Euler Hermes

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Euler Hermes
Société Anonyme (EuronextELE.PA)
Founded 2002 Euler Hermes
1917 Hermes
1893 ACI
Headquarters Tour First 1, place des Saisons - 92048 La Défense Paris, France
Key people
Axel Theis, chairman of Euler Hermes Supervisory Board (since May 25th, 2015); Wilfried Verstraete, chairman of Euler Hermes Board of Management (since April, 2010)
Products Credit insurance, Reinsurance, Trade debt collection, Bonding
Revenue € 2,638.4 million (2015) [1]
€ 417.8 million (2015)[1]
€ 302.5 million (2015) [1]
Total assets € 6,567.5 million (2015)[1]
Total equity € 2,715.4 million (2015)[1]
Number of employees
+6400 (2015)[2]
Parent Allianz
Divisions Euler Hermes Americas; Euler Hermes Asia-Pacific; Euler Hermes Germany-Austria-Switzerland; Euler Hermes France; Euler Hermes Mediaterranean countries, Solunion
Website http://www.eulerhermes.com

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 listed on ELE.PA and is rated AA- by Standard & Poor's.[3] The Group posted a consolidated turnover of €2.638 billion in 2015.[2] Euler Hermes employs +6,400 employees in over 50 countries and insured global business transactions for €890 billion in exposure at the end of 2015.[2]

History[edit]

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 (as an alternative to making the foreign purchaser obtain a letter of credit), 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.[4]

Foundation[edit]

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.

The missions[edit]

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[edit]

1929 financial crisis & the FAVAG collapse

The financial crisis of 1929 (i.e “Black Thursday”) 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[edit]

Euler Hermes is therefore the result of different evolutions the SFAC and Hermes knew during the 20th century. The group lays on both companies’ experience & expertise, and also on the different breakthrough they developed through the time (technology, management…). 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 (Emirates, Kuwait, Sultanat of Oman, Qatar) 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 (the Israeli credit insurance specialist) 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 from Czech Republic, Denmark, Finland, Hungary, Ireland, Italy, Netherlands, Norway, Romania, Slovakia, Sweden, United Kingdom)

Global network[edit]

The company has 54 subsidiaries throughout Europe, in France, Italy, Belgium, United Kingdom but also in the United States and Canada, including regional service hubs in New York City, Chicago, Atlanta, Los Angeles, Houston, Toronto and Montreal.

Euler Hermes covers global risk management on six continents, with risk and information specialists located in 54 countries. 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.

Shareholding structure[edit]

During 2014, the number of Euler Hermes Group shares held by Allianz Vie and Allianz France was unchanged at 30,744,048. This represents a stake of 67.8% in Euler Hermes Group share capital and 69.9% of voting rights as at December 31, 2014. The free float covered 29.2% of Euler Hermes Group share capital, and 30.1% of voting rights. Euler Hermes Group holds 1,360,137 treasury shares representing 3% of its share capital.[5]

Financial information[edit]

(in €thousand) 2009 2010 2011 IAS 19 proforma 2012 IAS 19 proforma 2013 2014 2015
Revenue 2,085,711 2,147,734 2,274,922 2,397,896 2,486,240 2,527,012 2,638.4
Operating income 74,771 388,930 466,373 431,835 458,606 413,125 417.8
Net income 18,988 294,452 332,193 305,500 313,729 302,060 302.5
Net combined ratio 104.7% 68.7% 69.8% 74.6% 75.3% 75.4% 80.1%
Total Equity 1,795,779 2,130,421 2,218,349 2,345,241 2,461,870 2,580,525 2,715.4

Board of management[edit]

  • Wilfried Verstraete, Chairman. 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 the Board of Management in charge of Risks, Information and Claims functions and Reinsurance.
  • Clarisse Kopff, Group Chief Financial Officer and Member of the Board of Management in charge of Group Asset Management, Compliance, Finance, Legal, M&A, Tax and Risk and Capital Management.
  • Paul Overeem, Member of the Board of Management in charge of Market Management, Commercial and Distribution.
  • Michele Pignotti, Member of the Board of Management in charge of market management
  • Ludovic Sénécaut, Group Chief Operating Officer responsible for operations and IT services.

Supervisory board[edit]

  • Axel Theis, Chairman, Member of the Allianz SE Board of Management responsible for the global insurance lines and the regions UK, Ireland and Australia.
  • Brigitte Bovermann, Vice-Chairwoman and Member of the Nomination and Remuneration Committee and of the Audit and Risk Committee. Head of Business Division « Global Insurance Lines & Anglo Markets » of Allianz SE
  • Ümit Boyner, Independent Member, Executive Board member at Boyner Holding A.S
  • Philippe Carli, Independent Member and Chairman of the Audit and Risk Committee, General Manager Groupe Amaury
  • Elisabeth Corley, Member, Chief Executive Officer of Allianz Global Investors
  • Nicolas Dufourcq, Independent Member, Chief Executive Officer of Banque Publique d'Investissement (BPI)
  • Ramon Fernandez, Independant Member, Chief Executive Officer Delegate in charge of Group Finance and strategy at Orange since September 2014
  • Maria Garana, Independent Member, President and Chief Executive Officer of Microsoft Iberica
  • Marita Kraemer, Member of the Supervisory Board and the chairwoman of the Risk committee of Unicredit Bank AG Germany, Munich.
  • Thomas-Bernd Quaas, Independent Member and Chairman of the Nomination and Remuneration Committee, Member of the Supervisory Board of Beiersdorf
  • Jacques Richier, Member, CEO of Allianz France

Corporate social responsibility[edit]

According to its website, Euler Hermes consolidated the initiatives taken by its entities worldwide around a single Corporate Social Responsibility based on four key areas of commitment.

  • Health & Well-being (support to organizations and projects working in the areas of health, social development and the fight against poverty and hunger)
  • Financial literacy (employee volunteering to share financial expertise during educational programs)
  • Environmental protection (actions to reduce the environmental impacts of the Group’s sites (energy, water and paper production, waste production, etc.…)
  • Equality & Diversity (combating discrimination and encouraging the career development of women within the company)

References[edit]

  1. ^ a b c d e "Press release : Euler Hermes finishes 2014 with good results" (PDF). Eulerhermes.com. Retrieved 2015-12-29. 
  2. ^ a b c "Euler Hermes : 2015 Registration Document" (PDF). Allianz.com. Retrieved 2015-12-29. 
  3. ^ "RatingsDirect : Research Update : Euler Hermes Group Core Subsidiaries Affirmed At 'AA-' On Improved Enterprise Risk Management; Outlook Stable" (PDF). Eulerhermes.com. Retrieved 2015-12-29. 
  4. ^ "Euler Hermes : 2013 Registration Document" (PDF). Allianz.com. Retrieved 2015-12-29. 
  5. ^ "2014 Registration Document" (PDF). Eulerhermes.com. Retrieved 2015-12-29. 

External links[edit]