Securing Trade through Credit Insurance in Asia

ISSUE #58 – Interview with Fabien Conderanne, CEO Singapore, Coface

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The Coface Group, a worldwide leader in credit insurance, offers companies around the globe solutions to protect them against the risk of financial default of their clients, both on the domestic market and for export.

In 2013, the Group, supported by its 4,440 staff, posted a consolidated turnover of €1.440 billion. Present directly or indirectly in 98 countries, it secures transactions of over 37,000 companies in more than 200 countries.

Each quarter, Coface publishes its assessments of country risk for 160 countries, based on its unique knowledge of companies’ payment behaviour and on the expertise of its 350 underwriters located close to clients and their debtors.

In France, Coface manages export public guarantees on behalf of the French State.

CAN YOU TELL US ABOUT YOUR CAREER AT COFACE?

Photo_FabienConderanneI started in the Finance Department of Coface Group in Paris in 2001 as a Financial Analyst. I was working as investors and rating agencies relation as well as mergers and acquisitions for our own account. In 2005, I was put in charge of the asset management team, looking after the investments of Coface at the group level. In 2009, I moved to Singapore to become the Asia Pacific Regional CFO.

I was appointed to my current role as Singapore CEO in October 2012. My role is to develop our business in Singapore for short-term credit insurance. I also head the underwriting desk for Structured Credit and Political Risk Insurance for Asia Pacific.

COULD YOU DESCRIBE COFACE’S STRATEGY IN ASIA?

Coface helps companies trade with their customers by securing payment of their trade receivables. Unpaid invoices is a major business risk for our clients as a default from one of their main customers can severely impact their own profitability and even lead to their own insolvency.

We support our clients by advising them on the quality of their corporate customers and protecting them against unpaid invoices. In case of default from their customer, they can claim the unpaid amount from us.

Unlike European markets where credit insurance is widely used to secure trade, most Asian countries are still relatively young markets for our product and many Asian businesses are not familiar with it. So our development relies on our ability to promote the credit insurance offer and demonstrate its benefit to new clients. One of the benefits of credit insurance is to enable our customer to access bank financing more easily as the credit insurance policy can be used as collateral for bank financing.

As you can see, there is still a lot to be done to grow the Asian market and it is quite exciting for me to contribute to this development.

Most Asian countries are still relatively young markets for our product

CAN YOU BRIEFLY EXPLAIN STRUCTURED TRADE AND POLITICAL RISK INSURANCE?

We generally cover the whole list of buyers for our clients, but we have also developed a Single Risk business line where we cover only one obligor. This cover can be extended for a much longer period (up to 10 years) and individual amounts under cover tend to be much larger.

We can also cover political risk, which essentially protects our clients against the actions of a foreign government such as expropriation of assets or implementation of capital controls.

This product is particularly well adapted for banks and commodity traders, and Coface is a major player in Asia. We have a dedicated team underwriting this product for the whole region, which I head in Singapore.

Although London remains the main underwriting centre for this product, Singapore is now established as a major hub as well.

HOW IMPORTANT IS SINGAPORE TO YOUR ORGANISATION?

Singapore plays a key role in our development for several reasons. First, many of our multi-national clients have a regional head office or a major invoicing centre in Singapore. It is crucial for us to be able to engage them out of Singapore.

Second, Singapore is a major financial centre in the region and we work with banks both as partners and as clients.

Finally, Singapore has become a regional hub for structured credit and political risk insurance. Specialised brokers and competitors such as Lloyd’s of London Asia have established their presence in Singapore, which allows for many networking opportunities and a very active cooperation between all players.

Singapore has become a regional hub for structured credit and political risk insurance

WHAT ARE THE CHALLENGES AND OPPORTUNITIES FOR COFACE IN ASIA?

There is currently a huge potential for growth in all our markets in Asia. Apart maybe from Japan and Australia, most other markets are still not mature and growing at fast rates.

Open account credit, such as 60-days credit terms offered by a supplier to its customer to settle its invoices, is going to continue to grow in Asia and this provides a fantastic opportunity for Coface.

The main challenge revolves around our ability to access the market either directly or through partners or brokers on one hand, and our capacity to attract, train, and retain local talent in our teams in the various countries.

AS A STRONG SUPPORTER OF THE FCCS, HOW WOULD YOU DESCRIBE THE ROLE IT SERVES TODAY FOR FRENCH COMPANIES IN SINGAPORE?

The FCCS plays a key role in helping smaller companies and entrepreneurs to establish their business in Singapore. For instance, it also provides great opportunities to network with your peers and exchange ideas. I believe many companies across industries are facing the same issues when it comes to talent retention or management of cultural differences.

WHAT IS YOUR MOTTO?

I quite like the motto from the Olympics: Citius, Altius, Fortius (Faster, Higher, Stronger), as it invites all of us to provide the best performance we can and to look for continuous improvement in what we do.

 

Interview published in the FOCUS Magazine “New Links in the Supply Chain” – September 2015

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