2020

Leading the future
Annual Report Atradius N.V.
Annual Report 2016 Atradius N.V.

Contents
Management report
This is Atradius........................................................................................................ 4
This is Atradius.................................................................................................................... 4
Our 2020 performance at a glance ............................................................................... 6
Ten years in figures............................................................................................................ 8This is Atradius 3

A message from the Management Board.................................................................... 9
Business profile.........................................................................................................
Products and services...................................................................................................... 14
Global footprint.................................................................................................................. 17
Atradius Group organisation......................................................................................... 19
Corporate governance ..............................................................................................
Report of the Supervisory Board................................................................................ 21

Business profile 13

Shareholder structure..................................................................................................... 24
Corporate governance.................................................................................................... 27
Company information ......................................................................................... 00
The global economic environment ........................................................................... 32
Business performance ................................................................................................... 36
Human resources ............................................................................................................ 44
Risk and capital management..................................................................................... 48
Corporate responsibility ............................................................................................... 51

Corporate governance 20

Financial statements ........................................... 55
Consolidated financial statements 2020 ................................................................ 56
Company financial statements 2020 .................................................................... 140

Other information .................................................. 150
Independent auditor’s report...................................................................................... 153
Glossary .............................................................................................................................156

Company information 31

Overview	of subsidiaries, branches, associatedcompanies and minority shareholdings.................................................................159
Click on the arrow2

to go straight to that section of the reportThis is Atradius

3Atradius | This is AtradiusThis is Atradius
2020 was a year of new challenges. Tacklingthe impact of Covid-19 has demonstrated ourfortitude and sustainability as a company, but it
has also helped us push forward with initiatives
to modernise the ways in which we work
together with our customers and partners.
This has also led to new ways of doing business and shown us that we can move boldly
forward with ideas that just last year may have seemed untenable.
We have always been a business that puts customers first. Delivering the best possible
service to our customers, everywhere they do business with us, is our highest priority.
With businesses in lockdown around the world, this most important deliverable wasbeing challenged. However, we rose to the task by ensuring our staff have all of theresources they need, despite working from home, to continue to meet our customers’
needs and by providing our customers with the flexibility they require to continue doing
business with buyers that are important to their sustainability.
We reviewed buyers case by case then worked together with our customers to maximise
cover on their buyers in the current environment. We extended claims periods giving ourcustomers more time to collect overdue invoices without changing the reimbursement
period when they do have claims. We worked together with the government in a numberof countries so that credit insurance could continue to be offered on buyers that mightotherwise be left without cover. With communication and collaboration as the hallmarksof our service offering, we are happy to say that our retention rate has remained high.
Throughout the year, we continued to prepare Atradius for the future. New productfeatures that have system dependencies, such as exposure pricing, or hybrid noncan/cancellable cover will be delivered to provide customers with greater flexibility
and choice. In addition, a simplified product and pricing structure allows for faster
response times to customers and prospects with right-first-time information, enhanced
documentation and quicker turnaround times. The pricing mechanism will also beenhanced so that it is possible to understand the price impact of different cover features
to facilitate a dialogue between customers and brokers about finding the right solution
at the right price. We are further rolling out our credit management tool Atradius Flow.
The substantial progress we are making in development of technological advancements
will increase the value of and improve the efficiency with which our credit insurance,
bonding and collections customers access and share information, products and services.
While we hope that this is a 100-year event and does not revisit us again, it has been achallenge that we and our customers can be happy to say we have learned and grownfrom. We are ready to move forward and grow along with our customers, brokers andpartners in 2021 and the years to come.

4

Atradius | This is Atradius

The evolution of Atradius
1925 –	NCM (Nederlandsche Credietverzekering Maatschappij) is founded in
the Netherlands, with the aim of improving trading conditions for
Dutch companies.
1929 – Crédito y Caución is founded, becoming the first credit insurer in the
Spanish market.
1932 – NCM partners with the Dutch government to provide export credit
services to Dutch companies on behalf of the Dutch State. This
relationship continues to be successful.
1954 –	In Germany, Gerling Kreditversicherung (Gerling Credit) is establishedas the credit insurance arm of the Gerling Group.
1962 – Gerling Credit opens its first international branch office, in Switzerland,
and is the first private credit insurer to offer export credit protection.
1991 – NCM acquires the short-term export credit arm of the UK’s Export Credit
Guarantee Department (ECGD), itself a long-standing credit insurer.
2001 –	The paths of NCM and Gerling Credit meet and Gerling NCM is formed
2004 – Gerling NCM rebrands to Atradius.
2008 –	Grupo Catalana Occidente S.A. becomes the major shareholder ofAtradius. Crédito y Caución becomes a key part of the Atradius Group.
2011 –	Atradius launches its Roadmap for Success; a strategy to enable its
regional teams across the globe to be even more responsive to theircustomers’ needs.
2013 – Atradius redefines its corporate guiding principles with a clear focus ondelivering tailor-made solutions in each of its markets.
2014 –	Grupo Catalana Occidente S.A. celebrates its 150th anniversary, and the10th anniversary of the Atradius brand.
2016 – Atradius merged its two European insurance carriers consolidating
the leadership in the market, and strengthen its information services
by acquisitions of Graydon Holding N.V. (Graydon) in the Netherlands
and IGNIOS Gestão Integrada de Risco S.A. in Portugal (now named
Iberinform Portugal).
2017 – Atradius acquires 25% of Credit Guarantee Insurance Corporation of
Africa Ltd.
2018 –	
Atradius Credit Insurance further continued to expand and strengthen
the geographic footprint in 2018 by opening new offices in Bulgaria,
Romania, Indonesia, Taiwan and Vietnam, as well as strengthening ourpresence in Thailand and Malaysia. Atradius Collections opened a new
office in Turkey and Atradius Bonding expanded into Portugal.
2019 –Atradius acquired full ownership of Iberinform Portugal S.A. AtradiusCollections established an office in Dubai, further expanding its
geographical coverage.

5

Atradius | This is Atradius

Our performanceat a glance
Supporting our customers during themost challenging of times• Net result of EUR 44.2 million• Insurance premium revenue decreased by 1.8%
• Atradius claims ratio increased to a 58.6%• The expense ratio for the year improved to 35.7%• The gross combined ratio ended at 94.3%• A positive contribution of EUR 14.3 million from our prudent investment
portfolio• Our shareholder’s equity and subordinated debt position decreased by 4.8%

Management Board
David Capdevila, Chairman
Andreas Tesch
Christian van Lint
Claus Gramlich-Eicher
Marc Henstridge

The Supervisory Board		
Ignacio Álvarez, Chairman
Francisco Arregui, Vice-Chairman
Xavier Freixes
Désirée van Gorp
Carlos Halpern
John Hourican
Bernd Hinrich Meyer
Hugo Serra
José María Sunyer

Supervisory Board Committees
Audit Committee
Remuneration, Selection and Appointment Committee

6

Total Revenue

In EUR million

2020
2019
2018
2017
2016

1,979
2,012
1,898

1,837
1,761

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

Net Investment Result (1)2,100

In EUR million

2020
2019
2018
2017
2016

14
18
22
25
23
0

5

10

15

20

25

30

Gross Claims Ratio
58.6%

2020
2019
2018
2017
2016

42.8%
43.7%

41.7%
41.6%
30%

35%

40%

45%

50%

55%

60%

Expense Ratio
2020
2019
2018
2017
2016

35.7%

35.9%
35.5%
35.7%
36.4%
35%

36%

37%

Result For The YearIn EUR million

44

2020
2019
2018
2017
2016

228
203
186
212

0

50

100

150

200

EquityIn EUR million

2020
2019
2018
2017
2016

1,913
2,009
1,821
1,753
1,626

0
(1)

250

500

1,000

1,500

2,000

Net Investment Result consists of net income from investments and share of associated companies (excluding

gains & losses, and impairments on associated companies).
!"#realised$% &'$()* &+ ',&)'$- &+ ./'$0 1 )+ 2+ '+ $1 3$)&'$2)0 1 ,&$341 ,$2)* &+ ',&)'+ $5)6$+ 754&$1 3$5+ + 1 0 25'&6$0 1 ,85)2&+ $!&90 /.62):$4&5/2+ &6$:52)+ $;$/1 + + &+ <$5)6$$2,850 '$1 3$* 5/.5'21 )$1 3$5+ + 1 0 25'&6$0 1 ,85)2&+ $2)$=>"?$5)6$=>"@#A

7

2,500

Atradius | This is Atradius

Ten years in figures
Financial information(in EUR million)

2020

2019

2018

2017

2016 (1)

2015

2014

2013

2012

2011

Insurance premium revenue

1,727.4

1,759.5

1,648.5

1,588.1

1,557.6

1,537.0

1,458.2

1,412.1

1,439.8

1,403.4

Service and other income

252.0

252.5

249.5

249.1

203.1

180.8

169.0

166.4

161.8

150.5

Total revenue

1,979.4

2,012.0

1,898.0

1,837.2

1,760.7

1,717.8

1,627.2

1,578.4

1,601.6

1,553.8

14.3

25.9

22.1

24.7

22.8

36.0

37.8

35.1

30.3

31.1

1,993.7

2,037.9

1,920.2

1,861.9

1,805.6

1,753.8

1,665.0

1,613.5

1,632.0

1,584.9

44.2

227.7

202.7

186.2

211.8

178.2

161.2

134.5

113.6

129.8

Equity1,913.3

2,008.7

1,821.4

1,753.2

1,625.5

1,500.2

1,393.0

1,286.9

1,196.3

1,129.8

Total assets

5,380.2

5,067.4

4,725.3

4,519.2

4,391.5

4,250.2

4,130.9

3,697.8

3,737.2

3,580.1

Insurance contracts

1,902.7

1,706.2

1,619.9

1,530.3

1,561.2

1,648.8

1,572.2

1,486.3

1,592.8

1,549.3

Return on equity (3)

2.3%

11.9%

11.3%

11.0%

13.6%

12.3%

12.0%

10.8%

9.8%

12.0%

Outstanding ordinary shares(at year-end, in million)

79.1

79.1

79.1

79.1

79.1

79.1

79.1

79.1

79.1

79.1

Dividend paid (in EUR million)

102.9

91.8

83.9

76.7

71.2

64.9

53.8

43.5

43.5

25.3

Gross claims ratio (4)

58.6%

42.8%

43.7%

41.7%

41.6%

43.5%

40.7%

45.6%

51.2%

49.7%

Gross expense ratio

35.7%

35.9%

35.5%

35.7%

36.4%

37.1%

36.6%

35.9%

35.0%

35.2%

Net investment result (2)Total income
Result for the year
Balance sheet information(in EUR million)

Shareholders information

Technical ratios

Gross combined ratio

94.3%

78.7%

79.2%

77.4%

78.0%

80.6%

77.3%

81.5%

86.2%

84.9%

Net claims ratio

55.9%

43.3%

44.7%

41.4%

42.0%

42.0%

42.6%

46.4%

49.1%

50.3%

Net expense ratio

36.7%

30.0%

32.0%

34.2%

35.4%

35.9%

35.8%

37.4%

37.5%

34.2%

Net combined ratio

92.6%

73.4%

76.7%

75.5%

77.4%

77.9%

78.3%

83.8%

86.7%

84.5%

3,503

3,531

3,545

3,596

3,586

3,161

3,139

3,107

3,143

3,149

Employees
Full-time equivalents(FTE), at year-end
Financial strength ratings
Moody’s (5)A2, outlook stable

A.M. BestA (excellent), outlook stable

(1)

(6)

Including Graydon, Iberinform Portugal, Gestifatura and Informes Mexico since Q3 2016.
Net Investment Result consists of net income from investments and share of associated companies (excluding realised gains & losses and impairments on
associated companies).

(2) 

(3)

Return on equity is defined as the result for the year divided by the time weighted average shareholders’ equity.
2019 Gross Claims Expenses and the Gross Claims Ratio shown in the management report exclude a single large claim of 83.9m which was 100% reinsured
and had zero impact on the net insurance result.

(4) 

(5)

 oody’s affirmed the A2 financial strength rating of the Atradius rated entities with a stable outlook since February 2021 (after a temporary reduction toMnegative outlook in March 2020 reflecting market uncertainty).
In 2020 A.M. Best reaffirmed the Financial Strength Rating of A (Excellent), outlook stable and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of the
Atradius rated entities as “a+”.

(6) 

8

Atradius  |  A message from the Management Board Atradius N.V.

A message from theManagement Board

Left to right: Christian van Lint, David Capdevila, Claus Gramlich-Eicher, Andreas Tesch, Marc Henstridge.

The impact of Covid-19 continues topermeate all aspects of society –often with unclear potential outcomes.
The global economic impact has already been severe, but it is expected thatthe world is not over the peak yet. This results in a business environment fullof uncertainties, but we are confident that especially in these trying times wecan support our customers, partners, employees, and shareholders with ourstrong proposition.

9Atradius  |  A message from the Management Board Atradius N.V.

Operations and staff
Our core asset is our people and it was key for us to protect them in thisdifficult year. We have been monitoring the outbreak of Covid-19 closely. On
all relevant levels, we have activated incident management teams in step withthe severity of the outbreak. Following public health authority guidelines, ouroffices and office policies have been adapted, enacting working from homepolicies where possible, while ensuring that employees that have to workfrom the office, can do so safely.
As our employees had to switch over to working remotely immediately, we
increased our remote working capacity and accelerated the rollout of virtual
collaboration tools.
Additionally, to help each other through these times, we have also been
pursuing virtual means of staying connected. This included regular
informational newsletters, Covid-19 themed webinars, and informal virtual
meetings.
We have been impressed by the extraordinary motivation and commitment
from our employees to go the extra mile during these circumstances. This
spirit and motivation is a reflection of our confidence in our ability to provide
excellent service to our customers and partners.

Performance
As we are fully committed to unrivalled customer service, we intensified
the communication with our customers and partner to understand theirchallenges in these unprecedented times.. This allowed us to understand theirindividual situation and how we can best serve them, while also managing
our risk appropriately and avoiding claims in sectors that are most severely
affected by the pandemic.
Unlike other economic crises, we were also able to leverage the opportunity
within several European countries, protecting their local economy byestablishing government support schemes for credit insurance.
This has helped us to fulfil our objective of protecting our customers fromclaims and allow them the necessary freedom to trade in such a difficult year.
However, even with this support, the effects of the pandemic are visible in our
financial performance.
Our insurance premium revenue saw a reduction of 1.8% compared to lastyear, reaching EUR 1,727.4 million. Nonetheless, our customer retention is at avery strong level of 92.7%. The need to maintain prudent loss reserves leads toan increase of claims expenses and a gross claims ratio of 58.6%, whereas theexpense ratio decreased marginally to 35.7%. The overall result, reached EUR
44.2 million, and our equity base reduced by 4.8% to EUR 1,913.3 million.

