Credit insurer Atradius works at communication to avoid sectors past mistakes

In addition, they have in place a 30-day announcement period during which the old limit is still in force.

Commercial credit insurers provide cover to industrial and trading companies against the risk of suffering losses from customers not paying their bills due to insolvency.

In the aftermath of the Lehman collapse, credit insurers reduced their cover massively, much to the anger of industrial clients and of companies that had to cope with difficulties in obtaining supplies.

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Chemical giant Bayer even threatened to find captive solutions together with other industrial companies. “Credit insurers are giving up the original insurance business model”, Bayer risk manager Gregor Köhler said at the time.

Due to the controversy, the Berlin government introduced a new scheme under which the government guaranteed cover. Grudgingly, insurers—who originally said that the scheme was not needed—agreed to take over administration of the state scheme.

However, it was hardly used, and has meanwhile been dissolved. But the row left its mark on insurers. “We have changed our structure and are much more regional now,” said Atradius’ Mr Tesch. The company is the world’s number two commercial credit insurer, the market leader is Allianz group member Euler Hermes.

Atradius improved its after-tax profit in 2011 by 3.9% to €130m—despite a combined ratio of 85%, 11 percentage points worse than that of 2010.

“Reinsurance terms improved considerably,” Mr Tesch said, explaining the difference between the net profit trend and the combined ratio. “There is sufficient capacity, and we were able to get good terms at the 2011 and 2012 renewals.”

In addition, investment income had gone up, said Mr Tesch.

Atradius’ 2011 turnover from insurance went up €53m to €1.55bn. The company saw a worsening of its gross loss ratio from 38.6% to 49.7%, while the gross cost ratio stayed flat at 35.2% following 35.4%. The net loss ratio rose from 44.6% to 50.3%, while net costs improved from 39.3% to 34.2%—demonstrating the higher share of the total loss borne by reinsurers.

Andreas Tesch succeeded his close colleague Peter Ingenlath, who passed away in August 2011 aged 53. Mr Ingenlath died of a heart attack when jogging during his holidays. Mr Tesch is 42 and studied business administration at Cologne University. Later, he joined consultants Simon Kucher, from where he moved to Gerling Kredit, one of the roots of today’s Atradius.