The DNA of Atradius
Annual Report 2018 Atradius N.V.

This is Atradius

Building success comes naturally

Operating globally, we support national andinternational trade through our credit insurance,
surety and debt collection services.

Total Revenue

In EUR million

2018

1,898
1,837

2017
2016

Success in this field means balancing a constantcommitment to excellent customer service withan enthusiasm for exploring new trends andtechnologies. For us, every innovation must be
focused on building and protecting the business
relationships we value.

1,761

2015

1,718

2014

1,627

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

In EUR million

2018

22
25

2017
23

2016
2015

36

2014

38
0

5

10

15

20

25

30

35

40

Claims Ratio

Our 2018 performance at a glance

2018

Continuous group-wide growth and profitability•	Insurance premium revenue increased by 3.8%
(5.3% at constant foreign exchange rates) as
Atradius continued to grow its portfolio andexpand its global footprint.

2017

41.7%

2016

41.6%

2015

43.5%

•	The result for the year grew to EUR 202.7 million,
an 8.8% increase from 2017.

25%

30%

35%

40%

2016relationships
Our ability to build strong customer
is in our nature. It even helps shape
2015the services we
2014
provide. This is why we invest heavily in forging
5
10
mutually beneficial partnerships - not0 only withcustomers, but also with agents, brokers, information
providers, insurance partners, reinsurers
andClaimsRatio
collections networks.

45%

20%

50%

Expense Ratio

36%

35.5%

36.4%

2014

37%

36.6%
35%

38%

36%

37%

38%

Result For The YearIn EUR million

In EUR million

2018

203

2017

203
186

186

2016

2016

212

212
178

178

2014

2014

161
0

50

100

150

200

250

161
0

50

100

Our customers keep coming back, and ourbusiness continues to grow.
2

50%

37.1%

36.6%

Result For The Year•	Our shareholder’s equity grew 3.9%.

45%

37.1%

35%

2015

40%

35.7%

2014

•	The combined ratio ended at 79.2%.

35%

2016

36.4%

2015

2018

30%

35.7%

2016

•	The expense ratio for the year decreased to 35.5%
reflecting Atradius’ commitment to efficiency.

25%

2018

35.5%

2017

•	Atradius achieved a solid 43.7% claims ratio,
paying out over EUR 834 million in claims tocustomers while consistently supporting them in achallenging risk environment.

Bring all this together and you can43.7%
see how, byincreasing the value of the services
we provide, we
41.7%
41.6%
help our customers expand, innovateand grow their
43.5%
businesses. Their success stories arewhat Atradius is40.7%
built upon. It’s in our DNA.

Expense Ratio

2018•	Our prudent investment portfolio contributed EUR
22.1 million, in a difficult environment with low ornegative interest rates and volatile equity markets.

23 deeper relationships, means
Of course, developing
36 acrossbeing ‘present’. We are in over 50 countries
six continents. Wherever we do business, we38are
15
20
25
30
35
40
attunedto thelocal cultural,political,
regulatory
andeconomic nuances of the markets our customers
trade in.

As our customers’ businesses grow and the world
they’re trading in evolves, the demands
on our2016
business increase too. That’s why we continue to find2014
new and better ways to help customers
manage the

40.7%

20%

1,718

We are continually evolving
to provide customers and
1,627
We do this by understanding each customer’s
partners
the vital
information
1,000
1,100
1,200
1,300
1,400 with
1,500
1,600 tools,
1,700 technology,
1,800
1,900
2,000
business, and by getting to know the people behindand services they need to manage risk. For example,
it and their goals. With this knowledge we are able tosimplifying and streamlining everyday tasks like
In EUR million
Net Investment
Resultdeliver first-class insurance cover, trusted
intelligencecredit limit applications and claims submissions. Thisand business insight, and services that are tailored toallows our customers
to focus on activities that add
222018
suit each customer’s needs.
value
to
their
business.
2017
25

2018

43.7%

2014

milliontrade credit risks inherent in business. InAtEURthesametime, we are keeping up with the challenges of digital
1,898
transformation in what is an increasingly
fast-paced
1,837
and interconnected world.
1,761

2014

Net Investment Result

We know this approach works: our customers keep
coming back, and our business continues to grow.
Organisations of all shapes and sizes appreciate therange of benefits of working with us – we do much
more than pay claims and recover debts. With us, ourcustomers receive extensive support and guidance,
as we help them avoid risks and seize opportunities.

