Connected
Annual Report 2017 Atradius N.V.

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This is Atradius
We are a global organisation, actively engaged
in supporting national and international tradethrough our credit insurance, surety and debt
collection services.

Total Revenue

In EUR million

2017
Total Revenue
2015
Total Revenue
2017
2013
2015
2017
Total Revenue
1,000
1,100
1,200
2013
2015
2017
Total Revenue
1,000
1,100
1,200
Net Investment Result
2013
2015
2017
Total
1,000Revenue
1,100
1,200
2017
Net Investment Result
2013
2015
2017
1,000
1,100
1,200
2015
Net Investment Result
2017
2013
2015
1,100
1,200
20131,000
2015
2017
Net Investment Result
2013
0
5
10
2013
1,100
1,200
20151,000
2017
Net Investment Result
0510Claims Ratio
2013
2015
2017
Net0Investment
Result5102017Claims Ratio
2013
2015
2017
5
0
10
2015
Claims Ratio
2017
2013
2015
5
10
2013 020152017
Claims Ratio
2013
38%
40%
39%
2013
5
10
2015 02017
Claims Ratio
38%
39%
40%
Expense Ratio
2013
2015
2017
Claims
Ratio
38%
39%
40%
2017
Expense Ratio
2013
2015
2017
39%
38%
40%
2015
Expense Ratio
2017
2013
2015
39%
40%
201338%2015
2017
Expense Ratio
2013
35%
35%
2013
39%
40%
201538%2017
Expense Ratio
35%
35%
Result For The Year
2013
2015
2017
ExpenseRatio 35%
35%
2017
Result For The Year
2013
2015
2017
35%
2015 35%
Result For The Year
2017
2013
2015
2013
35%
2015 35%
2017
Result For The Year
2013
0
50

To do so effectively, it’s essential that we stayconnected with the businesses – and the people we serve: through the advanced technology that
we continue to develop and the mutually beneficial
business relationships we build with our customers
and partners.
That this philosophy pays off is evident from ourcustomer retention rate of 93% and the additional
business that customers continue to place withus. It shows the real value that our customers gainfrom our association, not only in our excellent
record in paying their claims and recovering theirdebts, but also in the way we guide them away fromunacceptable financial risk and towards potentially
profitable trade.

Our 2017 performance at a glance
Building our business by connecting with ourcustomers across the world.
•	
Total revenue increased by 4.3% (5.1% at constantforeign exchange rates), supported by growthin North America, Asia and Central and Eastern
Europe as well as good performance from the
Global and Bonding units.

2013 35%
35%
2015
2017
Result For The Year050
Equity
2013
2015
2017
Result0 For The Year50
2017
Equity
2013
2015
2017
0
50
2015
Equity
2017
2013
2015
2013 050
20152017
Equity
2013
0
200
400

•	
Our risk acceptance remained balanced in 2017with a solid 41.7% claims ratio.
•	
The combined ratio ended at 77.4% (1).

20132015 02017
Equity
0
2013
2015
2017
Equity
0
2013
2015
2017
0
2013
2015
0
2013

•	
The result after tax for the year was
EUR 186.2 million.
•	
Our shareholders’ equity and subordinateddebt position was further strengthened by 6.6%,
resulting from profit generation.

0

50
200

400

200

400

200

400

200

400

200

400

1,627
1,578
1,300

1,400

1,500

1,600 1,627
1,700

1,578

1,300

1,400

1,500

1,300

1,400

1,500

1,600 1,627
1,700

1,578

1,600 1,627
1,700

In EUR million
1,837
1,761
1,718 In EUR million
1,837
1,761
1,718 In EUR million
1,837

