Transcript Examples for the design of charts

Welcome to our
Premier Broker
Event 2012
Agenda
1
Euler Hermes
in the UK
Gerard van Kaathoven
2
The Economic
Environment
Mark Wyatt
Premier Broker Event
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4
Your questions
Our answers
3
The Euler
Hermes
Commercial
Strategy
Lukas Neckermann
2
Agenda
1
Euler Hermes
in the UK
Gerard van Kaathoven
2
The Economic
Environment
Mark Wyatt
Premier Broker Event
© Copyright Euler Hermes 15-07-21
4
Your questions
Our answers
3
The Euler
Hermes
Commercial
Strategy
Lukas Neckermann
3
Euler Hermes in the UK
2011: My view from outside
Attractive world agency proposition just
launched
Good recovery from 2008-2009
No new products, channels or
opportunities to grow …the company or
the market
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World agency proposition perceived as
separate to Euler Hermes UK
4
UK Credit Insurance market
1997 – 2011 Premium & Customers
Gross Written Premium – 1997 - 2011
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Number of Policies –1997 - 2011
5
UK Credit Insurance market
Insured turnover per £ premium
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Euler Hermes in the UK
2013: My inside perspective
An efficient, integrated and innovative credit insurer
that uses its global power to locally deliver
exceptional customer service across the widest
spectrum of products and channels amongst
competitors in the UK and Ireland
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Euler Hermes in the UK
2013: What it means
An efficient, integrated and innovative credit insurer that uses its global
power to locally deliver exceptional customer service across the widest
spectrum of products and channels amongst competitors in the UK and
Ireland
Efficient, locally delivered customer service
 SME – A broadly-skilled Customer Line, that solves 80+%
of issues on the spot, with support from a specialised Risk and
Commercial second-level service
 Strategic and Major – Proactive commercial and risk account managers
doing joint visits and calls
 World Agency – locally delivered, bespoke service, with global scope
and strength
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Euler Hermes in the UK
2013: What it means
An efficient, integrated and innovative credit insurer that uses its global
power to locally deliver exceptional customer service across the widest
spectrum of products and channels amongst competitors in the UK and
Ireland
Innovative spectrum of products and channels
 New Products – CAP Europe, XoL, TCU, Micro-SME
 New channel – Use banks to generate new-new business
 One Goal – Grow the Market!
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Euler Hermes in the UK
2013: What it means
An efficient, integrated and innovative credit insurer that uses its global
power to locally deliver exceptional customer service across the widest
spectrum of products and channels amongst competitors in the UK and
Ireland
Integrated customer service across a wide spectrum
Link to
Property
and
casualty
Global
healthcare
Directors
and
officers
Pensions
Risk
transfer
Asset
management
Travel and
assistance
Premier Broker Event
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Motor
10
Euler Hermes in the UK
What it means
It means: One Euler Hermes in UK & Ireland!
Link to
Property
and
casualty
Global
healthcare
Directors
and officers
Pensions
Risk
transfer
Asset
Management
Travel and
assistance
Premier Broker Event
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Motor
11
Euler Hermes in the UK
2013: What it means for you
 We are not looking backward at the competition, we are looking
forward to our future
 Broadening our suite of products which do not compete with each
other, but complement each other for our customers
 Broadening distribution channels which do not compete with each
other, but together provide strong opportunities for our customers
 Our appetite to grow the market should be of benefit to all of us
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12
Agenda
1
Euler Hermes
in the UK
Gerard van Kaathoven
2
The Economic
Environment
Mark Wyatt
Premier Broker Event
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4
Your questions
Our answers
3
The Euler
Hermes
Commercial
Strategy
Lukas Neckermann
13
It’s Hallowe’en time!
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14
Headlines
 “Is China heading for a Crash?” – BBC Website
 “Moody’s in threat to strip US of top rating” FT Sept 12
 “Brazil liquidates two banks as slowdown takes hold” FT Sept 12
 “Greeks will need third bailout package” Times Sept 12
 “OECD slashes UK’s economic growth outlook” City AM – Sept 12
 “Optimism among UK businesses has fallen to a 20 year low… the economy will
continue to contract…” BDO Sept 12
 ‘’UK austerity squeeze set to run until 2018’’ - FT Oct 2012
 “Triple-dip UK recession expected” – BBC Website Oct 2012
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Continued Global Uncertainty .....
Americas
 US – Possible recession due to a ‘fiscal cliff’
 Brazil – Consumer debt default in July rose to a 3 year high
Asia
 China – Industrial production for August was its worst in 3 years
Middle East
 Middle East – Israeli invasion of Iran before the year end?