Total Revenue
At Atradius, we strengthen our customers’
creditmanagement, allowing businesses around the world
2018
to trade confidently and competitively. No matter
how complex a transaction is, where
2016 in the world it is,or with whom, we want to help make it a success.

3

150

200

250

The global economic
environment in 2018
Our understanding of the global economy iscentral to helping our customers’ businesses grow.

Upholding our values whileembracing change

Borrowing in the Eurozone continued to recover,with banks relaxing their credit conditions. Lending
remained lower in Southern Europe, as banks copedwith continuing weak balance sheets and high levels of
non-performing loans.

The global economy kept up the pace in 2018, withboth emerging and advanced economies growing
at roughly the same rate as in 2017. GDP growth
remained at 3.0% and is expected to reduce slightly
to 2.7% in 2019.

In the US, GDP growth accelerated to 2.9%. Private
consumption, which accounts for more than twothirds of the US economy, remained strong. Labour
market conditions continued to improve, with the
unemployment rate reaching 3.9% in December 2018.

Eurozone growth was reasonable at 1.9%, mainly
driven by domestic demand. Employment
rates strengthened further, wages rose, and theunemployment rate fell to 7.9% in November 2018,
compared to 8.6% at the start of the year. Although
all member states’ economies grew, Eurozone
growth continued to be distributed unevenly.
Southern European states lagged behind, but Spain
and Portugal performed much better than Italy
and Greece.

Emerging market economies maintained growth,
supported by solid global demand, relatively
loose financial conditions, improving domestic
policymaking in some markets, and higher commodity
prices. In China, which has begun feeling the painof the trade war with the US, GDP growth slowed to
6.6%. India was still going strong, with GDP growth of
7.4%. Latin American growth slowed, with Argentina
suffering an economic crisis and Brazil facing atruckers’ strike and uncertainty ahead of generalelections. Eastern Europe enjoyed stable expansionof 3.1%, but individual country growth rates varied.
Russian growth increased slightly, while the Turkish
economy cooled from high credit-fuelled GDP growthin 2017.
For commodity-exporting countries, 2018 was amoderate year. Oil prices were volatile, and prices ofcommodities such as steel, aluminium and copper
were lower.
Global insolvencies continued to decline. The biggest
improvements were in Eurozone countries with strong
economic growth, like the Netherlands and Ireland,
and in those recovering from high insolvency levels,
such as Spain and Portugal. However, levels remained
high in many Eurozone countries.
Insolvencies declined in the US, but increased in the
UK following construction sector difficulties andweakening consumer purchasing power. Most otheradvanced markets saw stable or declining insolvencies.
In Russia and India, economic growth is expected
to lead to declining insolvencies. However, in China,
corporate bankruptcies have increased, and South
Africa entered a recession, leading to a rise in
insolvencies.

4

Producing impressive financial results in all areasof our business, 2018 was another successful year
for Atradius.

– the world’s first online trading platform for thepharmaceuticals, veterinary food and feed sectors – togive customers direct access to our services.

Our excellent results are due to our approach to themarket and to our values: to provide high-quality
service by working closely with our customers. While
the world around us changes, our values do not,which is what makes us such a reliable partner.

Connectivity is another important trend. This year
we invested in new underlying API technology
to upgrade our connectivity capabilities for core
processes (such as limits, rating and claims). We will
make these available to customers and partners, sothey can easily connect and automate processes anddata flows. We are also integrating our products andservices with trading, credit management, financing
and Enterprise Resource Planning (ERP) platforms.
Our customer portal ‘Atrium’ won the Insurance
Technology Award in Hong Kong, and we launched
the Atradius Collections platform (Agora), which lets
customers purchase collections services and receive
payments online.