1,800

1,900

1,800

1,900

1,761
1,718 In EUR million
1,837
1,761
In EUR million
1,718
1,837

In EUR million
1,800
1,900

1,761
In EUR million
1,718
1,300
1,400
1,500
1,600 1,627
1,700
1,800 1,837
1,900
36
1,761
In EUR million
1,578
25
38
1,718
23
1,300
1,400
1,500
1,600 1,627
1,700
1,80035 1,900
36
In EUR million
25
1,578
15
20
25
30
35
3840
23
1,300
1,400
1,500
1,600
1,700
1,80035 1,900
36
In EUR million
25
3840
15
20
30
35
2325
35
36
25
In EUR million
15
20
25
30
35
3840
23
35
41.7%
36
41.6%
25
15
20
25
30
35
3840
23 43.5%
35
41.7%
40.7%
36
41.6%
15
20
25
30
35
45.6%
3840
43.5%
41.7%
35 47%
41%
42%
43%
44%
45%
46%
40.7% 41.6%
45.6%
15
20
25
35
40
43.5% 30
41.7%
40.7% 42%
41%
43%
44%
45%
46%
47%
41.6%
45.6%
43.5%
41.7% 43%
41%
44%
45%
46%
47%
40.7% 42%
41.6%
45.6%
35.7%
43.5%
36.4%
41.7% 43%
41%
44%
45%
46%
47%
40.7% 42%
37.1%
41.6%
45.6%
35.7%
43.5% 36.6%
36.4%
41%
43%
44%
45%
46%
47%
40.7% 42% 35.9%
37.1%
35.7%
36%
36%
37% 36.6% 37% 45.6%
38%
36.4%
41%
42% 35.9%
43%
44%
45%
46%
37.1% 47%
35.7%
36%
36%
37% 36.6% 37%
38%
36.4%
In EUR million
35.9%
37.1%
35.7%
36%
36%
37% 36.6% 37%
38%
36.4%
In EUR million
186
35.9%
21237.1%
35.7%
36%
36%
37% 36.6% 37%
38%
36.4% 178186
In EUR million
35.9%
161
21237.1%
135 37% 36.6% 37%
36%
36%
38%
178186In EUR million
35.9% 150
100
200
250
161
212
135 37%36%36%
38%
178 37%In EUR million
186
100
150
200
250
161
212
In EUR million
135
178
186
In EUR million
100
150
200
250
161
212
In1,753
EUR million
135
178
1,626
186
100
150
200
250
161
1,500 212
In1,753
EUR million
135
1,393
178
1,626
100
150
200
250
1,2873161
1,500
In1,753
EUR million
600
800
1,000 135
1,200
1,400
1,600
1,800 2,000
1,393
1,626
1,2873 1,500
100
150
200
250
In1,753
EUR million
1,393
600
800
1,000
1,200
1,400
1,600
1,800 2,000
1,626
1,28731,500
In1,753
EUR million
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1,393
1,626
1,2873
1,500
1,753
600
800
1,000
1,200
1,400
1,600
1,800 2,000
1,393
1,626
1,2873
1,500
600
800
1,000
1,200
1,400
1,600
1,800 2,000
1,393
1,2873
23

600

800

1,000

1,200

25
1,578

1,400

1,600

1,800

2,000

It’s essential that we stay connected with thebusinesses – and the people – we serve.
2

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Page title

Atradius – always connected

People don’t care how much you know until
they know how much you care.
Theodore Roosevelt
Roosevelt may have been addressing politics, but his
is a principle that applies equally to business. And
Atradius’ customers know that we genuinely careabout their businesses and their success.

strengthening both the bonds we have with them and the trust that they place in us.
But it isn’t only digital connections that single Atradiusout as a strong and reliable partner. It’s personal
contact - the relationship that we build with our manybusiness partners – that plays the most significant
role in defining what we stand for and creating longlasting and mutually beneficial bonds. Through thispersonal interaction, and the special attention thatnaturally follows, we can better understand what ourcustomers expect of us and respond accordingly.

That’s because we engage in a very real sense withall of them: connecting on many levels to provide thebest possible service.
As our customers’ businesses grow, so do thedemands that they place on us, and so we constantly
seek new opportunities to enrich the ways that weserve them. For instance, we continue to raise theindustry standard of online connections, with tools
like Atradius Insights and Atradius Atrium providing
our customers and partners with vital information
about their accounts and buyers, and making regulartasks such as applying for credit limits or making
claims much simpler and less time-consuming.

We always aim to be geographically close to ourcustomers’ operations and to the markets in which
they trade. Our physical presence in over 50 countries
across five continents ensures that our customers
can profit from our in-depth understanding of thebusiness culture, political and economic stability, andtrading laws of their chosen markets. In essence, allof the links that we make are designed to help ourcustomers achieve success, by making their lives
simpler and more secure while increasing the value ofthe services we provide. And, when our customers are
successful, so are we. As a result, we don’t just work forour customers: we genuinely work with them.

