Toronto, ON
– Brad Hébert, the newly appointed
Chairman of the Receivables Insurance Association of Canada,
believes the association’s first year of operations laid a successful
foundation. Now the association intends to expand membership, increase
brand recognition, continue liaison with the Office of the
Superintendent of Financial Institutions, and introduce more value-added
member networking and professional development opportunities.
The Receivables Insurance Association of Canada promotes the business
opportunity for receivables insurance – also known as trade credit
insurance – to Canadian
insurance brokers, the
banking industry and
businesses engaged in domestic trade and exporting.
Hébert, who is also Vice President – Trade Credit, of AIG Insurance
Company of Canada, said the receivables insurance industry has
single-digit market penetration among Canadian businesses and premiums
across the country experienced a modest year-over-year increase of 2.7%
in the first quarter of 2014, according to data from the Office of the
Superintendent of Financial Institutions.
Yet the
International Chamber of Commerce (ICC)
Trade Register Report 2014 provides
empirical evidence that, in all forms, trade and export finance is a
low risk bank financing technique. Based on data contributed by the
major global commercial banks and reflecting more than 4.5 million
transactions totaling an exposure in excess of US$2.4 trillion, the
ICC Trade Register Report 2014 (“the
Trade Register”) empirically demonstrates that trade finance is lower
risk than many other types of financing and assets. It records that
short-term trade finance customer default rates range from a low of
0.033% to a high of 0.241%, which is a fraction of the 1.38% default
rate reported by Moody’s for all corporate products (according to 2012
figures).
“These important findings from ICC motivate our association work with
brokers, bankers and businesses to transform the vastly under-insured
state of corporate receivables in Canada. The lack of receivables
insurance introduces undue risk on working capital loans, inhibits the
amount that can be loaned, and also forces higher interest rates on
business clients that artificially restrict sales growth,” said Hébert.
In much the same way mortgage insurance is designed to protect the
bank in the event of a foreclosure, receivables insurance protects
businesses from buyers — in Canada or abroad — that are unable to
fulfill their invoice payment obligations.
Such unforeseen trade disruptions can include buyer insolvency,
protracted default – a failure to meet obligations on time due to
inadequate cash flow, or political disruptions that lead to a loss on
current receivables.
“Last year we launched the Receivables Insurance Association of
Canada with most of Canada’s major receivables insurance underwriters,
several brokers, as well as a major bank,” said Mark Attley, the
association’s President. “Our stated goal was and is to grow a $200
million market to a goal of $350 million within five years. All our
founding members remain with us into our second year, and I’m pleased to
say we also welcomed new members from right across Canada including
Gerald Shtull & Associates, Dan Lawrie Insurance Brokers Ltd. and
several individuals from trade credit and political risk companies.”
Attley pointed out that individual association memberships now start at
an affordable $200 per person.
In its second year, the Receivables Insurance Association of Canada
is undertaking the following initiatives to bring even more value and
networking opportunity to its members:
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Grow membership along four industry and individual tiers and seek
member knowledge contributions in the form of white papers, webinars and
professional education/upgrading programs.
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Introduce an annual learning conference in Canada’s financial centre
of Toronto that invites top economists to discuss issues affecting trade
credit, political risk, exporting and the role of receivables
insurance.
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Encourage working committees in banking and finance, marketing,
governance and membership to be proactive within the broader Canadian
economy.
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Continue working with the Office of the Superintendent of Financial
Institutions (OSFI) that now allows banks to introduce the concept of
receivables insurance to clients and direct business borrowers to www.receivablesinsurancecanada.com for more information.
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Build on public relations and public speaking initiatives that last
year resulted in 47 media stories in insurance industry and general
business publications and blogs both across Canada and around the world.
Hébert also stated that he is pleased to be working with a stellar
association executive team including Mark Attley in his second year in
the role of President; Christopher Short, in the role of Vice President;
Mike O’Brien in the role of Secretary Treasurer and Ian Miller as Chair
of Governance. Short, O’Brien and Miller are also respectively senior
receivables insurance executives with Coface, Euler Hermes Canada, and
Atradius Credit Insurance N.V.
About the Receivables Insurance Association of Canada
The Receivables Insurance Association of Canada promotes the business
opportunity for receivables insurance – also known as trade credit
insurance – to Canadian
insurance brokers, the
banking industry and
businesses
engaged in domestic trade and exporting. The association also works to
advance industry innovation and product integrity, solve any business
problems related to government legislation, and represent the interests
of its members by facilitating an open exchange of information and
ideas. Founding members of the Receivables Insurance Association of
Canada include AIG Insurance Company of Canada, AON, Atradius Credit
Insurance N.V., Coface, Euler Hermes Canada, Export Development Canada,
Guarantee Company of North America, Marsh Canada Ltd., Millennium
CreditRisk Management Ltd., and Red Rock Insurance Services Ltd. New
members within the last year include Gerald Shtull & Associates, Dan
Lawrie Insurance Brokers Ltd. and several individuals from brokerages
and professional services firms across Canada.
Receivables Insurance Association of Canada Contacts
Phone: +1 416-596-3013
Brad Hébert, Chairman
Email:
brad.hebert@aig.com
Mark Attley, President
Phone: +1 613-794-6683
Email:
mark.attley@receivablesinsurancecanada.com
Paul Brent, Senior Communications Strategist, market2world communications inc.
Phone: +1 613-256-3939
Email:
paul@market2world.com