The fast-evolving landscape brings opportunities andthreats, and the strategic focus we initiated in 2018
addresses both. It aims to transform and future-proof
our business, and support our customers and partners
in new and exciting ways.
The Big Data trend offers opportunities to makeour business smarter and more efficient. We are
exploring how to use new analytical techniques
to enhance our underwriting and lead-generation
activities. In 2018, this included a ground-breaking
pilot using the IBM Watson tool to read massive
volumes of unstructured financial information andalert underwriters to negative developments.

Our Insurance Financial Strength Rating was
upgraded to ‘A2’ (outlook stable) by Moody’s.
Our Long-Term Issuer Credit Ratings from A.M.
Best have also been upgraded from ‘a’ to ‘a+’with a stable outlook. These upgrades reflect ourstrong consolidated balance sheet and operating
performance, favourable business profile andappropriate enterprise risk management.

We are also tapping into the new digital tradeeconomy to create new ways of working with ourcustomers. In 2018, we began working with Kemiex5Serving you around the world
EuropeAustria
Belgium
Bulgaria
Czech Republic
Denmark
FinlandFranceGermany

ViennaNamur, Antwerp
Sofia
PragueCopenhagen, Århus
Helsinki
Paris, Bordeaux, Compiègne, Lille, Lyon, Marseille,
Rennes, Strasbourg

GreeceHungary
Iceland
Ireland
Italy
Luxembourg
Netherlands
NorwayPolandPortugal
Romania
RussiaSlovakia
Spain

Cologne, Berlin, Bielefeld, Bremen, Dortmund,Düsseldorf, Frankfurt, Freiburg, Hamburg, Hanover,
Kassel, Munich, Nuremberg, Stuttgart
Athens
Budapest
Reykjavik (1)DublinRome, Milan
Luxembourg
Amsterdam, Ommen
Oslo
Warsaw, Krakow, Poznan, Jelena Gora
Lisbon, Porto
Bucharest
Moscow
Bratislava
Madrid, Alcalá de Henares, Alicante, Barcelona, Bilbao,
A Coruña, Castellón, Girona, Las Palmas de Gran
Canaria, Málaga, Murcia, Oviedo, Pamplona, Seville,
Tarragona, Terrassa, Valencia, Valladolid, Zaragoza

SwedenSwitzerland
TurkeyUnited Kingdom

Stockholm
ZurichIstanbul
Cardiff, Belfast, Birmingham, London, Manchester

Middle East
IsraelLebanonSaudi Arabia
United ArabEmirates

Americas
Argentina
BrazilCanadaChile
MexicoPeru

Tel Aviv (1)Beirut (1)Riyadh (1)Dubai (1)Asia
China	Beijing, Guanzhou, Nanjing,
Shanghai (2)Hong Kong
Hong Kong
India
Mumbai, New Delhi, Kolkata (2)Indonesia
Jakarta (2)
Japan
Tokyo
Malaysia
Kuala Lumpur (1)Philippines
Manila (1)Singapore
Singapore
South Korea
Seoul (2)TaiwanTaipei (1)Thailand
Bangkok (2)VietnamHanoi (1)

Buenos Aires (1)São Paulo
Almonte (Ottawa), Mississauga (Toronto),
Pointe Claire (Montreal)
Santiago de Chile (1)Mexico City, Guadalajara, Monterrey
Lima (1)USA	
Baltimore (Maryland), Carmel (Indiana),
Chicago (Illinois), Los Angeles (California),
Morristown (New Jersey),
New York (New York), Plano (Texas)

6

AfricaKenya
South Africa
Tunisia

Nairobi (1)Johannesburg (1)Tunis (1)Oceania
Australia	Sydney, Brisbane, Melbourne, Perth
New Zealand
Auckland7(1)

 ssociated company, minority interest orA
co-operation agreement with local partner(2)

 ervice establishment and co-operation
Sagreement with local partner

Our products and services –flexibility and quality built in
Risk protection for instalment-based
credit agreements

Our credit insurance products offer more than justprotection against losses arising from non-payment forgoods sold on credit. With each policy, our customers
receive comprehensive support, from dedicated accountmanagers and innovative online tools.

Atradius Instalment Credit Protection (ICP) covers
short-term and medium-term risks involved ininstalment-based credit agreements with private
individuals and businesses. It serves financial andcorporate policyholders in Belgium and Luxembourg,
covering mainly consumer credit, leasing andrenting risks.