 Syria – A total bloodbath. Soon to be at war with Turkey??
Europe
 Eurozone – Unemployment now at its highest level ever at 11.3%
 Spain – Will a €300bn bail out be needed?
UK
 UK – Worst performing G7 nation in 2012 apart from Italy
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Financial Crisis
“... a rebalancing of the
UK economy will
require patience. The
overall outlook for
growth is weaker. We
are navigating rough
waters and storm
clouds continue to roll
in from the Euro area”
Sir Mervyn King
Governor, Bank of England
August 2012
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Financial Crisis
" ... the road is longer
than anyone had hoped
... We've got to find
more cuts... We've
already pencilled in
£16bn cuts in 201516…”
George Osborne
Chancellor of the
Exchequer
October 2012
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Facebook
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World economy to improve only moderately in 2013
(+2.8%) after an even weaker than
expected 2012 (+2.5%)
A 3-tier dynamic with growing spreads into 2013
World activity not to recover pre-crisis tempo
2
1
GDP and trade
(yr/yr growth, in % and real terms)
1
4%
15%
3%
10%
2%
5%
1%
0%
1
0%
-5%
-1%
OECD GDP (r)
-2%
-10%
non-OECD GDP (r)
world trade (l)
-3%
-15%
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
1) GDP 2011 weighting at 2011 exchange rates
2) Rounded figures
SOURCE: IHS Global Insight, Euler Hermes
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Forecasts
SOURCES: IHS Global Insight, Euler Hermes
20
Demand fundamentals continue to weaken
Labor market is still facing difficulties
Confidence: EZ surveys show growing pessimism
Unemployment rates
(in %)
Confidence levels in Eurozone
(monthly surveys, latest point=August 2012)
40
30
20
10
0
-10
-20
-30
-40
Retail
Construction
-50
Services
Industry
-60
00
SOURCE: Global Insight, Euler Hermes
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02
04
06
08
10
12
SOURCES: Global Insight, Markit, Euler Hermes
21
World insolvencies to increase again in 2013…
Our Global Insolvency Index is expected to increase by
+3% for FY 2013, after a rebound of +4% for FY 2012
(unchanged from June forecast)
This forecast is line with our slightly revised downward
central macroeconomic scenario
Global Insolvency Index
Yearly levels - basis 100 in 2000 (1)
World GDP (left axis)
5%
140
133
121
120
118
114
120
125
-15%
4%
-15%
-10%
-12%
105
99 100
100
128
125
124
-20%
EH Global Insolvency Index (right axis - reversed) (*)
3%
106
-8%
93 96 92
-4%
2%
84
80
1%
-5%
-6%
-4%
0%
1%
3%
4%
5%
3%
60
10%
0%
40
9%
15%
14%
-1%
20%
20
-2%
0
97 98
99
00
01
02
03
04
05
06
07
08
09 10
11 12
13
25%
26% 25%
-3%
00
01
02
03
04
05
06
07
08
09
30%
10
11
12
13
14
1) Countries weighted with 2011 GDP at current exchange rates
SOURCE: National statistics, Euler Hermes
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... mainly because of (Southern) Europe
(i) forecasts by regions
Between slower decrease (Americas, asia-Pacific),
reversal trend (DACH, France, Northern region) or faster
increase (Mediterranean countries), all EH regions are
facing a less favourable perspective
Mediterranean countries slightly more touched than
previously expected
Yearly changes of insolvencies
550
550
Index base 100:2000
%of
World
GDP (*)
Weight
2009
2010
2011 2012 f 2013 f
500
500
Mediterranean countries
Mediterranean
countries
Global Insolvency Index
83,8
100,0%
25%
-6%
-4%
4%
3%
450
450
Americas
Americas
Americas Index
28,8
34,4%
37%
-8%
-15%
-9%
-7%
Asia-Pacific Index
25,0
29,8%
-7%
-12%
-6%
-1%
3%
Northern Europe Index
12,7
15,1%
32%
-4%
-3%
6%
-2%
Germany-Austria-Sw itzerland Index
6,9
8,2%
13%
1%
-4%
0%
1%
300
300
France Index
4,1
4,9%
12%
-2%
-3%
3%
2%
250
250
Mediterranean countries Index
6,3
7,5%
65%
1%
17%
28%
19%
Euro zone Index
19,2
22,9%
39%
-1%
7%
18%
11%
Base 100 : 2000
Euro
zone
Euro zone
Northern
Europe
Northern Europe
Asia-Pacific
Asia-Pacific
400
400
350
350
200
200
150
150
100
100
50
50
04
04
05
05
06
06
07
07
08
08
09
09
10
10
11
11
12
12
13
13
1) Countries weighted with 2011 GDP at current exchange rates
SOURCE: National statistics, Euler Hermes
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Too famous to fail…
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Worldwide Failures 2012
 Air Australia – Top 10 airline
 Spanair – Spain’s fourth largest airline
 Q-Cells – Worlds largest producer of solar cells
 Schlecker – German drugstore – 47,000 jobs
 Neckermann – German bankruptcy – 2,400 jobs – UK
equivalent is ‘Argos’
 Eastman Kodak – US $6.2bn pre-petition assets
 Digital Domain Media Group – stock market valuation of
US $400m in May 2012
 Eircom Group – largest ever Irish corporate failure
 San Bernardino
 Mammoth Lakes
Californian cities filed for Bankruptcy
 Stockton
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2012 UK failures we did see coming
 Game
 Clintons
 Peacocks
 La Senza
 Jane Norman
 DBC Foodservice
 Past Times
 D2 Jeans
 Pumpkin Patch
 Glasgow Rangers
 Waverley TBS
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Company Voluntary Arrangements (CVAs) 2012
Company Voluntary Arrangements
In 2011
699
In 2012
924
+32%
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UK Total Insolvencies & Forecast
Company Liquidations & Administrations
Insolvencies will still remain at a higher than 10 year average level.
