AU Group is publishing its new Credit Insurance Market 2017. The overall size of the market has slightly decreased in 2016 (-3.4% compared to 2015), due to two main key facts: a strong competition between the insurers and a slowdown of the insured turnover. Last year, as global trade has been facing headwinds, the low sales activity of policyholders led to decreasing turnover trends for Coface and Euler Hermes. However, at constant scope and exchange rates, we note that Euler Hermes’ premium income remains stable, while Atradius, the only competitor showing growth, posted an increase in its premium income of 3.4% supported by its core markets. In terms of worldwide market shares: Euler Hermes remains the leader with 36.2%, followed by Atradius 26.0%, and Coface with 18.6% as of December 31st 2016.
In Emerging Markets, where claims have been concentrated (i.e. Asia, Gulf Countries, Turkey, Brazil), insurers have been adjusting their risk appetites and will continue to do so. In 2017, like the previous year, the unstable macro-economic environment and the rise of country risk, will continue to encourage protectionism and local instabilities and will influence corporates to protect their growth.
To boost this industry, credit insurers are launching new products and developing partnership with Fintechs. Looking ahead, “digitalisation” keeps on concentrating investments in the industry, aiming at bringing intelligence and automation to credit management and decision making processes.
Focusing on the profitability of the players, we note that for the 3rd year in a row Atradius has posted the best increase in profitability (+19% in 2016; +10.5% in 2015, +19% in 2014) with a profit of €212M. Coface’s net result has decreased from €127M in 2015 to €41.5M in 2016. The reasons are due to claims in Emerging Markets, as well as restructuring costs linked to the transformation plan “Fit to Win”. Euler Hermes profit at €287M remains the highest among the insurers, but slightly decreased compared to €303M in 2015.
Read the whole study on the Credit Insurance Market 2017 here.