As a day-to-day contact, each customer has an accountmanager to help them get the most from their policies.
Hundreds of experienced underwriters aroundthe world carry out our credit limit underwriting,assessing the risk of our customers’ buyers, and setting
safe trading limits. Our online tools provide additional
credit-management support services.

Professional and reliable debt
collections

A concept called ‘Modula’ is behind our credit
insurance products. This is a worldwide catalogue ofmodules (or policy conditions) we can combine to meeteach customer’s needs. It helps us tailor every policy,
with no superfluous terms.

With worldwide expertise, and staff in 30 countries,
Atradius Collections helps businesses - both insured
and uninsured - collect domestic and international
trade debts, while maintaining sound relationships
with their clients. With a strong reputation as abusiness-to-business specialist, it combines thestrength of Atradius Credit Insurance with its own
network of collectors, lawyers and insolvency
practitioners, in addition to its online capabilities.

We offer credit insurance for all sizes of business.
For multinationals, Atradius Global has developed
an excellent understanding of their specific needs.
Whether their credit management is centralised
or local, our Global policy meets these needs. For
medium-size and large local companies, we can adapt
our cover to fit all kinds of businesses, in any sector,
doing business domestically or internationally. And
for SMEs, we offer products packaged to be easy tounderstand and use.

Working with the Dutch state
Atradius Dutch State Business (ADSB) is the export
credit agency of the Netherlands. Its insurance andguarantee products help minimise the risks of nonpayment not covered by the private market, andenable the financing of Dutch export.

In addition to traditional credit insurance for acustomer’s whole turnover, we offer structured credit
risk solutions for large and complex transactions.

Information services

Specialised reinsurance for credit
and bonding

Atradius offers information services throughIberinform in Spain and Portugal, Graydon in the
Netherlands, Belgium and UK, and Informes in
Mexico. These companies help our customers manage
risk and grow their businesses by making smart
decisions in their credit management, risk andcompliance management, and marketing.

Atradius Reinsurance DAC (Atradius Re) is the leadingmonoline credit and bonding reinsurer in the market.
Through its team of underwriters in Dublin, Ireland, it
supports over 100 clients in 68 countries.

Leading European bonding solutions
Present in 12 European countries, Atradius Bonding
serves an extensive portfolio of businesses in awide range of industries, helping them secure theirperformance and support their business development.
Having gained the trust of major organisations, we are
now a leading bond supplier in Europe.

8

The outlook for 2019
Slower global growth, but still solid
Across emerging markets, growth is forecast to
decline slightly. In Latin America, it is expected toincrease, mainly on the back of a higher growth ratein Brazil. Argentina’s economy should recover inthe course of 2019, but will stay in negative territory
due to policy tightening. In Mexico, replacing NAFTA
with the US-Mexico-Canada Agreement (USMCA) has
brought some certainty, but recent policy decisions
made by the Mexican government are clouding theoutlook. In Eastern Europe, growth may moderateslightly, with Turkey expected to enter recession in
2019. Asia will continue to drive global growth, but
the Chinese slowdown will have an impact.
Advanced markets may see their growth rate decline
due to trade measures and contractionary monetary
policies. Eurozone growth is expected to moderate
in 2019 as stronger imports weigh on the growth
contribution of net trade, and due to negative
spill-overs of Brexit uncertainty. US growth is also
forecast to moderate, due to monetary tightening
by the Federal Reserve and the unwinding of the
fiscal stimulus.
Tighter financial conditions are expected foradvanced markets as a whole, though the businessenvironment remains more accommodative
compared to emerging markets. The decline in
insolvencies for advanced markets will end in 2019.
The UK is expected to see another year of rising
insolvencies, as Brexit-related uncertainty clouds thegrowth outlook. The number of UK business failures
could increase if a no-deal Brexit or postponement
prolongs the uncertainty. This would also affect otherEU countries negatively.

How does the outlook affect Atradiusand our customers?
Overall, economic conditions in 2019 are expected
to be more challenging than in 2018. But we are well
prepared, and our customers can be confident wehave the underwriting knowledge and skills to steer
them away from risks and towards opportunities.