10

The extraordinary
motivation andcommitment of
our employees
during thesecircumstances isa reflection of ourconfidence in ourability to provide
excellent service to
our customers
and partners.

Atradius  |  A message from the Management Board Atradius N.V.

Key projects
Even in these challenging times, we are committed to further evolving
through technology and digitalisation. The current crisis has only accelerated
the underlying developments for working, connecting and transacting
digitally. Hence, we are glad to say that we are on track in our plans tomodernise our core systems, both in credit insurance and bonding, to further
develop our customer portal Atrium, and to prepare ourselves for compliancewith relevant upcoming regulations, such as IFRS17.
2020 also saw the first implementation phase of our new system Arcade insome key commercial processes as well as the launch of our new productmanagement functionality.
We have further expanded our capabilities, not only in connecting withour customers through APIs, but also in participating in new trading
opportunities through platforms, such as our very own B2BSafe marketplacein Spain.
Also for our other business lines, we are exploring new means of improving
the customer experience. Examples include the development of a new online
integrated secured loan platform for insured consumer credits by ICP, and ouronline collections portal Agora.

Financial strength
AM Best has affirmed our financial strength rating as A (Excellent) and ourLong-Term Issuer Credit Rating of a+, also confirming the outlook as stable.
Moody’s has affirmed our A2 financial strength rating with a stable outlook
since February 2021 (after a temporary reduction to negative outlook in
March 2020 reflecting market uncertainty).
In the current circumstances, where most of the World economies havebeen plunged into recession added to a rising insolvencies environment,
the reaffirmation of our rating is an endorsement of our financial strength,
approach to managing risks and resilience to cope with the market
uncertainty caused by the Covid-19 pandemic.
The ratings reflect the strength of our balance sheet, which AM Best
categorises as very strong, as well as our strong operating performance,
favourable business profile and appropriate enterprise risk management.

11

These challenging
times have
sharpened our
focus to further
evolving throughtechnology andaccelerated ourunderlying
developments
for working,connecting andtransacting
digitally.

Atradius | A message from the Management Board Atradius N.V.

Outlook
The global economy is expected to recover to relatively high levels in 2021,
as vaccination rates against Covid-19 increase and lockdown measures arerelaxed. Emerging markets are forecast to benefit to a larger degree, which isskewed by a projected strong Chinese growth due to pent up demand and an
effective pandemic response. Latin America and Eastern Europe are
expected to grow slightly slower, also as a result of the lack, or reduction of
fiscal measures. Advanced economies are projected to recover to a growthof 3.9%, with the Eurozone experiencing a longer recovery due toextended lockdowns.
Bankruptcies and insolvencies are expected to increase in almost all
economies, as government measures suspending against insolvencies
conclude. The economic damage of the pandemic will take years to recover,
but the beginnings are expected in 2021.
As the governmental support in the economy will continue in 2021 and somecountries will extend their governmental schemes, we are confident that also
our risk management actions will continue to be balanced and customer
focussed.
Also with the current economic uncertainties, we are confident andcommitted to advance our service and value proposition. This means that also
in 2021, we will pursue our innovative company-wide multi-year programme
to modernise our IT systems. Further development and rollout offunctionality in these programmes is scheduled and underway. We expect tocontinue rolling out the commercial application Arcade in most of the
Atradius countries, as well as the new bonding application in Italy.
Next to this, we want to enhance our digital capabilities to connect withour customers and partners through the full rollout of our API library andproviding our Atradius Flow service to more countries. With Atradius Flow,
our customers will be able to access credit insurance processes directly intheir ERP systems, in this case, in one of the market leading applications
Microsoft Dynamics ®.
In the last years, the number of employees at Atradius has been very stable.
Looking forward, no substantive changes in workforce are plannedor expected.
The year 2020 has been full of challenges and we will feel the effects wellbeyond its end. Nonetheless, we continue to work as a team in an agile
and relationship-driven organisation that is committed to supporting ourcustomers, business partners, brokers, and shareholders.
The Management Board would like to thank our customers, business
partners, brokers, agents, reinsurers and employees for their continued
commitment and collaboration during these challenging times.

The Atradius Management Board
David Capdevila, Chairman
Andreas Tesch
Christian van Lint
Claus Gramlich-Eicher
Marc Henstridge

12

Business profile

13

Atradius  |  Business profile Atradius N.V.

Products and services
Credit Insurance: tailor made solutions forcompanies of all sizes
Credit insurance provides protection against losses arising from non-payment
for goods sold on credit (whether this results from insolvency, default or politicalrisks).
Our credit insurance products are based on a concept called ‘Modula’. This is aworldwide-aligned catalogue of modules (or policy conditions) which can be
combined in a flexible way for each customer to meet the requirements of theirbusiness. This means that every policy is tailored to the needs of the customer.
These products are designed to provide protection for a customer’s wholeturnover.

We have solutions for all sizes of business:
For multinationals, we offer a sophisticated and tailored credit management
solution in the form of our Global policy. As a market leader and pioneer withover 20 years of experience in this segment, Atradius Global has developed an
excellent understanding of the needs of multinationals. The structure of thecover is uniquely designed to meet the requirements of the customer, whether
they have centralised or local credit management. This is supported by dedicatedGlobal account teams and key account underwriters situated around the world
to provide extensive cross-border customer service and consistent high quality
decision making on the buyer portfolio of our Global customers.
For medium-size and large local companies we offer policies tailored to thecustomer’s needs using the Modula concept. In this way, cover can be adapted
to fit all kinds of businesses, in any sector, doing business domestically orinternationally.
For SMEs we have created a range of SME products built from the Modula concept
but packaged to make them easy to understand and simple to administer.
The added value of purchasing credit insurance from us comes from the day to
day credit management and risk assessment support that we provide alongside
our credit insurance policy. Each policy is supported by an account manager,
credit limit underwriting and our on-line tools and services.
The Account Manager provides a day-to-day contact point who can help
customers to navigate their policies and give credit management support.
Credit limit underwriting is carried out by hundreds of experienced underwriters
across the globe. They assess the risk of your buyers and set safe trading limits.
They are based in the country of the buyer so they bring local knowledge andlanguage skills to provide the best possible risk assessments on your behalf.

14

Atradius  |  Business profile Atradius N.V.

Our on-line tools provide additional credit management support services such as‘Insights’ which allows you to analyse the risk in your portfolio. ‘Atrium’ allows
you to perform administrative tasks for your policy such as applying for a credit
limit or submitting a claim.
In addition to more traditional credit insurance, which covers a customer’s ‘wholeturnover’, we also offer a range of structured credit risk solutions for specific large
and complex transactions. These solutions address a range of circumstances,from enhanced credit protection for single contracts or buyers to pre-export
finance, and can be combined to meet multiple needs.
With the rise of digital trading via platforms we have also developed a single
transaction credit insurance product which can be digitally integrated withplatforms so that credit insurance can be purchased on-line, in the moment
when trading decisions are being taken. This has allowed us to integrate ourcredit insurance on Kemiex, the first online trading platform to buy and sell raw
materials for Feed, Food, Vet and Pharma.

Reinsurance: specialised solutions for credit
and bonding
Atradius Reinsurance DAC (Atradius Re) is a leading monoline credit and bonding
reinsurer, offering reinsurance solutions for credit insurance and bonding
primary insurers around the globe. Through its team of underwriters in Dublin,
Ireland, Atradius Re supports over 100 clients in 50 countries. The strength of
Atradius Re is in its combination of access to the Atradius underwriting skills in
its key business credit and bonding, and highly specialised reinsurance skills forthe needs of credit and bonding underwriters.

Bonding: leading bond supplier in Europe
Present in 12 European countries, Atradius Bonding serves an extensive
portfolio of businesses in a wide range of industries, helping them secure
their performance and support their business development both locally andinternationally. We help our customers in much more than just managing risks
and protecting themselves against worst-case scenarios. We provide tailor-madesolutions that fit their needs and strategies, providing all-round support. We are
the first choice for companies that are subject to bond obligations. With our longstanding bonding expertise and international network, we can meet customers’
large, specific and complex needs quickly and efficiently, allowing us to growsteadily in recent years. As a trusted business partner and guarantor, we haveearned the trust of major organizations and have a strong credit rating, allowing
us to become a leading bonds supplier in Europe.

Instalment Credit Protection: risk protection for
instalment-based credit agreements
Atradius Instalment Credit Protection (ICP) covers short-term and medium-termrisks involved in instalment-based credit agreements with private individuals
and businesses. It offers its services to financial and corporate policyholders in
Belgium and Luxembourg. The main product offering covers consumer credit,
leasing and renting risks. More recently, we have extended the product range tooffer residential real estate insurance products for co-ownerships and for rental
guarantees, as well as products for private-car leasing arrangements. We offer the
product ‘B2C Protect’ to customers in the construction sector, to protect against
payment default by homeowners.

15

Atradius  |  Business profile Atradius N.V.

Debt Collection: professional and reliable collections
backed by a global network
With worldwide expertise, and staff in more than 30 countries, AtradiusCollections helps businesses - both insured and uninsured - collectdomestic and international trade debts, whilst maintaining sound business
relationships with their clients. We have built a strong reputation as abusiness-to-business specialist, using the strength of Atradius Credit
insurance, combined with our own integrated international network ofcollectors, lawyers and insolvency practitioners, in addition to our online
capabilities. Since 2015, Atradius Collections has also offered a first-party
collections service, so customers can outsource their reminder process
immediately after due date. We have created a range of services for thefinancial industry, including back-up servicing, cross-border collection andinvoice verification, allowing factoring companies and asset-based lenders
to investigate whether the business transactions or invoices from clients are
acknowledged by the buyer.
The latest addition to our Collections services is Agora, our online debt
recovery platform. This online service allows prospects and customers to
get an instant quote on the collection of outstanding debts, initiate theircollection, and receive updates until the debt is collected. Dutch StateBusiness: the export credit agency of the Netherlands
Atradius Dutch State Business (ADSB) is the export credit agency of theNetherlands. To minimise the risks of non-payment not covered by theprivate market, and to enable the financing of Dutch export, ADSB offers awide range of insurance and guarantee products to Dutch exporters of capital
goods, internationally operating construction companies, and their financiersor investors. ADSB works on behalf of the Dutch state, making sure exporttransactions can be completed successfully.

Credit Information Services: business intelligence tosupport credit management decisions
We offer information services through the following companies: Iberinformin Spain and Portugal, Graydon in the Netherlands, Belgium and UK
and Informes in Mexico. These companies support our customers withbusiness intelligence solutions that help them to manage risk and growtheir businesses by making smart credit management, risk and compliancemanagement and marketing decisions. They also support us by providing
information to underwrite buyer risks for our core credit insurance business.

16

Atradius  |  Business profile Atradius N.V.

Global footprint
EuropeAustria

ViennaBelgium

Namur, Antwerp

Bulgaria
Czech Republic

Sofia
PragueDenmark

Copenhagen, Århus

FinlandHelsinkiFranceParis , Bordeaux , Compiègne, Lille, Lyon, Marseille,
Rennes, Strasbourg

Germany

Cologne , Berlin , Bielefeld, Bremen, Dortmund,Düsseldorf, Frankfurt, Freiburg, Hamburg, Hanover,
Kassel, Munich, Nuremberg, Stuttgart

GreeceAthensHungary

Budapest

Iceland

Reykjavik (1)IrelandDublinItaly

Rome, Milan

Luxembourg

Leudelange

Netherlands

Amsterdam, Ommen

NorwayOslo

PolandWarsaw, Krakow, Poznan, Jelena Gora

Portugal

Lisbon, PortoRomania

Bucharest

RussiaMoscow

Slovakia

Bratislava

Spain

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

SwedenStockholm

Switzerland

ZurichTurkeyIstanbul

United Kingdom

Cardiff, Belfast, Birmingham, London, Manchester

Middle East
BahrainManama (1)IsraelTel Aviv (1)LebanonBeirut (1)Oman

Muscat (1)Qatar

Doha (1)Asia

Saudi Arabia

Riyadh (1)China

Guanzhou, Shanghai (2)United ArabEmirates

Dubai

Hong Kong, SAR

Hong Kong, SAR

India
Indonesia

Mumbai, New Delhi,
Kolkata (2)Jakarta (2)

Japan

Tokyo

Malaysia

Kuala Lumpur (1)Philippines

Manila (1)(1)

Americas
Argentina

Buenos Aires (1)BrazilSão Paulo

CanadaMississauga (Toronto), St. Laurent (Montreal)

Chile

Santiago de Chile

MexicoMexico City, Guadalajara, Monterrey

Peru

Lima

USA

 altimore (Maryland), Chicago (Illinois), Dallas (Texas),
B
Indianapolis (Indiana), Los Angeles (California),
Morristown (New Jersey), New York (New York)

(1)

(1)

17

AfricaKenya

Nairobi (1)MoroccoCasa Blanca (2)Credit Insurance

South Africa

Johannesburg (1)Collections

Tunisia

Tunis (1)Information

Singapore

Singapore

South Korea

Seoul (2)TaiwanTaipei (1)Oceania

Thailand

Bangkok (2)AustraliaSydney, Adelaide, Brisbane, Melbourne, Perth

DSB

VietnamHo Chi Minh CityNew Zealand

AucklandReinsurance(1)Associated company, minority
interest or reinsurance
agreement with or without aco-operation agreement withlocal partner(2)

 ervice establishment andS
co-operation agreement withlocal partner

Bonding(1)

Instalment Credit

18

Atradius  |  Business profile Atradius N.V.

General Atradiusgroup organisation
General overview of the main holding andoperating companies as at 31 December 2020

Atradius Collections
Holding B.V.
The Netherlands
Office locations:
Ireland
Australia
Italy
Belgium
MexicoBrazilNetherlands
CanadaPolandChina
Czech Republic Spain
Singapore
Denmark
TurkeyDubai
United Kingdom
FranceUnited ArabGermany
Emirates
Hong Kong
USA
Hungary

Atradius N.V.
The Netherlands

Atradius Insurance
Holding N.V.
The Netherlands

Atradius Finance B.V.
The Netherlands

Atradius Crédito y
Caución S.A. de Seguros y
Reaseguros
Spain
Atradius Crédito y Caución
Seguradora S.A.
Brazil
Iberinform Internacional S.A.U.
Spain
Graydon Holding N.V.
The Netherlands

Branches:Japan
Australia
Luxembourg
Austria
Netherlands
Belgium
New Zealand
Bulgaria
NorwayCanadaCzech Republic Poland
Portugal
Denmark
Romania
FinlandSingapore
FranceSlovakia
Germany
SwedenGreeceSwitzerland
Hong Kong
TurkeyHungary
United Kingdom
Ireland
Italy

Atradius Reinsurance DAC
IrelandAtradius Trade Credit
Insurance Inc. USA
Atradius Credit Insurance
Agency Inc. USA

Atradius Seguros
de Crédito S.A. Mexico
Operating companies& branches:

Atradius Rus Credit
Insurance LLC Russia

Belgium
China
Denmark
FranceGermany
India
Indonesia
IrelandItaly
Japan
MexicoAtradius Information
Services B.V.
The Netherlands

19

NorwayRussiaSouth Korea
Spain
SwedenSwitzerland
TaiwanThailand
United Kingdom
Vietnam

Atradius Participations
Holding S.L.U.
Spain
Atradius
Participations

Corporate governance

20Atradius  |  Corporate Governance Atradius N.V.