But digitalisation can also present businesses withchallenges. Across the globe, commercial data andfinancial transactions are becoming increasingly
complex and, as recent history has shown, are also
subject to security threats. To stay ahead of theserisks, we continue to invest in next generation
technologies, setting our customers’ minds at rest and3

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The global economic
environment in 2017

Atradius’ understanding of the global economy isvital to our connection with customers.

The US experienced robust recovery, with GDP
growth of 2.3%. Private consumption, accounting for
more than two-thirds of the US economy, remained
the main driver of growth. Labour market conditions
improved, with an unemployment rate of 4.1% in
December 2017, better than its 2007 low.

The global economy rebounded in 2017, with higher
growth rates in both advanced and emerging
economies. Overall global growth rose to 2.9% from
2.4% in 2016.

Growth in emerging markets also strengthened.
China’s growth went up a notch thanks to higher
domestic demand and exports, while Russia, Brazil
and Argentina emerged from their 2015-2016
recessions. Overall, the emerging world benefitted
from a cyclical recovery in global trade, with trade
expanding particularly in emerging Asia and Latin
America. Mexico maintained its momentum, despite
uncertainty related to NAFTA negotiations andsignificant tightening of monetary policy.

The Eurozone saw a continued recovery, with private
consumption, investment and external demand allcontributing, while domestic demand remained thepillar of growth. Private consumption was boosted
by rising employment, low inflation and strong
sentiment. The unemployment rate fell to 8.7% in
November 2017, compared to 9.6% at the start of
the year.
However, Eurozone growth continues to be unevenly
distributed, with Southern European member
states lagging behind their Northern European
counterparts. Spain is the exception in Southern
Europe: for the third consecutive year showing robust
GDP growth of 3.1%.

Moreover, net importers of commodities such asoil, steel and coal profited from another year of
relatively low prices, providing stimulus to domestic
demand. Among these net importers are many
Latin American countries.

Low interest rates made it relatively cheap for
consumers and firms to borrow. Southern Europe
remained a weak spot in bank lending, as banks still
have to cope with weak balance sheets and high levelsof non-performing loans.

Growth in Central and Eastern Europe tracked theEurozone recovery, translating into higher exports
and more inward investment.

Eurozone growth continues to be
unevenly distributed.
4

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Page title

Connected to success in 20172017 was another successful year for Atradius: ourfinancial results demonstrating that we remain astrong and reliable business partner.

The Atradius Group expanded again in 2017, with newcredit insurance offices in Bulgaria and Romania,
a 25% stake in the South African Credit Guarantee
Insurance Corporation of Africa, and new AtradiusCollections offices in China and Turkey. This all helps
to deliver an even fuller service to our customers.

Global trade is evolving, bringing new challenges forour customers if they are to grow their businesses
safely. That’s why we use our advanced digital
capabilities to adapt to the changing environmentand strengthen our connections with our customers.

We also achieved a significant milestone with theregulatory approval of our partial internal model
for underwriting risk. This signifies a recognition
by our regulators of our risk modelling capabilities.
And our strong solvency position gives welcome
reassurance that we can withstand financial stress,
meet our financial obligations and ultimately deliver
shareholder value. That sound financial position isreflected in the credit ratings assigned to the
Atradius Group by A.M. Best (‘A’ excellent, outlook
stable) and Moody’s (‘A2’, outlook stable – upgradedin March 2018).

In 2017 we launched Atrium, our new online
customer portal, through which our insured
customers can access all their Atradius services
using streamlined and simplified processes.
Atradius Collections has also developed an
e-commerce platform so that customers can easily
buy our collections services online.
This year we also began a programme to give an
improved digital experience to our customers andpartners. This will reduce the time customers needto administer their policies, leaving them more time
to focus on our insights on risks and opportunities
that can keep them one step ahead of thecompetition. In addition, our partners will see more
efficient ways of sharing information, so that ourservices can be more easily integrated with theirs.

This year we have continued to prosper as a leader
in the credit insurance industry, with a profit of EUR
186 million in 2017 and the shareholders’ equity at an
historic high.

