Amsterdam, 12 March 2012
- Profit after tax rose 3.9% to EUR 129.8 million from EUR 124.9 million in 2010
- Insurance revenues increased 3.8% to EUR 1,504.6 million from EUR 1,449.7 million in 2010
- Gross combined ratio of 84.9% compared to 74.0% in 2010
- Shareholders’ equity grew 9.2% to EUR 1,130.1 million from 1,035.2 million in 2010
- Return on average shareholders’equity of 12.0%
This result reflects Atradius’ continued focus on customer service coupled with the general improvement in the global economy in the first half of the year. This has enabled Atradius customers to expand trade and increase sales, contributing to growth in the Group’s credit insurance operation across most regions.
Atradius’ Special Products unit, which as part of the Credit Insurance unit offers solutions other than standard whole turnover insurance, saw significant credit insurance revenue growth of 17%, to EUR 34.9 million.
Atradius’ bonding service, offered in Italy, France, Spain and the Nordic countries, reported insurance revenue of EUR 84.5 million, with written premium – an indicator of revenue for future years – up by 12.1%.
Isidoro Unda, Atradius’ Chairman and CEO, commented: “Despite the worsening economic trend in the second half of the year, notably the financial turmoil in the Eurozone, Atradius’ unique quality proposition enabled us to expand cover maintaining profitability while protecting our clients from the trading risks they may have encountered.”
Claims under control despite growing default risks - operating costs remain low
Expert risk underwriting, which contributed significantly to the 2011 result, enabled Atradius to continue to guide its customers away from credit sales to buyers representing high payment default risks and towards profitable trade.
The Atradius net claims ratio increased to 50.3% in 2011 compared to 44.6% in 2010. This increase is consistent with the growth in premiums (total potential exposure rose by 6.9% in 2011) and the weakening risk environment in the second half of the year.
Insurance operating costs were kept on a tight rein (up by just 3.2% – lower than the 3.8% increase in insurance revenue), while the reinsurance result improved to a net expense of EUR 92.6 million in 2011 compared to EUR 244.1 million in 2010.
Atradius’ service income, most of which (73%) is derived from its debt collection operations, was 6.1% lower as a result of the modest level of insured claims in 2011. However, this was offset somewhat by a 6.0% increase in revenue from non-insured debt collection.
The Atradius investment result rose 37.1% in 2011 – to EUR 31.1 million from EUR 22.7 million in 2010 – despite persistent low interest rates. This was in line with the company’s investment strategy which is focused on capital preservation.
Atradius’ ‘Roadmap to Success’
At the beginning of 2011, Atradius introduced a new organisational model with the aim of driving further customer service improvements and operational efficiencies by delegating more executive powers to its regional teams across the globe. This initiative has empowered local staff who are close to the customer to ensure agents, brokers and customers receive high quality attention from Atradius by allowing products and services to be better aligned to the specific needs of different markets. The positive outcome can be seen in the high customer retention rate that Atradius has achieved throughout the year.
New products and alliances support customers’ aspirations
While Atradius is widely acknowledged to be a market leader in its services to large multinational corporations, its remit is to support businesses of all sizes. Thus, in 2011 it introduced ‘Modula First’: an innovative credit insurance product designed for small and medium-sized enterprises (SMEs). While this product offers the comprehensive coverage typical of other Atradius insurance policies, its pricing and administration is greatly simplified, making it an attractive proposition to both SMEs and Atradius’ distribution partners.
With a stated purpose of supporting clients in the regions in which they wish to trade, Atradius has a strong focus on the emerging markets of Asia that continue to grow in economic importance. Through its pan-Asian cooperation partnership with Tokio Marine Asia Pte Ltd, Atradius has further expanded its already extensive ability to offer credit management services throughout Asia.
The outlook for 2012 – increased demand for Atradius’ services
In announcing Atradius’ results, Isidoro Unda concluded: “Despite the persistent economic and political turmoil that characterised 2011, our clients have been able to benefit from their partnership with Atradius and the confidence we give them to trade safely. I am convinced that the value of our services will increase further, with little if any sign of a let-up in economic uncertainties. Customer service has always been our focus. The added impetus that has been given to this through our strengthened organisational model will continue to grow in 2012 and beyond.”
The Atradius Group, a company of Grupo Catalana Occidente S.A., protects businesses against trade credit risks throughout the world with credit insurance, bonding, and collections services offered in 45 countries. Its products and services are designed to help reduce customers’ exposure to buyers who are unable to pay for the products and services that they buy. With total revenue of EUR 1,554 million and a market share of approximately 31% of the global trade credit insurance market, Atradius’ products contribute to the growth of companies throughout the world by protecting them from the payment risks associated with selling products and services on credit. With 160 offices, Atradius has access to credit information on more than 100 million companies worldwide and makes around twenty thousand trade credit limit decisions daily.