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UK Watchlist Trade Sectors
Retail:
 Every day 20 shops close on the UK High Street
 1 in 6 shops in the UK now lie empty
 Like for like sales fell again in August by 0.4%
 August was the worst monthly performance for retail sales
in 2012
 Retail conditions expected to remain difficult for at least 12
months – recovery is only likely to be very gradual
 Consumer confidence remains low and discretionary
spending will continue to be squeezed in the short term
 Upside from European Championships, Jubilee and
Olympics but pull forward of demand rather than absolute
increase
 2012 Failures: – Game, La Senza, Clintons, Peacocks,
JJB Sports,
United Carpets and Optical Express
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UK Watchlist Trade Sectors
Construction
 Construction output in 2nd quarter of 2012 fell by 3.9%
compared with first quarter of 2012 and by 9.5% compared
to same period last year.
 12,710 construction companies have gone out of business
in the last three years – equivalent to more than 10 a day.
 EHUK claims experience sees construction related claims
represent
 Private sector (40% of industry’s output) is not
compensating for Construction Public Spending cuts of
£90bn between 2012 – 2014.
 2012 Failures:- Airedale, Rock Intl, MJN Colston.
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UK Watchlist Trade Sectors
Paper
 29% increase in paper & print sector claims since last year
and 46% like for like increase against 2010.
 Newspaper sector in terminal decline. Main players
struggling to monetise on-line activity.
 Digital advertising forecasted to grow to 50% of the market
in future, from a current base of 15% - 20%.
 Overhead base is very sensitive to energy price volatility.
 High street retail model for books is no longer viable.
 Industry is capital intensive and debt levels are a real issue.
 2012 Failures:- Webb Ivory, The Blue Printing Company,
Alderson Print Group
 Further insolvencies forecasted, in particular a large weboffset failure as three of the market leaders are heavily loss
making.
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“When one door closes
another door opens;
but we so often look so
long and regretfully
upon the closed door,
that we do not see the
ones which open for
us”
Alexander Graham Bell
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Positive Trade Sectors
Automotive:
 2011 was very much a rebalancing of the supply chain from the Far
East to local suppliers and those with spare manufacturing capacity
in the UK have quickly found they are back in demand with UK
based OEM’s
 Output was up 15% for the year to end July 2012, with 875,998
vehicles produced in the UK
 A key factor driving this sectors performance are the high level of
export sales into high growth markets such as China. Almost 80%
of cars built in the UK are exported
 For the first 7 months of 2012 EHUK Automotive exposure rose a
further 15.5%. This follows a 30% increase in 2011
 Over the past 18 months, the major OEM’s involved in the British
automotive industry have announced expansion of some form, a
collective total of around £4.5bn of new investment
 Jaguar Land Rover. £370m new investment in Range Rover
 Honda. £267m new investment in Swindon factory
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Positive Trade Sectors
Chemicals:
 Considered to be the UK’s largest manufacturing export sector
 Increasing export opportunities in non-traditional markets
 Evidence of some business being won back from low-cost manufacturing countries
 Industry has gone through a tough few years and challenges remain with weak demand
from Europe and sectors driving demand for chemicals
 However, in 2011, growth was higher than for the rest of the manufacturing sector
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Positive Trade Sectors
Pharmaceuticals:
 Relatively stable demand despite economic decline
 UK remains a leader in R&D in this sector
 Challenges in respect of patent issues, especially in developing markets, but this
remains an attractive industry in terms of export potential.