Report of theSupervisory Board
During 2020, Atradius showed its
resilience remaining in a position tocontinue to support its customers andprotect its employees, while maintaining
its strength in the context of theunprecedented events resulting from theCovid-19 pandemic.
In this environment, the global economy entered a sharp recession, withthe containment measures restricting economic activity and the outlook
for corporate insolvencies having worsened in spite of the fiscal stimulus
packages and other temporary measures implemented by governments.
Against this backdrop, Atradius stayed committed to its value proposition
continuing to contribute to the commercial development of its customers, andtook risk mitigating measures and worked with several governments acrossEurope to implement schemes aiming at protecting trade and the economiesof the countries in scope.
The financial results for the year amounted to an annual turnover of 1,979.4
million euros and a profit of 44.2 million euros, while managing to maintain astrong solvency position.
In a year full of unparalleled challenges, Atradius took swift measures tominimise the disruption for its customers preserving the continuity ofservices and systems and maintaining a customer-oriented approach throughclear and transparent communication. From the beginning of the outbreak,
Atradius protected and supported its staff across its various locations,
implementing remote working solutions driven by local government
guidelines as well as collaboration and communication tools. In this difficult
environment, and, focusing on its long-term strategy, Atradius remainedcommitted to its innovation programmes and its digital transformation,
taking key steps on the programmes designed to transform Atradius’ coresystems by enhancing the business processes while strengthening the value
proposition in Credit Insurance and Bonding, respectively.

21

Atradius  |  Corporate Governance Atradius N.V.

In line with the strategic priorities of Grupo Catalana Occidente, Atradiusfurther strengthened its commitment to ethical, environmental, social andgovernance behaviour and to report its sustainability performance in aconsistent and transparent way, contributing to the Environmental, Socialand Governance (ESG) initiatives launched by Grupo Catalana Occidente inearly 2020.
With regard to corporate governance, the Supervisory Board ensuresthat Atradius runs its business and manages risk for stakeholders in atransparent, ethical way. In 2020, the full Supervisory Board convened fivetimes. The Supervisory Board has established two Committees, the Audit
Committee and the Remuneration, Selection and Appointment Committeethat discuss specific issues in depth and prepare items on which the fullSupervisory Board makes decisions. In 2020, the Audit Committee convened
four times and the Remuneration, Selection and Appointment Committee
convened twice.
In terms of key topics discussed during the 2020 Supervisory Board meetings,
detailed attention was given to the actions taken by Atradius towards theeffects of Covid-19, including in respect of the schemes implemented bygovernments. The Supervisory Board also reviewed Atradius’ results andstrategy, as well as of the main business risks and the risk management
framework of Atradius, and the renewal of the reinsurance programme. The
Supervisory Board was also updated on compliance matters, on the ongoing
IT transformation programmes and on the developments around IT security.
The budget for 2021 was approved at the Supervisory Board in December 2020.
Key items discussed in the Audit Committee included the review of Atradius’
quarterly results and the Annual Report, including the auditor’s management
letter, the evolution and sufficiency of technical provisions, the internal audit
reports, the audit plan, the re-appointment of the external auditor and thereview of the external auditor’s independence. These topics were discussed in
the presence of the external auditor PwC.
During 2020, the Remuneration, Selection and Appointment Committee
discussed the performance of the members of the Management Boardand evaluated the scope and composition of the Management Board. It
also reviewed the Remuneration Policy, variable pay and targets set forthe members of the Management Board and Strategic Staff and maderecommendations on the re-appointments of members of the Supervisory
Board. The Remuneration, Selection and Appointment Committee further
reviewed the result of the yearly self-assessment undertaken by theSupervisory Board.
With effect 1 January 2020, David Capdevila took over the position as
Atradius’ CEO and member of the Management Board of Atradius N.V.
Furthermore, in December 2020, Messrs. Carlos Halpern, John Hourican and
José María Sunyer were re-appointed as members of the Supervisory Board.

22

Atradius stayedcommitted to its
value proposition
continuing tocontribute to
the commercial
development of its
customers.

Atradius  |  Corporate Governance Atradius N.V.

Atradius N.V.’s Annual Report contains the financial statements for thefinancial year 2020, audited by PricewaterhouseCoopers Accountants N.V.,
and has been presented to the Supervisory Board by the Management Board.
The Supervisory Board has approved the Annual Report and advised theGeneral Meeting to adopt the financial statements for 2020.
The Supervisory Board would again like to thank the Management Boardand all employees of Atradius for their commitment and the resilience
shown to overcome the challenges faced in 2020, as well as to all customers
for continuing to entrust their business to us. The Supervisory Board trusts
that the Atradius management team, stakeholders as well as employees are
best placed to weather the uncertainties expected for 2021 and contribute to
Atradius having a successful year.

The Supervisory Board
Ignacio Álvarez
Chairman23

Atradius  |  Corporate Governance Atradius N.V.

Shareholder structure
Atradius is part of Grupo Catalana Occidente.
It is the international brand of the credit
insurance business.
Shareholders structure of Atradius N.V., unchanged since 2011:

Shareholders structure of Atradius N.V.

Percentage ofShares

Grupo Catalana Occidente, S.A.

35.77%

Grupo Compañía Española de Crédito y Caución, S.L.

64.23%

Grupo Catalana Occidente, S.A.

73.84%

Consorcio de Compensación de Seguros

9.88%

Nacional de Reaseguros

7.78%

España, S.A. Compañía Nacional de Seguros

5.00%

Ges Seguros y Reaseguros

3.50%

Total

100.00%

Grupo Catalana Occidente is the main shareholder with an economic stake of 83.2% (35.77% directly and 47.43%
indirectly through the holding company Grupo Compañía Española de Crédito y Caución, S.L.).
The shares of Grupo Catalana Occidente are listed on the Continuous Market of the Barcelona and Madrid stock
exchanges as part of the IBEX Medium Cap Index. Currently, 32.42% of its capital is floating and the main
shareholder is INOC, S.A., holding 61.95% of the capital of Grupo Catalana Occidente.
Thanks to the stability of the results and the prudent investment policy, Grupo Catalana Occidente has a solid
solvency position.

Key figures(EUR million)

2020

2019

% change
2019/2020

Long-term capital market value

4,663.4

4,574.1

1.7%

Equity3,937.6

3,851.20

2.2%

Subordinated debt

200.7

200.5

0.1%

Return on long-term capital

7.3%

11.1%

Funds under management

14,758.9

14,377.3

Total revenue

4,559.5

4,547.7

0.3%

270.1

424.5

36.4%

Consolidated result

24

2.7%

Atradius  |  Corporate Governance Atradius N.V.

Grupo Catalana
Occidente
One of the leaders in the Spanish insurance sector and inglobal credit insurance. Founded more than 150 years ago,
it has experienced constant growth, thanks to its capacity toadapt to change and remain loyal to its principles, which are
truly insurance oriented.
The Grupo Catalana Occidente is committed to the professional development of its employees and insurance agents,
its personalised customer service and the trust its shareholders have in the organisation.

More than 17,000Intermediaries

More than
1,600 offices

Presence inmore than 50
countries

More than
7,400 employees

More than€4,500 million
turnover

Strategic goal
To be leaders in the field of risk protection and long-term savings of families, as well as that SMEs, and to beinternational leaders in commercial risk coverage.

Profitability

GrowthRecurrent and sustained profitability
based on technical and actuarial
rigour, investment diversificationand processes that allow tight cost
ratios and quality service.

Defining markets targeted by
the group, appropriate productand service development andestablishing suitable distribution
channels to reach the customer.

Solvency
Prioritise own resources generation andcontinued growth in order to support thegroup’s expansion, ensuring compliancewith commitments and ensuring appropriate
shareholders returns.

25

Atradius  |  Corporate Governance Atradius N.V.

Traditional BusinessCharacteristics

Lines of Business

Focused on Spain

Multi-risk

Families and small and medium sizedcompanies

Automobile

Professional agency network

Other non-life

1,405 offices

Life and financial products
HealthFuneralCredit Insurance
Business

Service offered in more than 50 countries

Credit insurance

Business to businessBonding

Agents and brokers

Credit and bonding reinsurance
Debt collection
Instalment credit protection
Business information

Fundación Jesús Serra
Fundación Jesús Serra, named after the founder of the Grupo Catalana
Occidente, was created in 2006 in order to channel the philanthropic actionsof the Group and to drive the human and professional values that werecharacteristic of its founder. For this reason, the foundation participates inmore than seventy projects in the areas of business, teaching, investigation,
culture, sport and social action. In this way the Group contributes to theconstruction of a fairer, more united and more developed society, in which
values such as initiative, effort, healthy competition and continuous
improvement prevail.

26

Atradius  |  Corporate Governance Atradius N.V.

Building trust
Atradius endorses the importance ofsound corporate governance. Key elements
of independence, accountability andtransparency create a relationship of trust
between Atradius and all its stakeholders;customers, shareholders, employees,
suppliers and the general public.
Atradius N.V. is a limited liability company organised under the laws of
the Netherlands, with a Management Board and a Supervisory Board. The
Management Board is responsible for achieving the Company’s objectives,
strategy, policy and results, and is guided by the interests of the Company andthe business connected with it. The Supervisory Board supervises the Company’s
general affairs and the policy pursued by the Management Board, as well as theperformance of the management duties by the Management Board members,
taking into account the interests of the Company and the business connectedwith it.

The Management Board
Composition
The Management Board of Atradius N.V. currently consists of five members.
David Capdevila - Chairman and Chief Executive Officer
Andreas Tesch - Chief Market Officer
Christian van Lint - Chief Risk Officer
Claus Gramlich-Eicher - Chief Financial Officer
Marc Henstridge - Chief Insurance Operations Officer
CVs of each of the Management Board members, showing their roles, backgroundand experience are available on our website.

27

Atradius  |  Corporate Governance Atradius N.V.

Role and procedures
The Management Board as a whole is responsible for the management and thegeneral affairs of Atradius and is supervised by the Supervisory Board. The
Management Board determines Atradius’ operational and financial objectives,
and the strategy designed to achieve these objectives. It ensures Atradius has aneffective risk management system, internal control system and internal audit
function in place. It submits the annual business plan and budget of Atradius to
the Supervisory Board for approval. The Management Board rules describe theallocation of duties and the decision-making process of the Management Board.
The General Meeting has the authority to appoint the members of theManagement Board on the recommendation of the Remuneration, Selection
and Appointment Committee of the Supervisory Board. A Management Board
member may be suspended or dismissed by the General Meeting at any time. The
Management Board shall consist of at least three members. Management Board
members are appointed for an undefined term. In the event of a vacancy, themanagement of Atradius N.V. will be conducted by the remaining members orsole remaining member of the Management Board.
Remuneration
The Supervisory Board determines the remuneration and further employment
conditions of each member of the Management Board, based on therecommendation of the Remuneration, Selection and Appointment Committee of
the Supervisory Board and in accordance with the remuneration policy adopted
by the General Meeting. You can find information regarding the amount of
remuneration received by Management Board members in the explanatory notes
to the consolidated financial statements of the Annual Report 2020.
Conflict of interest
A member of the Management Board with a potential conflict of interest with theCompany will immediately report this to the Chairman of the Management Board,
who will determine whether the reported case qualifies as a conflict of interest.
A member of the Management Board will not participate in any deliberations or
decision-making of the Management Board if that member has a direct or indirect
personal interest that conflicts with the interest of the Company or its business.
In such a case, the other non- conflicted members of the Management Board willpass the resolution. If all members of the Management Board are conflicted, thenthe Supervisory Board will pass the resolution.

The Supervisory Board
Composition
The Supervisory Board of Atradius N.V. currently consists of nine members.
Ignacio Álvarez, Chairman
Francisco Arregui, Vice-Chairman
Xavier Freixes
Désirée van Gorp
Carlos Halpern
John Hourican
Bernd Hinrich Meyer
Hugo Serra
José María Sunyer
CVs of each of the Supervisory Board members, showing their background andexperience are available on our website.

28

Atradius  |  Corporate Governance Atradius N.V.

Role and procedures
The Supervisory Board supervises the Company’s general affairs and the policy
pursued by the Management Board. The responsibilities of the Supervisory Board
include, among others, supervising, monitoring and advising the Management Boardon the Company’s strategy, performance and risks inherent to its business activities;
the design and effectiveness of the internal risk management and control systems andthe financial reporting process. The Supervisory Board rules describe the decisionmaking process and the composition and committees of the Supervisory Board.
The General Meeting has the authority to appoint the members of the Supervisory
Board on the recommendation of the Remuneration, Selection and Appointment
Committee of the Supervisory Board. A Supervisory Board member may besuspended or dismissed by the General Meeting at any time. The Supervisory Board
shall consist of at least five members. Supervisory Board members shall resign
according to a rotation scheme determined by the Supervisory Board, by which eachSupervisory Board member shall resign after a maximum of four years after thedate of appointment. A resigning Supervisory Board member may be reappointed. A
Supervisory Board member will resign early in the event of inadequate performanceor in other circumstances in which resignation is deemed necessary by the othermembers of the Supervisory Board.
The composition of the Supervisory Board
The composition of the Supervisory Board shall be such that the combined
experience, expertise and independence of its member enables it to best carry out
its various responsibilities. The current members of the Supervisory Board haveextensive experience in insurance and reinsurance, investment banking, strategic
consulting and regulatory matters.
Role of the Chairman and the Company Secretary
Among other things, the Chairman of the Supervisory Board co-ordinates thedecision making of the Supervisory Board, draws up the agenda of the Supervisory
Board meetings, chairs the Supervisory Board meetings and the General Meetingsof Shareholders. The Chairman also ensures the adequate performance of theSupervisory Board and its committees, ensures the annual evaluation of thefunctioning of the members of the Management Board and the Supervisory Board,and acts on behalf of the Supervisory Board in serving as the principal contact
person for the Management Board. The Chairman of the Supervisory Board is
assisted in his role by the Company Secretary.
Committees of the Supervisory Board
The committees of the Supervisory Board are set up to reflect both Dutch
corporate standards and the specific interests of the business of Atradius. As
risk management is considered a key area for attention, the Supervisory Board
considers it important that this subject is discussed in the full Supervisory Board,rather than in a specific risk committee.
Audit Committee
The Audit Committee supports the Supervisory Board in fulfilling its supervisory
and monitoring duties for the assurance of the integrity of the Company’s financial
statements, the external auditor’s qualifications, and the performance of internal andexternal auditors. The Audit Committee monitors, independently and objectively, thefinancial reporting process within Atradius and the system of internal controls. The
Audit Committee also facilitates the ongoing communication between the external
auditor, the Management Board, the internal audit department and the Supervisory
Board on issues concerning the Company’s financial position and financial affairs. In
2020, the Audit Committee met four times. The Audit Committee currently consists ofXavier Freixes (Chairman), Francisco Arregui and Bernd Hinrich Meyer.

