth while continuing to benefit from the public aid measures granted as part of the support for companies in the face of Covid 19. Credit insurers have also benefited from this improvement, with a sharp increase in premiums (+7% on average in 2021) and a historically low level of claims.
But since the first quarter of 2022, the war in Ukraine has brutally slowed down this recovery. The disconnection of Russia from the SWIFT banking system, the imposition of export bans, the blocking of access to raw materials (wheat, metal, fertilizers), has aggravated an inflationary spiral (already initiated by 2 years of health crisis ), in a context where interest rates have reached the highest level observed in decades.
” This deterioration in the economic situation unfortunately coincides with the end of the no matter what This is likely to lead to an increase in bankruptcies in many parts of the world, and the specter of a recession in 2023 is no longer dismissed. There is already an upturn in claims among insurers. Also, political risk coverage, surety, factoring and digital tools to limit and manage customer credit risks, will be essential to continue to grow businesses safely! In this context of change and volatility, AU Group’s roadmap is clear: Secure and finance business-to-business credit around the world, innovate for its customers, help them make faster decisions, optimize costs and automate processes » Explain Olivier de La Pontais – Director at AU Group
The main lessons of the study on the 2022 credit insurance market carried out by AU GROUP :
· A market concentrated on 3 insurers “ global »
The credit insurance market is estimated at 8 billion euros. This short-term market will show strong growth in volume in 2021 (between +7% and +8%). The implementation of public aid due to the Covid crisis has made it possible to avoid the dreaded wave of defaults. The various measures put in place in 2021 have made it possible to revive the economy, positively impacting the turnover of credit insurers, benefiting from the resumption of activities by policyholders.
Three main insurers account for more than 70% of total premiums. Among them :
Euler Hermes today Allianz Trade (31% market share). It shows a +6% increase in sales in 2021, thus reaching a new all-time high.
Atradius (24% market share). This player delivers the best growth in the sector of +8.7% compared to 2020. This insurer records the highest turnover in its history.
Coface (16% market share) benefited from an 8.1% increase in turnover.
The so-called “niche” insurers, characterized by their specialization, share the rest of the market. Note: Zurich has left the credit insurance market while some new insurers have appeared.
· A clear trend towards digitization of the credit insurance market, making it possible to deliver information instantly but also to support the growth of e-commerce
The digitization of B2B exchanges (accelerated by the health crisis) has created the emergence of new payment security schemes. Credit insurers, banks, start-ups and fintechs now offer the possibility for an e-merchant to grant instant deferred or split payments to their B2B buyers. Added to this is the rapid growth of B2B BNPL (Buy Now Pay Later), which makes it possible to grant credit to a customer while paying the seller as soon as the order is placed.
· Profitability of actors
In 2021, the increase in profitability has been spectacular. The normalization of the economy in 2021, and the continuation of government measures to support businesses, have led to a historically low level of claims for the insurance market.
As a result, the analysis of operating results and net results show excellent levels of profitability
– Atradius posts net income of €240m in 2021 vs €44m in 2020
– Coface posts net income of €224m in 2021 compared to €83m in 2020
– Allianz Trade does not publish its net result!
· The top 3 credit insurers benefit from a geographical presence throughout the world
Directly or via “fronter” partners, the top 3 credit insurers (Allianz Trade, Atradius, Coface) have a network throughout the world:
– Asia Pacific,
– Latin America,
– Middle East,
– North America,
– North Europe,
– Western Europe,
– Central Europe.
This geographical network allows them to provide a local service to their policyholders and in particular to arbitrate at the foot of the risk. Coface continues to benefit from a denser network with its own offices or partners in almost 100 countries.
Credit insurance will remain a cornerstone for development in 2022-2023 (especially internationally), continuing to be at the forefront of an increasingly volatile and interconnected global economy.
The study of the credit insurance market is carried out on the basis :
Analysis of the financial statements available from credit insurers in 2021
Information published by ICISA and available at https://icisa.org/
Financial ratings granted by major rating agencies to credit insurers
Assumptions and estimates made by AU Group
About AU Group
AU Group is a French consultancy and brokerage firm with an international dimension, specializing in the field of customer credit, a market leader.
Our mission: to engage alongside companies and support them in optimizing customer credit to support their growth.
AU Group advises and structures tailor-made solutions, negotiates the best offers and supports its clients in the implementation and monitoring of solutions for:
• Customer credit guarantee
• Receivables financing
• Political risks
• Customers management
• E-commerce, Market Place, digital transactions
AU Group is also driven on a daily basis by a strong desire to innovate and make the most of digital to simplify “credit management” through the use of exclusive and high-performance digital tools.
AU Group is present in 44 countries
and with a team of more than 260 professionals, experts and committed to our 4,500 customers.