Euler Hermes, an international underwriter, prepares early for swings in global economic cycle

Excerpt from ICBA Advantage Issue 1

The credit and liquidity crisis is having a heavy impact on Fortune 500 companies and major international banks, and also affects companies in all sectors of the economy. Most companies are currently experiencing lower sales, lower margins and reduced cash flow. Buyers that were identified as higher risk when the economic cycle was high are now the most at risk of failure.

After experiencing the 2001/02 downturn, ICBA partner Euler Hermes prepared early for the 2008/09 downturn (chart taken from Euler Hermes Financial Analysts report, Paris, 28 July 2008, with permission)

After experiencing the 2001/02 downturn, ICBA partner Euler Hermes prepared early for the 2008/09 downturn (chart taken from Euler Hermes Financial Analysts report, Paris, 28 July 2008, with permission)

Euler Hermes works together with its customers to identify buyers with increased levels of risk. The underwriter collects financial information, again through close association with its policyholders, in order to better evaluate the ability of a buyer to weather the current economic crisis. It is in the interest of all parties – insurer, insured and buyer – to cooperate. With a stable credit insurance solution in place, buyers can access unsecured sources of credit, backed by Euler Hermes, and suppliers can obtain working capital within their bank lines of credit. A win-win situation for all involved.

(Excerpt from ICBA Advantage - The newsletter for trade credit insurance solutions - Issue 1. © 2008 International Credit Brokers Alliance (ICBA) www.icba-online.com. Company and product names are trademarks of their respective companies.)