29

Atradius | Corporate Governance Atradius N.V.

Remuneration, Selection and Appointment Committee
The Remuneration, Selection and Appointment Committee supports theSupervisory Board in fulfilling its supervisory and monitoring duties for
proposals for the appointment of members of the Management Boardand the Supervisory Board, the remuneration policy, the remunerationof senior management and other corporate governance matters. In 2020,
the Remuneration, Selection and Appointment Committee met twice. The
Remuneration, Selection and Appointment Committee currently consists ofFrancisco Arregui (Chairman), Ignacio Álvarez and Hugo Serra.
The General Meeting determines the remuneration of the members of theSupervisory Board based on the recommendation of the Remuneration, Selection
and Appointment Committee, and in accordance with the remuneration policy
adopted by the General Meeting. Members of the Supervisory Board’s expenses
are reimbursed. You can find information regarding the amount of remuneration
received by Supervisory Board members in the explanatory notes to theconsolidated financial statements of the Annual Report 2020.
Conflict of interest
A member of the Supervisory Board with a potential conflict of interest with theCompany will immediately report this to the Chairman of the Supervisory Board,
who will determine whether the reported case qualifies as a conflict of interest. A
Supervisory Board member will not participate in any deliberations or decisionmaking process of the Supervisory Board, if that member has a direct or indirect
personal interest that conflicts with the interest of the Company or its business.
In such a case, the other non-conflicted Supervisory Board members will pass theresolution. If all Supervisory Board members are conflicted as referred to above,
then the General Meeting will pass the resolution.

General Meeting
The General Meeting is the body of the Company formed by the shareholders andother persons entitled to vote. The General Meeting can exercise its rights at theGeneral Meeting of Shareholders. The General Meeting is also authorised toapprove important decisions regarding the identity or character of Atradius, aswell as major acquisitions and divestments.

The internal and external auditor
Internal auditor
The internal auditor fulfils an important role in assessing and testing the internalrisk management and control system. The Director of Internal Audit reports to the
Chairman of the Audit Committee and, with respect to day-to-day activities, to theChief Executive Officer of Atradius.
External auditor
The General Meeting appoints the external auditor on the recommendation of
the Audit Committee of the Supervisory Board. The Audit Committee evaluates
the performance of the external auditor and also pre-approves the fees for audit
services to be performed by the external auditor. The Audit Committee ensuresthe external auditor is not appointed to render non-audit services that are listed
explicitly as prohibited services in the Atradius Policy on Auditor Independence.
The General Meeting appointed PricewaterhouseCoopers Accountants N.V. as theCompany’s external auditor for the financial year 2020.

30

Company information

31

Atradius | Consolidated management report

The global economic
environment
Major downturn due to Covid-19
The year 2020 turned out to be completely different to the one envisaged ayear ago. At the end of 2019, our main concern was the escalating trade war
between the United States and China. But the outbreak of the coronavirus
ushered in a global pandemic with unprecedented economic consequences.
World GDP is estimated to contract by 3.7% in 2020, a higher contraction thanoccurred in 2009, after the 2008 financial crisis.

Advanced markets
A sharp economic downturn occurred in all advanced markets in 2020.
There was a big decline in output in the second quarter of 2020, following
containment measures to limit the spread of Covid-19. There was somemechanical recovery in GDP over the third quarter, followed by a setback in
the fourth quarter as many countries tightened restrictions during thesecond wave.
The United States still registers one of the highest rates of infections in theworld. While the economy has made some headway towards recovery inrecent months, we estimate a 3.5% contraction of GDP in 2020. Consumer
spending (which typically accounts for 70% of US GDP) and fixed investment
account for the decline. The US government has reacted with a massive fiscal
stimulus programme (amounting to around USD 2.3 trillion, or 11% of GDP),addressing every segment of the economy and a further USD 900 billion
stimulus bill was approved in December.
The Eurozone witnessed a second wave of infections towards the end of
2020, leading to tighter restrictions and clouding the economic outlook.
GDP decreased by 7.1% in 2020. Domestic demand was under pressure as
employment and household incomes declined. The unemployment rate isrising, but still understates the true effect of the coronavirus crisis as young
people in particular retreat from the labour market. The unemployment raterose from a low of 7.2% in April to 8.3% in November.
In a bid to contain the market fallout caused by the pandemic, central banks
across advanced markets further loosened monetary policies. The European
Central Bank (ECB) announced the purchase of an extra EUR 1.85 trillion ofbonds under the Pandemic Emergency Purchase Programme (PEPP). The
Federal Reserve lowered the policy rate by a cumulative 1.5 percentage points
to 0.25%. Both the ECB and the Federal Reserve have also taken liquidity
enhancing measures. Despite the loosening of monetary policies, credit
conditions have deteriorated as banks brace for a rise in bad loans due to thepandemic. Central bank surveys in both the Eurozone and the United States
point to a tightening of credit standards for businesses and households.

32

Global economic growth

Real GDP growth, percent change y-o-yAtradius | Consolidated management report

Emerging markets
Many emerging market economies are still at a critical stage in the publichealth crisis. There is a sharp downward effect on economic growth fromstringent lockdowns and indirect negative effects from lower world trade.
Moreover, the plunge in tourism income and commodity prices negatively
impact markets that are dependent on these sectors. GDP of emerging
markets as a group declined 1.9% in 2020.
Prospects for China are much stronger than for most other countries in theemerging markets group. The Covid-19 virus emerged in the Chinese cityof Wuhan towards the end of 2019. While it initially spread throughout thecountry, the government was able to suppress the virus in Q1 2020 witha stringent lockdown and to keep it under control since then. Economic
activity rebounded again in Q2 2020 and full-year growth is forecast at 1.8%.
Growth was supported by monetary policy and fiscal stimulus. India has been
struggling to contain Covid-19 infections. GDP contracted strongly in 2020
owing to harsh measures to control the virus and limited fiscal support.
Countries in Latin America remain severely affected by the pandemic
and the government response has often been slow or not had the desired
impact. Two of the region’s largest economies, Mexico and Argentina, werein deep recession in 2020. In Brazil, the recession was less deep due tosubstantial government support. Argentina faced the combined impact ofa confidence crisis and the negative spill over effects from the pandemic.
Mexico also witnessed a deep recession in 2020, driven by steep contractions
in consumption and investment, and with the government only providing
modest support. The automobile sector, Mexico’s leading source of exports,
suffered from a sharp fall in external demand and severe supply-chain
disruptions. In Eastern Europe, the Russian economy faced a double blow
from lower oil prices and weakened demand due to domestic lockdown
measures. In Turkey, the economy managed to avoid recession, as domestic
demand was helped by a strong credit push.

Global insolvencies: calm before the storm?
Despite the sharp economic downturn, corporate insolvencies declined
in many markets in 2020. We witness this decline in all major regions,especially in Europe and Asia. Two types of policies are responsible for this.
First, many countries amended their insolvency regimes to protect companies
from going bankrupt. This includes temporary suspensions of insolvency
applications in bankruptcy courts. Second, governments provided fiscal
support to companies whose revenues came under pressure as a result of thecrisis. In the Eurozone, France, Austria and Belgium stand out as the countries
with the strongest decline in insolvencies. These countries have sizeable
fiscal stimulus programmes in combination with temporary adjustments to
insolvency procedures.

33

Global commodity prices
Price index, 2010 = 100

Atradius | Consolidated management report

For Italy and Spain we forecast a milder decline in insolvencies due to weaker
government support, but they do have temporary insolvency suspensions.
Germany is expecting a minor insolvency decrease due to its fiscal package
as well as institutional reasons that make business failures less responsive
to GDP changes compared to other European countries. Despite thesemeasures, we expect to see an uptick in insolvencies in the final quarter of2020 compared to the relatively low levels in the first three quarters. Thisis because the changes to insolvency regimes are only temporary and fiscal
support will be gradually phased out.
United States business insolvencies are expected to show a mild increasein 2020. The United States did not make adjustment to its bankruptcy court
proceedings and insolvencies have a high responsiveness to economic
growth. The virus plunged the United States economy into recession, while
growth was already decelerating last year due to the US-Sino trade war, which
has weakened Chinese imports and tourism, and caused disruptions in global
supply chains. The United Kingdom witnessed a decline in insolvencies. UK
companies benefitted from strong government support, amidst a severe
economic downturn driven by stringent lockdown measures as well as
Brexit-related uncertainty. Several advanced markets in Asia, such as Japan,
Singapore and South Korea, also witnessed a decline in insolvencies.
Emerging economies had a more challenging insolvency environment, as
they generally had more limited government support schemes. Of all major
emerging economies, Russia and Turkey are forecast to have an increase
in insolvencies, while the number of insolvency registrations declined in
Brazil. Even though Brazil was in deep recession in 2020, several government
measures including fiscal stimulus prevented an increase in bankruptcies.

Outlook for 2021
In 2021, growth of the world economy is likely to rebound to 5.0%. This
relatively high growth rate is partly a ‘technical’ rebound from a relatively lowbase in 2020. As the vaccination process is underway, we assume that social
distancing measures will be gradually reduced in 2021. We expect that a largepart of the developed world will be vaccinated by the summer of 2021. Whileeconomic activity is expanding, costs of the crisis in terms of bankruptcies
and unemployment remains high.
Emerging markets as a group are forecast to grow by 6.3% in 2021, sufficient
to more than recover lost GDP in 2020. However, the picture is biased bystrong Chinese growth in 2021 (8.8%). China has been able to avoid a second
wave of infections, and the economy will receive a temporary boost in
2021 from pent-up demand, with GDP growth returning to normal levels
in later years. Without China, emerging markets are expected to expand by‘only’ 4.8% in 2021. In Latin America, limited fiscal policy options and an
uncertain health situation hinder recovery prospects. In Eastern Europe, thelow oil price and the government’s plan to roll back fiscal stimulus slows
the recovery in Russia. In Turkey, authorities started to tighten financial
conditions recently, which will slow the recovery in 2021.

34

In 2021, growth of
the world economy
is likely to reboundto 5.0%.

Atradius | Consolidated management report

Growth in the advanced economies is projected to strengthen to 3.9%,
leaving GDP some 1.2% below what it was in 2019. Based on an expected
additional fiscal stimulus under US president Joe Biden, the United States
is expected to regain most of the lost value in GDP in 2021, but the costs tothe economy in terms of unemployment and bankruptcies remain high. The
Eurozone faces a more protracted recovery as many economies remain in
stringent lockdowns in Q1 2021. The outlook will continue to be dominatedby the evolution of the pandemic and the size of fiscal policy responses.
Economic activity is not expected to return to its pre-crisis levels in 2021.
We expect a rise in bankruptcies in virtually all markets as the measuresthat helped to suppress insolvency growth in 2020 are gradually unwound.
There remains a wide dispersion of insolvency projections between
countries. Insolvency growth will be high in European countries like
Spain, France and Belgium, that made drastic adjustments to insolvency
procedures in 2020. It will also be high in Australia, the United Kingdom,
and the United States. In the United Kingdom, the deep recession of 2020
will have a delayed upward effect on bankruptcies in 2021. The trade deal
that was signed with the EU in December 2020 will increase trade barriers
between the two economic blocs, though much less so than under a no-deal
scenario.
It will take years for economies to recover from the damage caused by thecoronavirus. The first steps will be taken in 2021, but it will not be enoughto bring GDP back to pre-corona crisis levels, let alone reverse the economic
damage to businesses and households.

35

Atradius | Consolidated management report

Unwavering business
continuity andcustomer support(EUR thousands)

2020

2019

1,860,481

1,896,024(1.9%)(1,090,163)(810,989)(34.4%)

Gross insurance operating expenses(664,845)(680,260)

2.3%

Reinsurance result

Gross Insurance revenue
Gross insurance claims and loss adjustment expenses(1) (2)(28,146)(82,596)

65.9%

Insurance result

77,327322,179(76.0%)

Service income (1)121,550

118,575

2.5%Service expenses(119,711)(115,340)(3.8%)(2)

Service result

1,838

3,235

(43.2%)Net investment result

14,322

17,682(19.0%)

Operating result before finance costs

93,488343,096(72.8%)

Result for the year (after tax)

44,167

227,708(80.6%)

Employees (FTE)

3,503

3,531

(0.8%)(1)

Overview includes inter-segment revenue and claims expenses(2)

 019 Gross Claims Expenses, Gross Claims Ratio and the Reinsurance result shown in the management report exclude a single large claim of minus
2
EUR 83.9 million that was 100% reinsured and had no impact on the Insurance Result.

Gross

Net

2020

2019

2020

Claims ratio

58.6%

42.8%

58.6%

43.3%

Expense ratio

35.7%

35.9%

34.2%

30.0%

Combined ratio

94.3%

78.7%

92.8%

73.4%

Revenue by business segment
6.2%
7.6%

6.1%
80.0%

Credit Insurance (including ICP)
Reinsurance
BondingServices36

2019

Atradius | Consolidated management report2020 was an unprecedented year that featured a global pandemic leading
to a worldwide recession. The global economic environment led to a decline
in insurable business transactions resulting in a 1.9% decrease in grossinsurance revenue. Gross claims ended at EUR 1,090 million, an increaseof 21.8% based on rising loss reserves related to the Covid-19 outbreak. The
overall insurance result decreased by 76.0% on a reported basis due to theimpact of Covid-19.
Expenses decreased by 2.3%, due mainly to savings measures taken whenlockdowns commenced, offsetting costs related to the implementation of
the company´s digital strategy, including a range of measures to support
customers. Our recurring expense ratio for the year was 35.7%, which is below
the 35.9% realised in the prior year. Brokerage fees are marginally below lastyear. In spite of the decrease in the expense ratio, the net combined ratio forthe year increased to 94.3%.
The Covid-19 health crisis has severely impacted the world economy. Facedwith this situation, the governments of many of the largest European
countries have relied on credit insurance to support the business fabric of
their economies. The government reinsurance arrangements are part ofa comprehensive package of measures and aim to ensure that sufficientliquidity is available in the market, to counteract the damage inflicted on
businesses affected by the pandemic and to preserve the continuity of
economic activity during and after the pandemic. The reinsurance result in2020 was EUR -28.1 million, which EUR minus 44.9 million resulting fromthe government support schemes in multiple countries across the group,
primarily in Europe.
The net investment result decreased by 19.0% in a difficult environment
with volatile equity markets, despite a reduction of the profitability of theinvestment portfolio.
The financial income and expenses result is higher than the previous
financial year mainly due to the impact of variances in the exchange rates.
Thus, the consolidated result, at EUR 44.2 million, decreased by 80.6%
compared to 2019.