 Claims’ experience remains very good.
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Positive Trade Sectors
IT & Electronics:
 Growth opportunities remain in cloud technology with the market
expected to grow by c150% by 2014.
 Insolvencies in 2012 have been principally confined to smaller firms
with a more concentrated contract and funding reliance.
 4G spectrum launch in the UK – benefit for UK plc from auction
rights estimate to raise £4.5bn as well as private sector from
increased demand for new mobile handsets as customers look to
take advantage of much faster broadband speeds.
 Strong demand expected for technology companies as businesses
look to cut costs through increased automation. Positive impact
being seen across variety of sectors from silicon chip designers to
social networking firms.
 Margins continue to be a prime focus through continued
consolidation, the larger players are addressing this and broadening
their product offering through acquisition. Notable acquired
businesses have included Magirus, Brightpoint and SDG.
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Claims Service – Looking Ahead
 Today we deliver a market leading claims’ service.
 Must avoid complacency and continue to improve the speed
and quality of our claims’ service.
 “AUTOMATION” is the key to progress i.e., full on-line claims’
submissions for both Broker and Client.
 Q3 2014 is likely implementation date for replacing Claims’
system and introducing significant new EOLIS functionality.
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Communication must be at the centre of everything
we do…
 Quarterly Risk Office Bulletins
 Weekly Broker Surgeries
 Quarterly Risk visits to the Regions including Ireland
 Case studies
 Openness
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“Our Risk Commitment”
 Internal initiative promoted from the bottom up
 Demonstrates Risk Department’s commitment to focus on:- Customer
- Pro-activity
- Delivering a quality service at all times
- Taking responsibility
- Effective communication
- Transparency
- Accountability
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Agenda
1
Euler Hermes
in the UK
Gerard van Kaathoven
2
The Economic
Environment
Mark Wyatt
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4
Your questions
Our answers
3
The Euler
Hermes
Commercial
Strategy
Lukas Neckermann
41
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Growth … We’ve been preaching it!
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The alternative to growing our market
RIP
Credit Insurance
in the UK
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Our Actions speak louder than our chants
Step 1: Invest in our Service
 Significant, companywide customer-service training
implemented
 Online Collections System, delivered
 Customer Line: 11,000 calls, 80+% resolution,
9 Account Advisors
 EH Net Promoter Score continues to increase in
the UK
Step 2: Invest in Product Innovation
 CAP Europe launched (over 600 limits and
 1 Mn premium written!)
 Transactional Cover Unit – launched June 2011,
now also in London
 Excess of Loss Unit hired and to be launched within
this month
 SME product in development
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Our support for Brokers – exceptional and getting
stronger
Step 3: Investing in our Relationships
with Brokers
 Several events held with our Premier Brokers and
customers
 Joined up Business planning
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Significant Opportunities for Growth…
With a need to address them via multiple channels.
“In addition to Brokers or from a creditinsurer, who would you expect to buy Credit
Insurance from?”
The next ten years will herald a 'seismic
shift' in the UK's business landscape
unseen since the original industrial
revolution, finds a new report looking at
the future of UK firms.
The 2020 Vision study by Bibby Financial
Services foresees that wireless use of the
web, giving businesses the ability to be
truly mobile, will facilitate an upturn in the
number of small and medium-sized
businesses in the UK by 20% come 2020.
 “Banks – because they have an interest in business
succeeding”
 “The accountant, who has recommended
insurances, factoring”
 “I’m reasonably sure we’ve been offered this on a
cold call”
SOURCE: Smallbusiness.co.uk 10 October 2011.
Focus Group Research conducted 2011 on behalf of Euler Hermes
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Euler Hermes has launched a third Distribution
Channel – Bank
Part of a global
Euler Hermes
Roll-Out
A clear focus on
growing the market
for credit insurance
(New-New Business)
Adapted Rules of
Engagement for
EH in the UK
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Andy Chrascina
Head of Bank Distribution
48
Our Outlook for 2013:
A Challenging, Windy Economic Road
Increased Insolvencies, Increased Claims, Increased Pricing.
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Our Outlook for 2013:
And Opportunity for Growth...
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Agenda
1
Euler Hermes
in the UK
Gerard van Kaathoven
2
The Economic
Environment
Mark Wyatt
Premier Broker Event
© Copyright Euler Hermes 15-07-21
4
Your questions
Our answers
3
The Euler
Hermes
Commercial
Strategy
Lukas Neckermann
51
Thank you
for your attention
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15-07-21
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