Overview of the UK Credit Insurance Market · 2019-10-10 · UK Post 2000….. FILE 2017082 ....
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Overview of the UK Credit Insurance Market Chris Ardern & Seb Rice FILE 2017082
Transcript of Overview of the UK Credit Insurance Market · 2019-10-10 · UK Post 2000….. FILE 2017082 ....
Overview of the UK Credit Insurance Market
Chris Ardern & Seb Rice
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The United Kingdom
Union of England, Scotland, Wales and Northern Ireland
Plus Jersey, Guernsey, Isle of Man (Crown dependencies)
And British Overseas Territories (Anguilla, Bermuda, BVI, Cayman Islands, Falklands, Gibraltar)
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Diversified Economy, Dominated by London
City of London – Financial Centre
West Midlands – Steel, Automotive
South Wales – Steel mills, Coal
East England – Agriculture
Northern England – Coal, Textiles, Steel
Scotland – Shipbuilding, Finance
Northern Ireland – Shipbuilding, Textiles
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UK Snapshot • GDP: $2.629 trillion • Public debt: £1.58 trillion (2016) 82.8% GDP
• Population 65 million (2016) • Labour force ~ 32.1 million (June 2017) • Services 79.7% • Industry 18.8% • Agriculture 1.5%
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Main Trading Partners
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Quarterly growth & levels of GDP
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Bank of England Interest Rates
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UK Inflation Rate
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UK Unemployment Rate
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History of Credit Insurers in UK
1918: Euler Hermes (as
Trade Indemnity)
1991: Atradius
(NCM acquires ECGD)
2000: Coface UK
Post 2000…..
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Credit Insurers in the UK
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The UK Market Broker channel accounts for 93% of policies
7% through Direct channel (EH, Atradius, Coface Direct Sales Forces)
12,000 policies in the UK
Over 20% of policies are for exporters
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UK Insolvencies
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Nr of companies (millions) 1,0 1,0 1,0 1,1 1,1 1,1 1,1 1,1 1,1 1,1 1,1 1,1 1,2 1,3 1,4 1,5 1,6 1,6 1,8 1,9 2,1 2,5 2,6 2,8 2,7 2,5 2,5 2,7 2,9 3,0 3,2 3,5
Insolvency Rate 1,49 1,44 1,14 0,85 0,95 1,37 1,98 2,22 1,88 1,52 1,32 1,23 1,05 1,02 1,02 0,95 1,02 1,02 0,79 0,64 0,78 0,71 0,61 0,75 0,89 0,79 0,81 0,71 0,61 0,54 0,46 0,47
Nr of Insolvencies (thousands) 14,9 14,4 11,4 9,4 10,5 15,1 21,8 24,4 20,7 16,7 14,5 13,5 12,6 13,2 14,3 14,3 16,3 16,3 14,2 12,2 16,3 17,8 15,9 21,1 24,0 19,8 20,3 19,3 17,7 16,3 14,7 16,5
0,0
5,0
10,0
15,0
20,0
25,0
30,0
0,00
0,50
1,00
1,50
2,00
2,50
3,00
Nr
Of
Inso
lve
nci
es
(th
ou
san
ds)
Inso
lve
ncy
Ra
te %
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ABI claim statistics
Total number of claims fell 15% from 2017Q1 Gross claims incurred fell 36% in Q2, to £40m
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ABI claim statistics (continued)
In comparison to 2016Q2, total claims fell by 5% and gross claims paid dropped by 6%.
And, gross paid claims this quarter went up by 11% to £73m
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ABI claim statistics (continued)
Gross debt stood at £158m in Q4 2016, the highest recorded figure since the first quarter of 2009. Has dropped back down in two quarters since.
But, total gross debt increased 8% from 2017Q1, largely due to 13% rise in UK domestic gross debt
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Key Facts and Numbers
£4m in claims paid every week by UK insurers
£314bn of UK trade now covered by UK insurers
Claims paid in 2016 were up 40% compared to 2015
Peak level of claims reached in 2009 - £286m Lowest year for claims
was 2014- £105m paid
• Source: ABI claim statistics 2016 FILE 2017082
Political & Economic considerations June 2017 election resulted in a hung
Parliament – Conservative party needed DUP support
4th major vote in the UK in four years
2014: Scottish Independence Referendum 2015: General Election (Conservative victory) 2016: EU Referendum (“Brexit” vote: 51.9% vs 48.1%) 2017: Snap General Election
Next: IndyRef2……?
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Brexit Recap
Brexit
Article 50
Negotiations Commence
Laws & Immigration
Trade Agreement
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Sterling Rates
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What Could Derail Brexit ?
May Government Falls
Sustained Shift in Public Opinion
Collapse in Talks
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Where Could We Be in April 2019 ?
Stable Brexit
Negotiations Extended
UK Crashes Out
UK Stays In Single Market
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Brexit Headlines
10,000 UK finance jobs affected in Brexit’s first wave
The UK's top Brexit official has quit his job after just 1 year
BoE’s Carney: Brexit would push up inflation and interest rates
Sir James Dyson expects no Brexit deal
Keep EU trade as it is until 2021 - May
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2018 Economic Forecasting GDP CPI
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More consolidation or new entrants to the market?
Rates to continue to soften or will attritional claims and “Catastrophe” losses force rates up?
Impact of Lloyd’s will continue to be felt
Insolvencies are forecast to rise / growth forecast to slow
Continued evolution of the product – shift away from “traditional” Whole Turnover product
Political Risk policy extensions / focus on exporting
Credit Insurance 2018 – what to expect?
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