37

Atradius | Consolidated management report

Credit Insurance including Instalment Credit Protection (ICP)(EUR thousands)
Insurance premium revenue

2020

2019

1,453,060

1,496,618(2.9%)

Information income

133,071

136,500(2.5%)

Insurance revenue

1,586,131

1,633,119(2.9%)

Gross insurance claims and loss adjustment expenses (1)(927,362)(688,292)(34.7%)

Gross insurance operating expenses(554,422)(563,226)

1.6%

Result before reinsurance

104,347

298,224(65.0%)

Reinsurance result(12,387)(66,075)

81.3%

Result after reinsurance

91,961

316,049(70.9%)

Total credit insurance and ICP gross claims ratio

58.5%

42.1%

(16.4% pts)

(1)

(1)

Overview includes inter-segment revenue and (claims) expenses.

Credit insurance & ICP revenue by region
10.0%

8.4%

21.5%

Spain & Portugal
Northern & Central Europe

6.3%Western Europe
Southern Europe
Asia
22.8%

31.0%

Americas2020 was a challenging year for Atradius’ credit insurance businesswith the Covid-19 outbreak and the resulting reduction in insurable
business.  As a result gross insurance revenues decreased by 2.9% (1.1%
at constant foreign exchange rates), collectively generating EUR 1,208.0
million in revenue. Claims expenses increased 20.1% due to an economic
environment that prompted for the increase in loss reserves, leading to a
result after reinsurance of EUR 91.7 million (71.0% lower than in 2019).
The Group has reduced its risk exposure (TPE) by 8.6%, to EUR 605.7
billion at year-end 2020, due to an adjustment in the risk selection
criteria in accordance with the current health crisis and lower
commercial activity of our policyholders.

38Atradius | Consolidated management report

In 2020, the competitive environment proved to be increasingly
challenging and few of our local credit insurance units achieved growthcompared to the previous year. Asia maintained a growth trend in 2020of 12.3% as we continue to pursue our ambition in this region and North
America showed excellent growth of 5.4%, driven by new business andstrong contributions from renewing policies. Our markets in the UK,
Ireland, and Oceania also showed growth throughout the year (4.4% and2.9% respectively), while France grew 2.5% and Belgium & Luxemburg by
0.9%.  The rest of our European markets had negative growth due mainly
to the reduction in shipments and insurable turnover.
Gross claims expenses for our local credit insurance units ended at EUR
570.2 million with a gross claims ratio 17.7%pts higher than the previous
year. Increases in claims were most notable in Spain, Asia, our Special
Products Unit, UK & Ireland, North America and the Netherlands.
Atradius Global’s growth compared to past years also receded. Despite
our first class service and excellent retention rate, reductions in insurable
turnover and premium revenue reflect decreased sales, a consequence ofthe current economic environment on our customers since the onset of theCovid pandemic. While many customers were impacted negatively, some
did however observe increased sales.
The technical result of our credit insurance & ICP business reduced by
70.9% compared to 2019, placing it at EUR 92.0 million.

39

Atradius | Consolidated management report

Reinsurance(EUR thousands)

2020

2019

Insurance revenue

150,764

140,218

7.5%

Gross insurance claims and loss adjustment expenses(124,617)(75,426)(65.2%)

Gross insurance operating expenses(58,572)(57,447)(2.0%)

Result before reinsurance(32,426)

7,345(541.5%)(120)(3,990)

97.0%

Reinsurance result
Result after reinsurance(32,546)

3,354(1,070.3%)

82.7%

53.8%

(28.9% pts)

Gross claims ratio

Reinsurance revenue by region of cedent
16.4%

35.6%

Europe

10.9%

Asia & Oceania
Africa & Middle East
South America

37.1%

Atradius Reinsurance DAC (Atradius Re) is a leading market reinsurer
providing capacity to primary insurance companies in credit insurance andbonding.
Atradius Re currently assumes business from 100 clients over 50 countries,
maintaining a balanced diversity within the portfolio. The underlying
business consists of 60% credit insurance and 40% bonding, based onpremium volume. The business is underwritten by a multilingual, highly
trained and experienced international team, at Atradius Re’s offices in Dublin,
Ireland.
Atradius Re has long-standing relationships with its clients and leads 40% of
its treaties; in addition, it maintains close contacts with specialist brokers. The
quality of these client relationships is underscored by the Company’s uniqueoffering: combining the Group’s skills in the primary underwriting of credit
insurance and bonding risks with its own distinctive approach, and expertise,in structuring reinsurance solutions. In this way, Atradius Re can always
anticipate and respond to the specific and changing needs of its customers.
Total reinsurance revenue, of EUR 140.2 million in 2019, increased to EUR
150.8 million, in 2020, due to strong organic growth from cedants.
The claims ratio increased from 53.8% in 2019 to 82.7% in 2020, due toconservative prudence in respect of underwriting years 2019 and 2020,reflecting the uncertainties arising out of the Covid 19 pandemic and its
impact on global economies.
Gross insurance operating expenses showed an increase in monetary value
from €57.4 million to €58.6 million, due to higher earned premium. The grossinsurance operating expense ratio however decreased from 41.0% in 2019 to
38.9% in 2020.

40

Atradius | Consolidated management report

Bonding(EUR thousands)

2020

2019

Insurance revenue

123,586

122,687

Gross insurance claims and loss adjustment expenses(38,183)(47,271)

19.2%

Gross insurance operating expenses(43,431)(51,986)

16.5%

Result before reinsurance

41,97323,431

79.1%

Reinsurance result(15,639)(12,530)(24.8%)

Result after reinsurance

26,334

10,899141.6%

Gross claims ratio

30.9%

38.5%

7.6% pts

Bonding revenue by region
10.3%

2.2%

25.5%

33.6%

Italy
FranceNordic & Germany
Spain
Other
28.4%

As a leading bond and surety provider in Europe, Atradius Bonding holds a
long-standing expertise and knowledge across the European markets in which we are active. After
expanding in different countries during recent year, we are now consolidating our strong presence
within 12 markets (Italy, France, Spain, Portugal, Denmark, Finland, Norway, Sweden, Germany,
Netherlands, Belgium and Luxembourg), offering tailor made products and solutions to ourcustomers. We offer comprehensive products and services to our customers, helping them tomanage market risks and enhance their business development. We focus on supporting ourcustomers both domestically and internationally.
Innovation is essential to our business strategy. As the bonding market becomes increasingly
technologically advanced, we have made it a priority to provide up-to-date tools to support our
product offering to our customers.
Our locally focused web portals boost our customer service through accessibility, speed andflexibility. These enable our customers to access their policies and bond limit information at a click of
a button, 24/7. Our portals help our customers minimise the amount of time they spend on
administration and enable them to always be on top of their business. They provide safety, efficiency
and transparency.
A business transformation programme is currently underway, aiming at providing a modern state of
the art user journey and experience, through which our customers and partners will feel truly
supported at every step. This new system will boost our performance and the future profitability ofour business. Furthermore, it will enable us to continue our geographical expansion andenhancement of the flexible products and solutions we offer to our customers.
The business transformation programme will deliver a common platform for the whole bonding
business, which will further foster productivity, capacity and efficiency of operations.
Despite the global impact of the pandemic in 2020, Atradius Bonding has been able to advise andsupport our customers on their specific needs throughout the year. Furthermore, despite thechallenges of 2020, our tailored risk underwriting approach allowed us to record a claims ratio of
30.9%, an improvement of almost 8%pts compared to 2019.

41

0.7%

Atradius | Consolidated management report

Services(EUR thousands)

2020

2019

Service income (1)121,550

118,575(2.5%)

Service expenses(119,711)(115,340)(3.8%)

1,838

3,235

43.2%

Service result(1)

Overview includes inter-segment revenues.

Service revenue
58.5%

41.5%

Information
servicesC ollections & Other

Atradius’ services segment comprises our debt collection operations, theDutch State Business and our information service businesses.

Debt Collection
Atradius Collections helps our customers – both credit insured and noninsured - to recover domestic and international trade debts while maintaining
sound business relationships with their clients. We have built an enviable
reputation, becoming the global trade invoice collector of choice, leveraging
the strength of our core credit insurance business with our own integrated
international collections network. We offer a single point of contact for all
debt collection cases and worldwide collections expertise ‘on the ground’
through a presence in 30+ countries, covering 96% of all countries worldwide
through a global network of collectors, lawyers and insolvency practitioners.
Debt collection and credit insurance complement each other as they follow
different performance patterns through the cycle, with the collection service
picking up as the economy deteriorates and credit insurance prospering morein a benign environment. The collection service supports the product and risk
diversification of our business as it is free of insurance risk.
2020 was characterised by an on-going challenging economic climate, linked
to the often unclear effects of the pandemic and its impact on global tradeand payment morale. Atradius Collections service income increased by 4%
to EUR 56.6 million in 2020 while debt placements stabilised as a result of
the unstable economic outlook combined with trade stimuli in the form ofgovernment schemes. By adapting to remote working and adjusting the debt
collection approach to the market circumstances, daily service was provided
at a high standard with recoveries increasing by 7,9%, contributing to both theinsured and non-insured products.

42

Atradius | Consolidated management report

Atradius Collections enhances overall group and unit efficiency andexpanded its reach in 2020 through an intensified cooperation with
Gestifatura in Portugal, resulting in the integration of this company inJanuary 2021. Further expansion in the coming years is expected in newmarkets. As global customers grow their business in these regions, AtradiusCollections’ goal is to be there to support them locally.

Atradius Dutch State Business
The technical results for the account of the Dutch state were positive
throughout 2020 as ADSB provided cover for risks related to infrastructure
projects, the export of capital goods, services to buyers in countries outside
the Netherlands, as well as cover for political risks related to investments inother countries. Despite the Covid crisis claims didn’t increase significantly.
To help exporters in these difficult times a support package was developedof which many exporters and banks made use.
ADSB also continued to cover development-relevant investments andexport contracts in selected medium-income and lower-income countries,
which benefit (local) SMEs. We provide this service under the Dutch Good
Growth Fund.
Next to providing credit insurance solutions, ADSB also offers direct financefor export contracts up to EUR 5 million by discounting bills of exchange.
This direct finance option is available for transactions insured under either
the Dutch Good Growth Fund or the Dutch Trade and Investment Fund.

Information Services
Graydon is one of the leading providers of business information solutions
for credit management, marketing intelligence, and risk and compliance.
Graydon’s markets demonstrated modest growth, with fierce competition at
the low-end segment and large customers demanding value-added services.
In this competitive market the company was able to realise revenues thatare almost equal to 2019.
The company is moving towards more tailored solutions for its customers,
offering scalable products and services. Shortly after the Covid-19 outbreakthe company launched an “Impact Score” in Belgium which measures how
robust a company is in extraordinary circumstances within a disrupted
environment. Graydon has supported the Belgian government in measuring
the impact of support schemes on the economy. Moreover many customers
have benefitted from the insights.
The company continued to upgrade customers to new solution for(international) credit reports and monitoring, with customer feedback
being very positive.
In the Iberian markets, Iberinform continued to support our insurance
business as well as our customers, showing improved profitability throughmarginal savings in direct expenses whilst maintaining stable revenue.

43Atradius | Consolidated management report

Human resourses
As one Atradius, we have risen to the many
challenges that this pandemic has brought
us and the world at large. It was essentialthat we acted promptly to ensure that ouremployees and customers around the world
remained safe and well during the outbreakof Covid-19. As a result, we immediately
activated our Group Incident Management
Team, as well as the Incident Management
Teams for every location. These teams
have been taking action, and offering local
guidance, in line with the directives of theirlocal public health authorities’.
When the outbreak occurred, we asked all of our employees to work from home.
However, we recognised that some employees, because of the nature of their job,
had to continue to work from the office. Therefore, we ensured that our offices
were adapted in such a way that these employees could continue to work safely.
This work has also enabled us to put in place the necessary safety measures forthe phased return to the office of other employees.
Even with the pandemic’s many downsides, we became closer as an Atradiusfamily both with our customers, and with our colleagues around the world.
The launch of a variety of collaboration tools group-wide helped us all to stayconnected. We saw each other’s lives at home through our computer cameras, andcould support each other through the challenges that the different waves of thepandemic brought us.
The wellbeing of our employees is paramount. In addition, the continuationof their working network needed to be supported. To help with both elements,
many initiatives were put in place to stay connected, engaged and motivatedat both group and local level. For example, we have promoted several virtual
sessions, like virtual coffee meetings and virtual team off-sites. We set up a
private LinkedIn group, which enabled people to share experiences and advice.
We published regular newsletters with practical tips for how to deal with thechallenges our employees were facing. Our Management Board and Atradius
Leadership Teams held webinars in which they updated all our employees on thelatest position and made themselves available to answer questions.

44

Atradius | Consolidated management report

Measuring Employee Engagement
It was important for us to monitor the pulse of how our employees were
dealing with the different challenges they were facing. One of the methods
we employed for this was a regular group-wide survey asking our employees
questions about how they feel, their workload, the challenges they faced
while working from home and how they believe we, as a company, areresponding to the pandemic.
The results of these surveys have been encouraging; we scored 8.1 on
Performance Enablement compared to a benchmark of 7, and 8.4 on
Business Continuity compared to a benchmark of 7.7. Furthermore, 86% of
our employees have a feeling of safety. This is giving us confidence in ourability to provide the best service to our customers and partners in these
difficult times.

Word class Workplace
As part of our regular routine, in March 2020 we conducted our Employee
Engagement Survey. Atradius can be very proud of this year’s Employee
Engagement result; it is an all-time high. Overall, Atradius scored not
only higher than the previous survey but also higher than the externalbenchmark on most themes.
Effectory started 15 years ago with mapping and rewarding good employers
and great employership. Based on six elements: employership, company
pride, organisational direction, appreciation, job pride and employing
talent, we were awarded the badge of World-Class Workplace!
Organisations only become a world-class workplace as a result of agood rating from their employees.