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Connected to all our customers –our global footprint
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, 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)Asia

Dubai (1)
Buenos Aires
São Paulo
Almonte (Ontario), Mississauga (Ontario),
Pointe Claire (Quebec)
Santiago de Chile (1)Mexico City, Guadalajara, Monterrey
Lima (1)(1)

USA	Baltimore (Maryland), Carmel (Indiana),
Chicago (Illinois), Elk Grove (California),
Hallendale Beach (Florida), Irvine (California),
Los Angeles (California), Morristown (New Jersey),
New York (New York), Plano (Texas)

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)6

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Page title

AfricaKenya
South Africa
Tunisia

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

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

 ervice establishment and co-operation
Sagreement with local partner

7

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Our products and services –connected by design
A leading bond provider in Europe

We design our credit insurance products in a
flexible modular format that can be adapted to suit
all sizes of business from small and medium-sizedenterprises (SMEs) to multinational corporations.

Present in 11 European markets, Atradius Bonding
serves a wide range of businesses from different
sectors, protecting the beneficiary if the supplier (ourcustomer) fails to meet its contractual obligations. Ourbonding expertise and market knowledge allow us tooffer flexible solutions for each customer.

For multinationals we offer a sophisticated andtailored credit management solution: our Global
policy. Customers can choose between a single
credit insurance policy serving both the parent
company and its subsidiaries, stand-alone policies
that accommodate varying performance levels andcountry conditions, or a combination of both.

Covering the risks of multiple
instalment agreements
Atradius Instalment Credit Protection (ICP) covers
short and medium-term risks involved in multiple
instalment agreements with private individuals andbusinesses in Belgium and Luxembourg – such as
consumer credit, leasing and renting. Recently we
added residential real estate cover for co-ownerships
and rental guarantees, and for private car leasingarrangements, while our product B2C Protect insurescustomers in the construction sector against payment
default by homeowners.

For large and medium-size companies, our flexible
modular credit insurance policy can be adapted toeach customer’s needs, whether they conduct theirbusiness domestically or across the world. And,
to meet the demands of SMEs, we have a range of
products that are simple to use and to manage.
‘Whole turnover’ credit insurance may not be rightfor every company. Therefore we offer structured
credit risk solutions for specific large and complex
transactions. These address a range of circumstancesfrom enhanced credit protection for single contracts
or buyers to pre-export finance and can be combined
to meet multiple needs.

Insuring the insurers
Atradius Reinsurance DAC (Atradius Re) is the leading
specialised credit and bonding reinsurer, offering
reinsurance solutions for the credit insurance andbonding business of primary insurers around theworld. The combination of the skills of a reinsurer
with the experience of a leader in credit insurance
and bonding reinforces Atradius Re’s highly
developed proposition to the market.

Skilled and sensitive debt collections
With a presence in 29 countries, Atradius Collections
helps businesses - insured or uninsured - collect tradedebts while maintaining sound business relationships
with their clients. It has built a strong reputation as a
dedicated business-to-business specialist, combining
the strength of Atradius Credit Insurance with its
own integrated international network of collectors,
lawyers and insolvency practitioners as well as its
online capabilities.

Business Intelligence
Atradius offers business intelligence services throughIberinform in Spain and Portugal, Graydon in the
Netherlands, Belgium and UK, Informes in Mexicoand Ignios in Portugal. As well as supporting ourown underwriters, this intelligence helps customers
make well-informed business decisions in areas of
their business such as credit management, risk andcompliance and marketing.

Our strategy is to focus on a rangeof business segments.
8

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Page title

The outlook for 2018
Increased momentum will drive
global growth

For advanced markets as a whole, the businessenvironment is expected to remain more or lessstable with no significant change to insolvencies.
Financial conditions are likely to remain
accommodative, despite US monetary policy
tightening and the gradual scaling back of theEuropean Central Bank’s bond-buying programme.

Across emerging markets growth is likely to pickup, helped by some recovery in commodity prices.
In Latin America, the economic recovery is expected
to continue with a higher growth rate for Brazil andArgentina and stable growth for Mexico. However,a possible breakdown of the NAFTA negotiations
remains a sizeable risk for Mexico. In Eastern
Europe, growth may moderate slightly, while Asia’s
performance will continue to drive global growth.

