bulgarian export insurance agency jsc. bulgarian export insurance agency jsc. credit risk insurance...
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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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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.
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
Credit risks insurance schemeCredit risks insurance scheme
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
Stages of the insurance processStages of the insurance process
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
Option Option 1: 1: Insurance of receivables in favour of third Insurance of receivables in favour of third beneficiarybeneficiary
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
OptionOption 2: 2: Bank credit insuranceBank credit insurance
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
BAEZ
businesscredit risks
You never knowYou never know......
... Your best partners could be seen on this slide...
………………
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BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
…because even the best professional need a safety net!
BULGARIAN EXPORT INSURANCE AGENCY JSC.BULGARIAN EXPORT INSURANCE AGENCY JSC.
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