9Consolidated financial statements
All amounts in thousands of Euro

Consolidated statement of financial position
AssetsConsolidated income statement
31.12.2018

31.12.2017

Intangible assets

253,297

236,419

Property, plant and equipment

132,317

133,445

2018

2017

Insurance premium revenue

1,648,527

1,588,095

Insurance premium ceded to reinsurers(671,988)(675,629)

Investment property

9,641

9,688

Net premium earned

976,539

912,466

Investments in associated companies

63,42863,538Service and other income

249,517249,140

Financial investments

2,328,948

2,287,830

Share of income/ (losses) of associated companies

4,652(7,396)

Reinsurance contracts

597,716

585,887

Net income from investments

17,493

20,585

Deferred income tax assets

37,27130,087

Total income after reinsurance

1,248,201

1,174,795

Current income tax assets

48,93559,559Insurance claims and loss adjustment expenses(775,244)(714,482)

Receivables

237,071

225,079

Insurance claims and loss adjustment expenses recovered from reinsurers

Accounts receivable on insurance and reinsurance business

180,503

164,983

Net insurance claims

282,938

285,498(492,306)(428,984)

Other accounts receivable

56,56860,096

Net operating expenses(469,789)(473,929)

Other assets

570,315

540,459

Total expenses after reinsurance(962,095)(902,913)

71,74369,441

Operating result before finance costs

286,106

271,882

Miscellaneous assets and accruals

498,572

471,018

Finance income

5,858

2,696

Cash and cash equivalents

446,357

347,171

Finance expenses(14,599)(19,271)

4,725,296

4,519,162

Result for the year before tax

277,365

255,307

Income tax expense(74,710)(69,073)

Result for the year

202,655

186,234

202,638

186,275

Deferred acquisition costs

Total
EquityCapital and reserves attributable to the owners of the Company
Non-controlling interests
Total

1,821,405

1,753,232

33

16

Owners of the Company

1,821,438

1,753,248

Non-controlling interests

17

(39)

Total result for the year

202,655

186,236

2018

2017

202,655

186,236

Attributable to:

Liabilities

Consolidated statement of comprehensive income

Subordinated debt

323,790323,614

Employee benefit liabilities

100,182

79,554

1,619,869

1,530,339

2,679

3,034

Deferred income tax liabilities

101,155

124,951

Other comprehensive income:Current income tax liabilities

47,992

37,636

Items that will not be reclassified to the income statement:

Payables

227,008

200,947

Effect of the asset ceiling on defined benefit pension plans

3,286(3,286)

Accounts payable on insurance and reinsurance business

152,802129,822

Actuarial gains/(losses) on defined benefit pension plans(15,269)

45,643

Trade and other accounts payable

74,206

71,125

Income tax relating to items that will not be reclassified

4,909(9,370)

Other liabilities

480,847

459,846

336

5,993

2,903,858

2,765,914(47,569)

12,854--(7,201)(25,303)

Income tax relating to items that may be reclassified(50,596)(2,303)

Other comprehensive income for the year, net of tax

18,235

18,235

Total comprehensive income for the year

152,059

204,471

152,042

204,510

Insurance contracts
Provisions

Borrowings
Total
Total equity and liabilities

4,725,296

4,519,162

Result for the year

Items that may be subsequently reclassified to the income statement:
Net fair value gains/(losses) on available-for-sale financial investments
Share of other comprehensive income of associated companies
Exchange gains/(losses) on translating foreign operations and associatedcompanies

Attributable to:
The owners of the Company
Non-controlling interests
Total comprehensive income for the year

10

11

17

(39)

152,059

204,471

This Annual Report Summary 2018 isderived from, and should be read in
conjunction with, the Atradius N.V. Annual
Report 2018. The Annual Report 2018 isavailable at www.atradius.com

Contact us
Atradius.com

Connect with Atradius on social media

atradius@atradius

atradius group

Atradius N.V.
David Ricardostraat 1– 1066 JS Amsterdam
Postbus 8982 – 1006 JD Amsterdam
The Netherlands
Tel.: +31 205539111