The UK is expected to see the biggest rise in
insolvencies, as uncertainty surrounding Brexit anda weak pound will have a real impact, with some
negative spill-over to other EU countries.

What does 2018 hold for Atradiusand our customers?

Despite this optimism, emerging markets may feelsome financial pressure from the tightening of US
monetary policy. Advanced markets are expected tomaintain their growth rate while that of the Eurozone
may cool slightly, with lower growth in exports andconsumption. Fiscal stimuli will fuel US growth.

The global business environment in 2018 will again
hold many economic and political uncertainties. For
our customers, managing the inevitable risks will be
demanding but, as ever, we will do our best to guidethem toward safe and profitable trade.

9

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Consolidated financial statements
All amounts in thousands of Euro

Consolidated statement of financial position
Assets31.12.201731.12.2016

Intangible assets

236,419

226,005

Property, plant and equipment

133,445

125,968

9,688

9,908

Investment property
Investments in associated companies

63,53839,586

Financial investments

2,287,830

2,280,293

Reinsurance contracts

585,887

632,262

Deferred income tax assets

30,08745,315Current income tax assets

59,55950,613

Receivables

225,079

201,287

Accounts receivable on insurance and reinsurance business

164,983

153,405

Other accounts receivable

60,09647,882Other assets

540,459

519,356

Deferred acquisition costs

69,441

73,124

Miscellaneous assets and accruals

471,018

446,232

Cash and cash equivalents
Total

347,171

287,080

4,519,162

4,417,673

1,753,232

1,625,470

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

16

55

1,753,248

1,625,525

323,614

323,437

Liabilities
Subordinated debt
Employee benefit liabilities
Insurance contracts
Provisions
Deferred income tax liabilities
Current income tax liabilities

79,554

109,451

1,530,339

1,561,155

3,034

6,027

124,951

115,179

37,63623,960

Payables

200,947

232,746

Accounts payable on insurance and reinsurance business

129,822

183,407

Trade and other accounts payable
Other liabilities

71,12549,339459,846

419,582

5,993

611

Total

2,765,914

2,792,148

Total equity and liabilities

4,519,162

4,417,673

Borrowings

10

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Consolidated income statements
Consolidated income statement
2017

2016

Insurance premium revenue

1,588,095

1,557,588

Insurance premium ceded to reinsurers(675,629)(663,831)

Net premium earned

912,467

893,757

Service and other income

249,140

203,079

Share of income/ (losses) of associated companies(7,396)

26,689Net income from investments

20,586

18,279Total income after reinsurance

1,174,797

1,141,804

Insurance claims and loss adjustment expenses(714,482)(698,392)

Insurance claims and loss adjustment expenses recovered from reinsurers

285,498

271,896

Net insurance claims(428,984)(426,496)

Net operating expenses(473,929)(431,325)

Total expenses after reinsurance(902,913)(857,821)

Operating result before finance costs

271,884

283,983

2,696

3,325

Finance income
Finance expenses(19,271)(12,744)

Result for the year before tax

255,309274,564

Income tax expense(69,073)(62,792)

Result for the year

186,236

211,772

Owners of the Company

186,275

211,795

Non-controlling interests

(39)

(23)

Total result for the year

186,236

211,772

2017

2016

186,236

211,772

Effect of the asset ceiling on defined benefit pension plans(3,286)-

Actuarial gains/(losses) on defined benefit pension plans

45,643(40,045)

Income tax relating to items that will not be reclassified(9,370)7,925

12,854

20,324Attributable to:Consolidated statement of comprehensive income
Result for the year
Other comprehensive income:Items that will not be reclassified to the income statement:

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(25,303)(1,869)

Income tax relating to items that may be reclassified(2,303)(1,699)Other comprehensive income for the year, net of tax

18,235(15,364)

Total comprehensive income for the year

204,471

196,408

204,510

196,431

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

(39)

(23)

204,471

196,40811

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This Annual Report Summary 2017 is derived
from, and should be read in conjunction
with, the Atradius N.V. Annual Report 2017.
The Annual Report 2017 is available atwww.atradius.com

Contact us
Atradius.com

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Atradius N.V.
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The Netherlands
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30/05/2018 15:04