Employees’ engagement and commitment has increased and isoutperforming the BM by 9.7% points

engaged +committed

committed

engagednot engaged,
not committedof engaged and/or committed
employees are intent on leaving

45

Even with the
pandemic’s many
downsides, webecame closer as
an Atradius familyboth with ourcustomers, andwith our colleagues
around the world.

Atradius | Consolidated management report

Rethinking the way we work
What is becoming clear is that the changes brought by the pandemic will
have a long-term impact on how we work. With many lessons learned, we
started answering the question “How to facilitate a hybrid workplace?”. We
set up a project to consider the future of our workplace. The project is looking
at different components such as the home set-up of our employees, the joint
workplace in the office, the legislation that we should take into account,and how we can maintain our culture and customer service excellence. In
November, we conducted a survey to invite employees to share their needs
and ideas. Our goal with this project is to ensure that, when the pandemic
ends and everyone can return to the office, our workplace has adapted toeverything we have learned during the pandemic.

Atradius Business transformation - Shaping
Tomorrow Together
To support the Atradius Business Transformation, in 2019 we started
the ongoing initiative Shaping Tomorrow Together; a call to action forour employees. In 2020, we continued emphasising the importance of
demonstrating a growth mindset, being part of the transformation by
developing yourself and the need to embrace new technologies. In thischallenging year we demonstrated the potential we have to adapt quickly to
new situations and to embrace new technologies to deliver our promise to ourcustomers to provide customer service excellence.

Evolving our Culture
To help the company during these challenging and fast changing times westrengthened our culture via evolve+, our multi-year cultural programme.
Evolve+ supports the ongoing Atradius business transformation byprogressively developing our culture. The Evolve+ team organised webinars
with an impressive number of participants; over 1,800 employees participatedin the webinars, one of which was held with the Management Board.
Additionally, the Evolve+ team looked at the most optimal structure of using
collaborative tools. We started a managers team, where Atradius managers
from all over the world have the opportunity to share and connect with eachother and exchange their views on managing during these challenging times.
This new environment also includes a toolbox to help managers in their job.

46

Atradius | Consolidated management report

Development of our people
This year our employees showed their flexibility and adaptability. Working
from home brought a great number of development opportunities. By the
successful launch of Microsoft Teams ™, we saw that our employees are
flexible and willing to adapt to new systems.
The Atradius Academy supports this process. By creating weekly newslettersthat covered topics such as vitality, working remotely and happiness inchallenging times, we strove to create an environment where learning anddevelopment is seen as business as usual. We invested in people by offering
a wide choice of digital development opportunities. Due to working remotely
and not being able to have face-to-face sessions, we adapted and offered
all the activities we planned virtually. All employees did two mandatorye-learning courses “Refresher of the Code of Conduct” and “Sanctions”. Besides
that, all employees have the possibility to have access to all (15,000) coursesof LinkedIn Learning. Our face-to-face management development programs
could not take place. Instead, we were able to transform the program into
different virtual sessions focussed on how to deal with the current challenges.
Last but not least – we are very proud of our people, we feel that we stayed
connected, engaged and motivated and lived our values in order to serve ourcustomers in the best way.

Indicators

2020

2019

2018

2017 2016 (1)

2015

2014

2013

2012

2011

Headcount

3,653

3,692

3,707

3,756

3,758

3,333

3,298

3,257

3,315

3,304

Total average number of employees(full-time equivalent)

3,517

3,538

3,571

3,591

3,584

3,153

3,132

3,132

3,139

3,159

Total year end number of employees(full-time equivalent)

3,503

3,530

3,545

3,596

3,586

3,161

3,139

3,107

3,143

3,149

Retention rate

92.4%

90.3%

91.1%

91.1%

92.3%

92.0%

94.9%

91.4%

92.6%

91.1%

Sick leave

3.3%

3.6%

3.8%

3.1%

2.9%

3.1%

2.8%

3.0%

3.1%

3.4%

Expenses as % of salaries

1.3%

2.0%

2.5%

1.8%

1.7%

1.6%

1.5%

1.2%

1.4%

1.3%

Expenses Education per year end
number of employees(full-time equivalent)(2)

771

999

1,106

1,082

939

986

867

724

781

730

Development and training

(1)
(2)

Including FTEs from Graydon, Iberinform Portugal, Gestifatura and Informes since 2016.
In 2020 due to Covid-19 some education was postponed resulting in lower costs per employee for the year.

47

Atradius | Consolidated management reportManaging Extraordinary
Risks to Secure Future
Financial Stability
As a global insurance company, Atradius
is exposed to many and varied risks
linked both to the nature of its businessand to the external environment.
Atradius classifies its main risk types as insurance, financial and operational.
Insurance risk is predominantly the risk of non-payment by a buyer coveredby a policy (credit insurance) or the risk of non-performance of a customer(bonding). Financial risks arise out of developments in financial markets
and with counterparties - including market risk, credit risk and liquidity
risk. Operational risk means the risk of loss arising from inadequate or failed
internal processes, personnel or systems, or from external events.
The above classification is not exhaustive. Within the above risk types,
Atradius also focuses on Environmental, Social and Governance (commonlyreferred to as ESG) risks. Concepts such as sustainability, integrity,transparency and a responsible attitude to carrying out activities areimportant to the company.
During 2020, Atradius addressed special challenges in all risk types as well as
increasing its focus on ESG issues.

Risk management framework
The boards of the group companies have ultimate responsibility andaccountability for risk management and internal control within theirrespective companies. The Management Board implements and oversees
Atradius group-wide risk governance through the Risk Strategy Management
Board (RSMB) and a number of committees that support and report to
the RSMB. These committees operate in specific risk-related areas suchas underwriting of buyer exposures, country risk, provisioning, asset
composition and investment policy, reinsurance, quantitative modelling,
and approval of new products. In addition, all employees have well-defined
authorities specifying the level of risk they can accept. This frameworkensures that we assume and manage risks in a controlled way, and in linewith the risk appetite of the company. For the description of the main risks
and uncertainties and how these are managed, please refer to Note 4 of theconsolidated financial statements.

48

Atradius | Consolidated management report

Underwriting risk
During 2020, in response to Covid-19 and its economic impacts, Atradiusorganised its commercial and risk underwriting resources to address rapidlychanging circumstances in the geographies and trade sectors in which we
provide services. We proactively took measures to preserve the quality of ourrisk profile. At the same time, we maintained continuous communication with
our stakeholders (customers, brokers, reinsurers, regulators, shareholders)to ensure transparency and to steer as smooth a course as possible throughturbulent conditions.

Operational risk
As with many companies worldwide, Atradius’ operational risk increased in2020. With the coronavirus pandemic causing many employees to be unable
to access our offices, we quickly adapted our remote working solutions to
support worldwide access to our business systems from home such that we
continued to provide best in class customer service throughout the year. At
the same time, we supported our employees to ensure their continued healthand safety. All of this was achieved while stringently adhering to government
guidelines in all of our locations.

Financial risk
Atradius maintains a diversified portfolio of investments, which is closely
monitored and managed according to strategic asset allocation parameters.
The portfolio is very liquid and concentrated around high quality fixedincome assets. Sufficient cash liquidity is maintained for any given momentin time, and can be supported with a credit facility in the unlikely event ofa liquidity crunch. The impact of exchange rate fluctuations is limited asrevenue, expenses, assets and liabilities within our non-Euro operations are
generally denominated in the same currencies.
Credit risk is low as Atradius maintains a highly creditworthy reinsurance
panel. Other sources of credit risk (bank accounts, policyholders) are notmaterial.

Risk and capital
The relationship between risk and capital is fundamental for Atradius.
Understanding how taking risks consumes capital allows management tosteer Atradius and to take strategic decisions with the interdependence ofrisk and capital in mind. These decisions are substantially informed by theoutcomes of Atradius’ internally developed economic capital model. Thismodel contributes to a multitude of risk assessment and measurement
activities and thus enhances Atradius’ ability to monitor and manage risk
levels within the organisation through the allocation of risk-based capital.
In 2020, given the internal model’s ability to react quickly to a changing
portfolio and environment, the internal model was more important thanever in the management of Atradius’ risk profile. It supported Atradiusmanagement in taking appropriate measures while taking into account risk
and capital considerations. In addition, the model continues to be used to
calculate regulatory capital requirements under Solvency II.

49

Atradius | Consolidated management report

Atradius compliance framework
Compliance practices support our business, our reputation and our integrity.
Complying with relevant laws, rules and regulations, and maintaining a highstandard of ethics and integrity, leads to lower operational risk and stablebusiness processes. The Atradius Code of Conduct outlines the basic corporate,
legal and ethical compliance principles and guidelines that apply to all our
employees and that govern the Atradius operations and business conduct.
Employees who have concerns about a (suspected) violation of the Code of
Conduct are encouraged to speak up and share their concerns. The Speak up
Procedure or Policy on Whistle-blowing gives guidance on how to raise thesekinds of concerns in a confidential manner. Additional compliance policies
address specific compliance areas in more detail, and set out the requirements towhich Atradius employees must adhere. These requirements are also included inexisting and new business procedures. For example, the Policy on Customer Due
Diligence and Policy on Sanctions address potential sanctions risks. Atradius has
also implemented a Data Protection Framework, which includes controls, policies
and procedures to comply with the applicable data protection legislation.
The compliance function – led by the Group Compliance Manager- supports
the management of Atradius in meeting its objective of being compliant
with applicable laws, rules and external and internal regulations. The Group
compliance function is responsible for the maintenance and overall effectivenessof the compliance framework and the local compliance function monitors
regulatory and compliance developments at local country level.

Capital management
Atradius seeks to maintain a strong capital position and well-capitalised operating
entities in line with the defined risk appetite. This helps to support the evolution of
our insurance business, withstand financial stress in adverse business and financial
markets, meet our financial obligations and, ultimately, create shareholder value.
Shareholders’ funds and Subordinated debt
Atradius continued to maintain a very strong capital position despite the pressure on
profitability from the disruption to the business and financial markets caused by the
Covid-19 pandemic. Shareholders’ funds at the end of 2020 amounted to EUR 1,913.3
million, a decrease of 4.8% from EUR 2,008.7 million at year-end 2019 reflecting
slower profit generation in 2020 after the record-high 2019 results and subsequent
dividend distribution in early 2020.
Subordinated debt of EUR 325 million (nominal value) at the end of 2020 consistedof subordinated notes of EUR 250 million and a subordinated loan of EUR 75 million(both amounts unchanged versus 2019), which qualify as Tier-2 basic own funds
for Solvency II. For further details, please see Note 16 of the consolidated financial
statements of the Annual Report 2020.
Regulatory capitalAt the end of 2020, Atradius’ companies collectively held a solvency ratio
above 200% (1).
Atradius applies a partial internal model (comprised of an internal model to measure
substantially all underwriting risk exposure and the regulatory Standard Formula
to measure other risk types) to calculate regulatory capital requirements under
Solvency II. For further details on the main Solvency II regulatory capitalrequirements, please see the Solvency and Financial Condition Reports of Atradius’
European regulated entities.
(1)

Subject to finalisation of any audit procedures.

50

Atradius | Consolidated management report

Environmental,
Social and Governance
Sustainability
We aim to manage the ethical,
environmental, social and governancerisks of the way we do business
Environmental, Social and Governance Sustainability is embedded in our culture
and our day-to-day operations. We recognise the intrinsic value of insurance,
which contributes to the welfare of society by offering companies and theirpeople protection from risks they face in their activities.
Managing risk enables trade, which is essential for economic development.
It helps companies grow, thereby creating long-term value. We follow the
principles of responsibility, ethics, transparency and commitment to the law inall our activities, and try to maximise the creation of sustainable social value forstakeholders across the globe. We will minimise and, if possible, prevent potential
negative impacts on social and environmental matters arising from our activities,
by taking pro-active measures. It is in the interest of our stakeholders andourselves to safeguard our reputation and, where possible, improve it further.

Atradius and Environmental, Social and Governance(ESG) Sustainability
As a responsible global company, we aim to manage the ethical, environmental
and social risks of the way we do business. While endeavouring to make a valuable
contribution to successful world trade and our customers’ prosperity, we incorporate
environmental aspects in our value chain and acknowledge our responsibility on
human rights across our operations. The same goes for our relationships with our
suppliers and associates as well as communities in which we operate. As we want totake our responsibility in helping secure growth opportunities for future generations
and carefully look after the planet we live on, Atradius continues to support andimplement the ten principles of the United Nations Global Compact (UNGC) on
human rights, labour conditions, the environment and anti-corruption. Every year
we provide an update on the progress we have made. Our ESG Sustainability Policy
is managed by the ESG Sustainability Team, which is joined by representatives fromoffices all over the world. The team coordinates group activities and addresses issues
identified as most material by our stakeholders.
The ESG Sustainability team of Atradius evaluates the effectiveness of the company’s
ESG Sustainability Policy and suggests improvements to the Management Board
when applicable. The ESG Sustainability Policy of Atradius is in line with the ESG
Sustainability Plan of Grupo Catalana Occidente (GCO), our parent company.

51

Atradius | Consolidated management report

Renewed commitment and amplified ambitions to
ESG Sustainability
During 2020 we further strengthened their commitment to ethical,
environmental, social and governance topics by building a Sustainability
and Corporate Responsibility project called ‘Environmental, Social andGovernance (ESG)’. This project builds on what we have already achieved over
the years and takes our commitment to the next level by bringing together
senior executives and all of the units in both organisations to contribute as awhole organisation.
ESG is classified as a group programme and has a wider scope and ambition,
which will provide even more benefits to aspects of ESG. Therefore, the titleof the Corporate Social Responsibility chapter in our annual report has beenchanged to Environmental, Social and Governance (ESG) Sustainability toreflect the renewed ambition, as well as its wider scope and involvement.
In 2020, we also established the Group Sustainability Committee to guideand support our ambitions on a senior level. The Sustainability Committee
has consulting and decision-making duties in relation to the development ofsustainability and embedding it in the group’s strategy.
The Sustainability Committee has agreed on an updated three-year Master
Plan (2020-2023) and a set of actions for 2020. This master plan builds on theprevious one by adding new topics, ideas, insights and actions. It also includes
areas that have already been addressed as business as usual but not directly
linked to the master plan (e.g. digitalisation and Omni-channel, innovationand ESG risk management where Atradius has already been active for many
years).
The Sustainability Master Plan goals are:i.	Offer a common working framework in the sustainability area for theentities that are part of Grupo Catalana Occidente, including Atradius.
ii.	Promote those lines of work on sustainability that support the basic pillarsof the Group’s strategy and respond to the challenges, both those of thesector and those specific to Grupo Catalana Occidente and Atradius.
iii. 	Progress in the commitments taken on with the stakeholders in the
Corporate Responsibility Policy.
iv. Establish a work agenda to continue to promote sustainability for theperiod 2020-2023 and define responsibilities.
v. Manage the material issues identified.
The Sustainability Committee meets every quarter to discuss the progress andachievements in ESG Sustainability areas.
A few examples of ESG Sustainability initiatives that Atradius has undertaken
are; creation of a ‘Group HR Policy’ and a ‘Group Human Rights Policy’, theCorporate Social Responsibility Tribe to increase awareness within theorganisation through engagement and webinars, and an investigation ofwhether there is a need/demand from our customers for a ‘sustainable’
product.
The infographic below represents the areas in scope and how the Master Planis linked to our strategic pillars of Growth, Profitability and Solvency.

