Euler Hermes
Euler Hermes is a credit insurance company that offers a wide range of bonding, guarantees and collections services for the management of business-to-business trade receivables.
A subsidiary of Allianz SE, Euler Hermes is rated AA by Standard & Poor's. The Group posted a consolidated turnover of €2,7 billion in 2018. Euler Hermes employs +5,800 employees in over 50 countries and insured global business transactions for €962 billion in exposure at the end of 2018.
Activities of Euler Hermes
Credit Insurance
Bonding
Euler Hermes issues a varied range of bonds on behalf of its clients around the world.Debt Collection
Euler Hermes handles 380,000 debt collection files in more than 130 countries.Economic Research
Economic Research at Euler Hermes, is a department entirely dedicated to economic research. It analyzes economic and sector trends, country risks and corporate insolvencies worldwide. The Euler Hermes’ Chief Economist is Ludovic Subran.Economic Research publicly broadcasts through Euler Hermes’ website several publications sharing their latest views and forecasts on topics such as the new trends in international trade, emerging trade risks and business opportunities.
History
Euler Hermes provides guarantees or insurance on accounts receivable arising from the sales of commercial goods and services on credit terms of e.g. 30-day, 60-day time scales or more especially for export companies, sometimes on longer time scales; it manages guarantees for exports by corporations globally; and also provides other international support for exporters. It distributes its products and services through a network of direct agents, brokers, and banks and tracks companies in markets representing 92% of the world's GDP.Foundation
The Hermes Kreditversicherungsbank was founded by 2 men: Dr h.c Wilhelm KISSKALT and Dr. Emil HERZFELDER, on October 7, 1917, and was the first German credit insurance specialized company to be present in all the credit insurance areas: creditor, bond and fidelity insurance. Two months later, on December 18, 1917, Hermes was allowed by the German imperial supervisory authority for private insurance.Both believed that credit insurance services had to be offered independently from traditional insurance services, because credit insurance services brought answers to specific needs.
Dr. Emil HERZFELDER was the first member of Hermes’ Management Board.
On February 19, 1918, the company was registered in the Berlin trade registry.
In 1926, the German Ministry of Economy entered into an agreement for export credit insurances with Hermes and Frankfurter Allgemeinen Versicherungs-AG, also called the FAVAG. Both companies were supposed to issue credit insurance contracts for export transactions with private sector companies, with the German Reich acting as a reinsurer and assuming 100% of the political and catastrophic risk.
The historical background
1929 financial crisis & the FAVAG collapseThe financial crisis of 1929 had a deep impact on several credit insurances companies.
The FAVAG was part of it, and collapsed the same year, mainly due to the substantial losses from the acquisition of financial guarantees. This allowed Hermes to take over all of the export credit insurance contracts it had underwritten. FAVAG was, at this time, the second-largest composite insurance company behind Allianz and its collapse had far-reaching impacts on credit insurance in Germany.
WWII
Following the Depression years from 1929 to 1932, Hermes experienced a period of development with rising premium income and modest profits.
The insights into the causes of FAVAG's collapse also convinced the Reich's insurance supervisory authority that the significant risks inherent in the credit insurance business could threaten an insurer's ability to perform on its property and casualty insurance contracts. Starting in 1930, the supervisory authority therefore began to authorize only specialized companies with adequate minimum capital to offer credit insurance.
During WWII, the government assigned Hermes new missions. The company insured importers against the political risks arising from the war as well as other risks in the export business as guarantees of the German Reich.
This almost led Hermes to bankruptcy, but the military governments then intervened and ordered that no court could initiate a proceeding against an insurance company of the claims involved contracts reinsured by the German Reich and claims losses resulting from the war.
Birth of Euler Hermes
Euler Hermes is therefore the result of different evolutions the SFAC and Hermes knew during the 20th century. Euler Hermes then decided to, first of all, develop on an international level and, secondly, to simplify the group's structure.2004 : A strong international development
From 2004, Euler Hermes begins an international expansion phase, and settled in Asia, Middle East and Latin America. The World Agency, which is Euler Hermes’ solution for multinational companies is created at that moment. In 2013, Solunion, a joint venture between Euler Hermes & MAPFRE, is made in Spain and Latin America. Euler Hermes also increased interest equity in ICIC to 50% this year.
2010-2012 : Group structure simplification movement
3 projects were launched during this period:
- One Euler Hermes: simplification of the Group's structures and clarification of its governance.
- Excellence: Increase in productivity and flexibility of the cost base through worldwide streamlining of operations.
- Blue Europe: merging within the legal entity Euler Hermes Europe SA of 12 insurance branches
Global network
The Group is present throughout the world via insurance companies, service companies and/or branches. Euler Hermes has a database with proprietary information on more than 40 million companies worldwide, and provides coverage on shipments to 200 countries around the globe.
Americas
This region includes all the direct insurance and reinsurance activities carried out in the United States, Brazil and Canada, as well as related collection revenues.Asia & Pacific
This region has all the direct insurance and reinsurance activities realized by subsidiaries based in Asia.Europe
France
In 1927, Société Française d’Assurance Crédit is founded by diver's large insurance societies, including Assurances Générales. Euler Hermes is born from the merge between SFAC and Hermes in Germany.Germany - Austria - Switzerland
This region combines the direct insurance and assumed business realized by the German enterprises in Germany, Switzerland and Austria.Mediterranean countries, Middle East & Africa
This region includes the direct insurance and assumed business in Italy, Greece, Morocco, Turkey, Tunisia, the Gulf Countries and South Africa. Since 2013, the region does not cover the activity of Spain as the entity was given up to Solunion, the joint enterprise with MAPFRE.Northern Europe
This region combines direct insurance and assumed business in Northern European countries and in Eastern Europe.Joint Ventures
Solunion
In 2013 Euler Hermes and MAPFRE launched Solunion to provide trade credit insurance solutions in Latin America and Spain. In January 2017, Solunion began to operate in the Dominican Republic.ICIC
The Israeli Credit Insurance Company is the leading credit insurer in Israel. Credit insurer Euler Hermes has raised its stake in Israeli counterpart ICIC to 50%, from 33% in 2007.COSEC
COSEC is the leading Insurer in Portugal for credit and insurance. The Portuguese commercial bank BPI and Euler Hermes share COSEC into equal parts.CPPIC EULER HERMES
In 2017, Euler Hermes and China Pacific Property Insurance Company have launched a distribution joint venture in Asia. The joint venture will be headquartered in Shanghai.Shareholding structure
Following the completion of the simplified tender offer opened from April 9 to April 20, 2018, Allianz reached 94.91 percent of the share capital and theoretical voting rights of Euler Hermes. The legal conditions were met on April 27 and Allianz implemented a squeeze-out on the remaining shares of Euler Hermes it did not hold yet, followed by the delisting from Euronext Paris on the very same day.Financial information
Board of management
- Wilfried Verstraete, President and Chairman of the Board of Management. In charge of coordinating the work of the members of the board of management, steering and coordinating the activities of all the group's companies, and representing the company towards third parties. He also supervises the group's internal audit, human resources and communication functions.
- Frédéric Bizière, Member of Board of Management in charge of Risk, Information, Claims, Collections and Reinsurance.
- Loeiz Limon-Duparcmeur, Group Chief Financial Officer - Group CFO - Member of Board of Management in charge of Finance and Tax.
- Virginie Fauvel, Chief Transformation Officer - Member of Board of Management and Head of Americas Region.
- Michele Pignotti, Member of Board of Management in charge of Market Management, Commercial and Distribution
- Michael Eitelwein, Group Chief Operating Officer - Member of Board of Management in charge of Operations and IT.