BULGARIAN EXPORT INSURANCE AGENCY JSC. BULGARIAN EXPORT INSURANCE AGENCY JSC. Credit risk insurance...

BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.

Credit risk insurance at Credit risk insurance at BAEZBAEZ

What is credit risk insurance?

• The credit risks insurance is a specific insurance product

• Essence – insurance of receivables under trade deals

on the domestic market on the international market


INSURANCE OF RECEIVABLESINSURANCE OF RECEIVABLES((on the domestic and the international on the domestic and the international

marketmarket))

Risks covered

commercial risks (under domestic and international trade deals) – risks related to the buyer:

protracted default insolvency of the buyer

non-commercial (or political) risks – risks related to the buyer’s country:

war, strike, embargo, coup d'etat moratorium on payments confiscation and nationalization changes in the payment regime etc.


Credit risks insurance schemeCredit risks insurance scheme


Stages of the insurance processStages of the insurance process


Why to insureWhy to insure??

The receivables are an asset, which deserves protection

The insurance is an instrument for a business promotion

competitive advantage assessment of buyers prevention and monitoring financial stability guarantee easier access to financing

The insurance is an instrument for a business expansion

new partners new markets higher turnover

The insurance is part of the corporate strategy


Main functions of the Credit Risk InsuranceMain functions of the Credit Risk Insurance

loss prevention current and detailed financial information of the buyer credit limit recommendation for each buyer constant qualified credit control

loss reduction contract dependant on the risk situation of the insured assistance in overdue debts collection

payment of insurance indemnification in case the previous two did not work out


Disadvantages when providing credit termsDisadvantages when providing credit terms

BUYER – ADVANTAGES: receives credit terms no need to dispose of proper free funds at the moment of the delivery

SELLER - DISADVANTAGES: payment insecurity the deferred payment engages financial resources possible problems with the debt colelction


The risk nature is constantly changingThe risk nature is constantly changing

poor economic situation

changes in the market conditions

necessity of expansion new clients internationalization

insufficient working capital

difficulties in the financial sector


AVERAGE PAYMENT TERMS IN EUROPEAVERAGE PAYMENT TERMS IN EUROPEResearch of Research of Intrum JustitiaIntrum Justitia in 201 in 20133 – – European Payment IndexEuropean Payment Index 2013 2013

Country

Private sector Public sector

Contractual payment

(days)

Real payment

(days)

Contractual payment

(days)

Real payment

(days)

Austria 25 35 30 42

Finland 20 25 20 23

France 40 55 40 60

Germany 25 35 25 35

Sweden 30 35 30 32

United Kingdom 25 40 25 40

Portugal 50 85 80 135

Spain 60 85 80 155

Greece 35 55 50 155

Italy 65 95 80 170

And not to forget…And not to forget…

Credit risk insuranceCredit risk insurance = additional = additional financing securityfinancing security

Option 1: The insurance policy is transferred in favour of a third beneficiary

Option 2: The bank insures the credit


Option Option 1: 1: Insurance of receivables in favour of third Insurance of receivables in favour of third beneficiarybeneficiary


OptionOption 2: 2: Bank credit insuranceBank credit insurance


Who is BAEZWho is BAEZ?? “Bulgarian Export Insurance Agency” JSC. Is a specialized insurance company

Founded in 1998

Shareholder – 100% Republic of Bulgaria (Ministry of economy)

The Bulgarian analogue of well-known international export credit and investment insurers

Aim: to stimulate and support the Bulgarian exporters on the

international market to protect them from risks

Other insurance products: insurance of Bulgarian investments abroad L/C insurance bank guarantee insurance


Why BAEZWhy BAEZ??

created to stimulate and support exporters SMEs priority economic sectors

solid resources for insurance indemnifications

undertake higher risks, the profit is not major motive


BAEZ

businesscredit risks

You never knowYou never know......

... Your best partners could be seen on this slide...

………………

………


…because even the best professional need a safety net!


BULGARIAN EXPORT BULGARIAN EXPORT INSURANCE AGENCY JSC.INSURANCE AGENCY JSC.

Sofia 1301, 55 Alexander Stamboliiski Blvd.

Tel.: (+359 2) 923 69 11, fax: (+359 2) 987 06 65

е-mail: [email protected], www.baez.bg

The state guarantee The state guarantee for your businessfor your business

BULGARIAN EXPORT INSURANCE AGENCY JSC. BULGARIAN EXPORT INSURANCE AGENCY JSC. Credit risk insurance...

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