52

Managing risk
enables trade,which is essential
for economic
development. It
helps companies
grow, thereby
creating long-termvalue.

Sustainability Master Plan 2020-2023
Sustainability Master Plan 2020-2023

Technologicalevolution
Data protection

GCO Challenges

Coexistence ofgenerations
Foster andarticulate
communication
Responding toinvestorrequirements

Action lines

Sectorial challenges

Adaptation to
demandExcellence inservice

Positive
ImpactTrust

Digitisation andOmni-channel

Environmental
Management

Customerexperience

Innovation

Formalising
investment insociety andvolunteering

ESG riskmanagement

Sustainable ﬁnance
Responsible
ESG Products
Investment
Communication and Stakeholder Relations
Ethics and integrity

GrowthProﬁtability

Solvency

Supporting GCO's strategic pillars

Our success and achievements in ESG Sustainability areas in the past years
combined with the new ESG Project will accelerate our ESG approach,ambition and achievements.

53

Fulﬁlling the commitments made with Stakeholders

Strategic axes

Regulatorychanges

Employees

Customers
Shareholders
and investors

Intermediaries

Associates
and suppliers

SocietyNew. Notcovered by the
Master Plan
2019-2021

Impulsetowards thedesiredsituation:
Grupo Catalana
Occidente wants tobe a reference ingood governanceand responsible
management in
the insurance
sector, recognisedby its values andits commitment tostakeholders

Update of aspects
already
contemplated in
the Master Plan
2019-2021

Atradius | Consolidated management report

Our compliance with the UN Global Compact
Environmental KPIs (1)

2020

2019

2020/2019

KPI

Total

Total

ChangeNumber of reporting countries

32

32

-

Number of offices

98

99

decrease

103,013

102,629

increase

Electricity from non-renewable source (kWh)5,253,779

7,037,424

decrease

Electricity from renewable source (kWh)1,657,669

2,874,299

decrease

Total office space (m2)Energy (gas & electricity) usage% of renewable electricity

24.0%

29.0%

decrease

6,911,448

9,911,723

decrease

281,909401,971

decrease

9,396,758

13,455,503

decrease

Employee air travel (km)2,321,249

15,050,653

decrease

Employee rail travel (km)711,238

2,648,104

decrease

Total electricity (kWh)Gas (m3)
Total energy
TravelCompany lease car travel (km)6,331,731

9,168,351

decrease

Total travel (km)9,364,218

26,867,108

decrease

Energy (CO2)

4,466

6,578

decrease

Travel (CO2)

2,176

7,290

decrease

Total (CO2)6,642

13,868decrease

Non-recycled paper (sheets A4)

7,712,722

11,823,839

decrease

Recycled paper (sheets A4)

1,170,872

3,876,649

decrease

CO2 footprint (tonnes of CO2)Paper used

% recycled paper
Total paper
Water usage (m3)

13.2%

24.7%

decrease

8,883,594

15,700,488

decrease

26,46938,480decrease

4.4

5.7

decrease

556.0

688.0

decrease

560.4

693.7

decrease

Waste -per type
Hazardous waste (tonnes)
Non-hazardous waste (tonnes)(2)

Total waste(1)(2)

This table does not include information from Graydon, Gestifatura, Informes Mexico and Iberinform Portugal.
Due to Covid-19 almost all figures were lower in 2020 than they would be normally.

54

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2019 Atradius N.V.

Consolidated financial statements 2019
Contents
Consolidated
2
Consolidated financial
financial statements
statements .....................................................................................................................................................................
..................................................................................................................................................................56

Notes to the consolidated financial statements ............................................................................................................................................. 6
Notes
21

General information......................................................................................................................................................................................61
Summaryof significant
accounting policies ........................................................................................................................................... 6

32

Summaryof significant
accounting
policies ........................................................................................................................................61
Criticalaccounting
estimatesand judgements
in applying accounting policies..................................................................... 25

43

Criticalestimates ....................................................................................................................................................................
and judgements in applying accounting policies .................................................................... 27
78
Risk
andaccounting
capital management

54
65

Risk andinformation....................................................................................................................................................................................
capital management ..................................................................................................................................................................80
Segment
47
Segment
information.
.
...............................................................................................................................................................................102
Intangible assets ............................................................................................................................................................................................. 51

Intangible
assets..........................................................................................................................................................................................106
76 Property,
plant
and
equipment & investment property................................................................................................................... 53
7 Property, plant and equipment & investment property.................................................................................................................109
8 Subsidiaries ..................................................................................................................................................................................................... 56
8 Subsidiaries ....................................................................................................................................................................................................112
9 Investments in associated companies .................................................................................................................................................... 56
9 Investments in associated companies ..................................................................................................................................................112
10 Financial investments.................................................................................................................................................................................. 59
10 Financial investments ................................................................................................................................................................................115
11 Receivables ....................................................................................................................................................................................................... 59
11 Receivables .....................................................................................................................................................................................................115
12 Deferred acquisition costs........................................................................................................................................................................... 60
12 Deferred acquisition costs .........................................................................................................................................................................116
13 Other assets and accruals ............................................................................................................................................................................ 60
13 Miscellaneous assets and accruals .........................................................................................................................................................116
14 Cash and cash equivalents ........................................................................................................................................................................... 61
14 Cash and cash equivalents ........................................................................................................................................................................ 117
15 Capital and reserves ....................................................................................................................................................................................... 61
15 Capital and reserves .................................................................................................................................................................................... 117
16 Subordinated debt ......................................................................................................................................................................................... 63
16 Subordinated debt .......................................................................................................................................................................................119
17 Employee benefit assets and liabilities .................................................................................................................................................. 63
17 Employee benefit assets and liabilities ................................................................................................................................................119
18 Insurance contracts ....................................................................................................................................................................................... 69
18 Insurance contracts .................................................................................................................................................................................... 125
19
provisions..............................................................................................................................................................................................129
73
19 Other
Provisions......................................................................................................................................................................................................
2074
20 DeferredDeferred andand current
current income
income tax
tax ............................................................................................................................................................
.......................................................................................................................................................... 129
21
21 Payables
Payables.............................................................................................................................................................................................................76......................................................................................................................................................................................................... 132
22
22 Other
Other liabilities
liabilities................................................................................................................................................................................................76............................................................................................................................................................................................ 132
2377
23 NetNet premium
premium earned
earned.....................................................................................................................................................................................
.................................................................................................................................................................................. 133
2477
24 Service
Service andand otherother income
income............................................................................................................................................................................
......................................................................................................................................................................... 133

25 Net
Net income
income fromfrom investments
investments ...................................................................................................................................................................79................................................................................................................................................................ 134
25
26 Insurance
Insurance claims
claims ............................................................................................................................................................................................
......................................................................................................................................................................................... 135
2681
27 NetNetoperating
operatingexpenses
expenses................................................................................................................................................................................
............................................................................................................................................................................ 135
27
81
28 Finance
Finance expenses
expenses..........................................................................................................................................................................................
........................................................................................................................................................................................ 136
28
82
29 Income
Income tax
tax.......................................................................................................................................................................................................
..................................................................................................................................................................................................... 136
2982
30 Dividends
Dividends perper shareshare .....................................................................................................................................................................................
....................................................................................................................................................................................13730
83
31 Assets
Assetsnot
notfreely
freelydisposabledisposable.......................................................................................................................................................................
.....................................................................................................................................................................137
31
83
32 Capital commitments and contingencies ............................................................................................................................................137
32 Capital commitments and contingencies .............................................................................................................................................. 83
33 Personnel ........................................................................................................................................................................................................137
33 Personnel ......................................................................................................................................................................................................... 83
34 Related party transactions ....................................................................................................................................................................... 138
34 Related party transactions ......................................................................................................................................................................... 83
35 Events after the reporting period .......................................................................................................................................................... 139
35 Events after the reporting period ............................................................................................................................................................ 85

55

All
All amounts
amounts inin thousands
thousands ofof Euro,Euro, unlessunless otherwise
otherwise statedstatedConsolidated financial
statements
Consolidated statement of financial position
AssetsNote

31.12.2020

31.12.2019

Intangible assets

6

258,858

257,701

Property, plant and equipment

7

200,827

210,051

Investment property

726,413

13,988Investments in associated companies

962,816

63,110Financial investments

10

2,678,826

2,589,165

Reinsurance contracts

18

850,505

611,602

Deferred income tax assets

20

52,43435,615Current income tax assets

20

35,42040,889Receivables

11

245,004

239,565

Accounts receivable on insurance and reinsurance business

173,057

192,782

Other accounts receivable

71,947

46,783

Other assets

544,404

601,443

Deferred acquisition costs

12

68,96876,300

Other assets and accruals

13475,436

525,143

Cash and cash equivalents

14424,741404,244

5,380,248

5,067,373

1,913,294

2,008,726

Total
EquityCapital and reserves attributable to the owners of the Company

15

Non-controlling interests
Total

-

-

1,913,294

2,008,726

Liabilities
Subordinated debt

16

324,177

323,982

Employee benefit liabilities

17

139,720

124,884

Insurance contracts

18

1,902,726

1,706,229

Other provisions

19

5,496

2,620

Deferred income tax liabilities

20

84,291

103,509

Current income tax liabilities

20

46,71038,747

Payables21

378,595

178,682

310,549

122,186

Accounts payable on insurance and reinsurance business
Trade and other accounts payable

68,04656,496

Other liabilities

22585,239

579,994

Borrowings

14

-

-

Total

3,466,954

3,058,647

Total equity and liabilities

5,380,248

5,067,373

2

56

Atradius | Consolidated
Consolidated financial
financial statements
statements 2020
2020Atradius
AtradiusN.V.
N.V.

Consolidated income
statement
Note

2020

2019
1,759,523

Insurance premium revenue

23

1,727,410

Insurance premium ceded to reinsurers

23(899,360)(685,288)

828,050

1,074,235

Net premium earned
Service and other income

24251,998

252,497

Share of income/ (losses) of associated companies

25

3,008

(1,093)

Net income from investments

25

Total income after reinsurance

11,314

18,776

1,094,370

1,344,415

Insurance claims and loss adjustment expenses

26(1,087,540)(892,311)

Insurance claims and loss adjustment expenses recovered from reinsurers

26

552,538

370,095(535,002)(522,216)(465,881)(479,103)(1,000,883)(1,001,319)

93,487343,096

Net insurance claims
Net operating expenses

27

Total expenses after reinsurance
Operating result before finance costs
Finance income

2,608

2,629

(18,089)(32,887)

78,006

312,838(33,839)(85,130)

44,167

227,708

Owners of the Company

44,167

227,708

Non-controlling interests--

Total result for the year

44,167

227,708

Finance expenses

28

Result for the year before tax
Income tax expense

29

Result for the year
Attributable to:

3

57

All
All amounts
amounts inin thousands
thousands ofof Euro,Euro, unlessunless otherwise
otherwise statedstatedConsolidated statement ofcomprehensive income
2020

2019

44,167

227,708(11,868)(21,023)

5,852

4,829

(6,113)75,516--(31,447)

11,723

Income tax relating to items that may be reclassified

6,835(19,682)

Other comprehensive income for the year, net of tax(36,741)

51,3637,426

279,070

7,426

279,070

-

-

7,426

279,070

Note
Result for the year
Other comprehensive income:Items that will not be reclassified to the income statement:
Actuarial gains/(losses) on defined benefit pension plans

15.5

Income tax relating to items that will not be reclassified
Items that may be subsequently reclassified to the income statement:
Net fair value gains/(losses) on available-for-sale financial investments

15.3

Share of other comprehensive income of associated companies
Exchange gains/(losses) on translating foreign operations and associatedcompanies

Total comprehensive income for the year

15.4

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

458

Atradius| |Consolidated
Consolidatedfinancial
financialstatements
statements
2020
Atradius
N.V.
Atradius
2020
Atradius
N.V.

Consolidated statement ofchanges in equity
Attributable to the owners of the Company
Note
Balance at 1 January
2019
Acquisitions
Dividends

30

Total comprehensive
income for the year
Appropriation of prioryear result
Result for the year
Other comprehensive
incomeBalance at 31 December
2019

Balance at 1 January
2020
Acquisitions
Dividends
Total comprehensive
income for the year
Appropriation of prioryear result
Result for the year
Other comprehensive
incomeBalance at 31 December
2020

30

Share
capitalSharepremium
reserve

Revaluation
reserve

Currencytranslation
reserve

Pensionreserve

Retainedearnings

Result for
the year

Total

Noncontrollinginterests

Total
equity79,122

639,228

25,508(61,518)(144,397)

1,080,824

202,638

-

-

-

-

-

33

-

1,821,405

33

1,821,438

33

(33)

-

-

-

-

-

-

(91,782) -(91,782)-(91,782)--

56,411

11,146(16,194)

202,638

25,070279,070-279,070

-

-

-

-

-

202,638(202,638)

-

-

-

-

-

-

-

-

-

227,708

227,708

79,122

639,228

56,411
81,919

11,146(50,372)(16,194)(160,591)

1,191,712

227,708

51,363
2,008,726

79,122

639,228--

81,919(50,372)(160,591)

1,191,712

227,708

-

-

-

-

-

-

-

-

-

(102,859)--(1,108)(29,617)(6,016)

-

-

-

-

-

-

-

-

79,122

639,228(1,108)80,811(29,617)(79,989)5

59

227,708-

51,363
2,008,726

2,008,726-

2,008,726

-

-

-

-

(102,859)-(102,859)

227,708(183,541)

7,426

-

7,426

-

227,708-(227,708)
44,16744,167-(6,016)(166,607)

1,316,561

44,167(36,741)
1,913,294-

44,167(36,741)
1,913,294

Allotherwise statedstatedAll amounts
amounts inin thousands
thousands ofof Euro,Euro, unlessunless otherwise

Consolidated statement ofcash flows
I. Cash flows from operating activities
Result for the year before tax
Adjustments for:Realised capital (gains)/losses on investments
Dividends received from financial investments
Impairment loss
Share of income of associated companies
Depreciation and amortisation
Interest expense on subordinated debt
Net interest income
Other non-cash items
Changes in operational assets and liabilities:
Insurance contracts
Reinsurance contracts
Deferred acquisition costs
Accounts receivable and payable on insurance and reinsurance businessChanges in other assets and liabilities
Pensions and other long-term employee benefit net contributions
Cash generated from operations
Income tax paid
Interest paid
Net cash (used in)/generated by operating activities
II. Cash flows from investing activities
Investments and acquisitions (cash outflows):
Short-term investments
Financial investments available-for-sale
Property, plant and equipment and intangible assets
Divestments, redemptions and disposals (cash inflows):
Investment property
Short-term investments
Financial investments available-for-sale
Property, plant and equipment and intangible assets
Dividends received from financial investments
Interest received
Net cash (used in)/generated by investing activities

No
te

9
28

18
18
12

10

10

III. Cash flows from financing activities
Dividend paid
Interest paid on subordinated debt
Net cash (used in)/generated by financing activities

30

Changes in cash and cash equivalents (I + II + III)
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
The cash and cash equivalents are presented net of bank overdrafts (see Note 14).

6

60

14

2020

2019

78,006

312,838(4,599)(8,172)
27,201(3,008)46,42917,081(31,261)
14,572(1,560)(9,431)
17,079(7,126)
68,467
17,077(35,518)
14,430196,497(238,903)
7,332
208,088
93,923(27,285)
375,901(47,966)(18,452)
309,483

86,359(13,886)(4,557)(42,896)
19,086(31,863)
388,500(98,605)(18,675)
271,220(112,147)(1,071,612)(55,756)(251,486)(981,753)(56,413)263
137,970
896,739
68
8,172
35,398(160,905)

882
359,608
678,598
54
9,431
37,078(204,001)(102,859)(16,875)(119,734)(91,782)(16,875)(108,657)

28,765404,244(8,268)424,741(41,438)
446,021(339)
404,244Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

Notes to the consolidated financial statements
1

General information

Atradius N.V. (‘the Company’), with its office at David Ricardostraat 1, 1066 JS, Amsterdam, the Netherlands, and its
subsidiaries (together referred to as ‘Atradius’) is a global credit insurer and aims to support its customers’ growth bystrengthening their credit and cash management through a wide range of credit insurance management products andservices. These services include credit insurance, bonding, reinsurance, information services, collection services andinstalment credit protection. Atradius offers products and services from strategically located offices on six continents
and employed 3,653 people as at 31 December 2020 (2019: 3,692). The parent is Grupo Compañía Española de Crédito
y Caución, S.L., which owns 64.23% (equal to 2019) of the shares in Atradius N.V. The ultimate parent and the ultimate
controlling party of Atradius is Grupo Catalana Occidente, S.A., which holds 73.84% of the shares in Grupo Compañía
Española de Crédito y Caución, S.L. and 35.77% (equal to 2019) of the shares in Atradius N.V. The financial statementsof Atradius N.V. are consolidated within Grupo Catalana Occidente, S.A., which is a listed company in Spain.
The Atradius consolidated financial statements have been authorised for issue by the Management Board on 3 March
2021 and have been reviewed by the Supervisory Board. On 3 March 2021 the consolidated financial statements havebeen adopted at the Annual General Meeting of Atradius N.V.

2

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all financial years presented, unless otherwise stated.

2.1

Basis of preparation

The Atradius consolidated financial statements are prepared in accordance with International Financial ReportingStandards (IFRS) as adopted by the European Union and also comply with Part 9 of Book 2 of the Dutch Civil Code.
These have been prepared under the historical cost convention as modified by the revaluation of available-for-salefinancial investments.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Atradius accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements, are disclosed in Note 3.
The income statement of Atradius N.V. for 2020 is incorporated in the consolidated financial statements, which allow
for a presentation of a condensed company income statement in the company financial statements in compliance withBook 2, Article 402 of the Dutch Civil Code.
All amounts in the notes are shown in thousands of Euro (EUR), rounded to the nearest thousand, unless otherwise
stated.
Due to rounding, numbers presented throughout this, and other documents, may not add up precisely to the totals
provided.

2.2

New and revised standards

All changes in the accounting policies have been made in accordance with the transitional provisions in the respective
standards. All standards and amendments adopted by Atradius require retrospective application.

2.2.1

Standards, amendments and interpretations effective in 2020

The following relevant standards, amendments and interpretations have been adopted in 2020, but have had nomaterial effect on the consolidated financial statements:-

Amendments to IFRS 9, IAS 39 and IFRS 7 relating to the Interest Rate Benchmark Reform (effective 1 January2020). The amendments provide temporary relief for hedge relationships and its accounting during the
replacement process of benchmark interest rates (phase 1). Remaining issues will be addressed once the existing
7

61

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

-

-

-

interest rates have been replaced. These amendments have no material impact on the consolidated financial
statements.
Amendments to IAS 1 and IAS 8; Definition of Material (effective 1 January 2020) clarifies the definition ofmaterial and what should be considered when the definition of materiality is applied. These amendments have nomaterial impact on the consolidated financial statements.
Amendments to IFRS 3 Business Combinations (effective 1 January 2020). The amendments clarify the definitionof a business, with the objective of assisting entities to determine whether a transaction should be accounted for
as a business combination or as an asset acquisition. This standard has no material impact on the consolidated
financial statements.
Amendment to IFRS 16 for Covid-19-related rent concessions. The amendment permits lessees, as a practical
expedient, not to assess whether particular Covid-19-related rent concessions are lease modifications. Instead,lessees that apply the practical expedient may account for those rent concessions as if they were not leasemodifications. This amendment has no material impact on the consolidated financial statements.

2.2.2

Standards, amendments and interpretations not yet adopted

The following relevant standards and amendments are effective for annual periods beginning after 31 December 2020and have not been early adopted by Atradius:---

IFRS 9 Financial Instruments (effective 1 January 2018) replaces the existing guidance in IAS 39 Financial
Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification andmeasurement, impairment of financial instruments and the new general hedge accounting requirements. In
September 2016, the IASB issued amendments to IFRS 4 to address issues arising from the different effective
dates of IFRS 9 and the forthcoming new insurance contracts standard (IFRS 17). The amendments introduce twoalternative options for entities that issue insurance contracts within the scope of IFRS 4: a temporary exemption
from applying IFRS 9 and an overlay approach. The temporary exemption is available for entities whose activities
are predominantly connected with insurance.
Atradius performed an assessment of the amendments to IFRS 4 and concluded that its activities are
predominantly connected with insurance as at 31 December 2015 based on the assessment that the predominanceratio i.e. ratio total carrying amount of its liabilities connected with insurance compared with total carrying
amount of liabilities criteria was greater than 90%. Atradius decided to apply the temporary exemption in its
reporting period starting on 1 January 2018 and expects to adopt IFRS 9 in combination with the adoption of IFRS
17 Insurance contracts on 1 January 2023. In case of a significant change in operating activities, Atradius willreassess whether its activities are predominantly connected with insurance. Please refer to the ‘Temporary
exemption from IFRS 9’ section included in Risk and Capital management for the related disclosures.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 (effective 1
January 2021). The amendments ensure that companies will not have to derecognise or adjust carrying amountsof financial instruments for changes required by the reform, will not have to discontinue existing hedge
relationships solely because it makes changes required by the reform and will be required to disclose information
about new risks arising from the reform and how it manages transition to alternative benchmark rates. In theabsence of any hedge relationships it is expected that these amendments will not have a material impact on the
consolidated financial statements.

The European Union has not yet endorsed the following relevant standards and amendments and as such these havenot been adopted by Atradius:-

IFRS 17 Insurance contracts (effective 1 January 2023). In November 2018, the IASB agreed to start the process toamend IFRS 17 to defer the mandatory effective date of IFRS 17 (original effective date was January 1, 2021).
Subject to IASB due process, entities will be required to apply IFRS 17 for annual periods beginning on or afterJanuary 1, 2023. The standard replaces the existing guidance in IFRS 4 Insurance contracts. IFRS 17 aims toprovide a more useful and consistent accounting model among entities issuing insurance contracts. Under IFRS
17, the general model requires entities to measure an insurance contract at initial recognition at the total of thefulfilment cash flows (comprising the estimated future cash flows, an adjustment to reflect the time value ofmoney and an explicit risk adjustment for non-financial risk) and the contractual service margin. The fulfilment
cash flows are remeasured on a current basis each reporting period. The unearned profit (contractual service
margin) is recognised over the coverage period. Aside from this general model, the standard provides, as asimplification, the premium allocation approach. This simplified approach is applicable for certain types ofcontract, including those with a coverage period of one year or less. For insurance contracts with direct
participation features, the variable fee approach applies, however this is not applicable for Atradius as these typesof contracts are not underwritten. Atradius is currently assessing the impact of the standard on the consolidated
862

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

-

-

-

-

financial statements, including which measurement model should be applied to which products, credit insurance,
bonding, instalment credit protection (ICP), assumed business and reinsurance held and how the requirementswith regards to the level of aggregation should be applied. The impact assessment also includes the transition
requirements. The standard can be applied retrospectively in accordance with IAS 8, but it also contains a‘modified retrospective approach’ and a ‘fair value approach’ for transition depending on the availability of data.
Atradius will most likely apply a blend of transition approaches. Although the impact on the consolidated
financial statements is expected to be material in terms of recognition, measurement and on the presentation anddisclosures in the consolidated financial statements, no further details can be provided yet.
Amendments to IFRS 3 Business Combinations (effective 1 January 2022). The IASB has updated references in
IFRS 3 to the Conceptual Framework without changing any of the accounting requirements. These amendments
will not have a material impact on the consolidated financial statements.
Amendments to IAS 16 Property, Plant and Equipment (effective 1 January 2022). The amendments prohibit
deducting from cost of property, plant and equipment amounts received from selling items produced while thecompany is preparing the asset for its intended use and requires it to recognise the amounts received as sales
proceeds and related costs in profit or loss. It is expected that these amendments will not have a material impact
on the consolidated financial statements.
Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets (effective 1 January 2022). These
amendments require a company to include both incremental costs as well as an allocation of other costs offulfilling a contract when assessing whether that contract will be loss-making. It is not expected that theseamendments will have a material impact on the consolidated financial statements.
Annual Improvements 2018-2020 (effective 1 January 2022). The annual improvements make minor
amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial
Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases. These amendments
will not have a material impact on the consolidated financial statements

2.3

Consolidation

The following principles of consolidation and measurement are applied to the financial statements:

2.3.1

Subsidiaries

Subsidiaries are all entities over which Atradius has control. Atradius controls an entity when it is exposed to, or has
rights to variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to Atradius.
They are de-consolidated from the date on which control ceases.
Intragroup transactions, balances and unrealised gains on intragroup transactions are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Subsidiaries’
accounting policies are changed where necessary to ensure consistency with the policies adopted by Atradius except
for the accounting for insurance contracts (see Note 2.17).
When the group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any
related Non-controlling Interest (Minority-interest) (further referred to as ‘non-controlling interest’) and othercomponents of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former
subsidiary is measured at fair value when control is lost.

2.3.2

Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a businesscombination is measured at fair value, which is calculated as the sum of fair values of the assets (at the acquisitiondate) transferred to Atradius, liabilities incurred by Atradius to the former owners of the acquiree and the equity
interests issued by Atradius in exchange for control of the acquiree. Acquisition-related costs are generally recognisedin the income statement as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value atthe acquisition date, except that the deferred tax assets or liabilities and assets or liabilities related to employee
benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee
Benefits respectively.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any)
963All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedover the net amount of the identifiable assets acquired and the liabilities assumed. If the net amount of the identifiable
assets acquired and the liabilities assumed exceed the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree and the fair value of Atradius’ previously held equity interest in the acquiree (ifany), then the excess is recognised immediately in profit or loss as a bargain purchase.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of theentity’s net assets in the event of liquidation, may be initially measured either at fair value or at the non-controllinginterests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice ofmeasurement method is made on a transaction-by-transaction basis. Other types of non-controlling interests aremeasured at fair value or, when applicable, on the basis specified in another IFRS.
When the consideration transferred by Atradius in a business combination includes assets or liabilities resulting froma contingent consideration arrangement, the contingent consideration is measured at the fair value and included in
the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that
qualify as measurement period adjustments, are adjusted retrospectively, with a corresponding adjustment togoodwill. Measurement period adjustments are adjustments that arise from additional information obtained during
the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstancesthat existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. A contingent
consideration that is classified as equity is not re-measured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. A contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39 Financial Instruments: Recognition andMeasurement or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with thecorresponding gain or loss being recognised in profit or loss.
When a business combination is achieved in stages, Atradius’ previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e., the date when Atradius obtains control) and the resulting gain or
loss, if any, is recognised in the income statement. Amounts arising from interests in the acquiree before theacquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss
where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, Atradius reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities arerecognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that,
if known, would have affected the amounts recognised at that date.

2.3.3

Associated companies

Associated companies are entities in which Atradius has significant influence, but not control or joint control, over thefinancial and operating policies, generally accompanying a shareholding of between 20% and 50% of the voting rights.
Interests in associates are initially recognised at cost, which includes positive goodwill arising on acquisition. Negative
goodwill is recognised in the income statement on the acquisition date. If associates are obtained in successive sharepurchases, each significant transaction is accounted for separately.
Atradius’ share in its associated companies’ post-acquisition profits or losses is recognised in profit or loss, and its
share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income.
Unrealised gains on transactions between Atradius and its associated companies are eliminated to the extent of
Atradius’ interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence ofan impairment of the asset transferred. Associate’s accounting policies are changed where necessary to ensure
consistency with the policies adopted by Atradius.
Interests in companies in which Atradius does not exercise significant influence are accounted for at fair value, in
accordance with the accounting principles for available-for-sale investments.

1064Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

2.4

Segment reporting

IFRS 8 requires operating segments to be identified on the basis on which the Management Board regularly reviews
components of Atradius in order to allocate resources to the segments and to assess their performance. Operating
segments are reported in a manner consistent with the internal reporting provided to the Management Board. For
more information related segment please see note 5.

2.5

Foreign currencies

2.5.1

Functional and presentation currency

Items included in the financial statements of each of Atradius’ entities/branches are measured using the currency ofthe primary economic environment in which the entities/branches operate (the ‘functional currency’).
All amounts in the notes are shown in thousands of Euro (EUR)

2.5.2

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at thedates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions andfrom the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement. A monetary item that forms part of a net investment in a foreign operation forwhich settlement is neither planned nor likely to occur in the foreseeable future is, in substance, part of the net
investment in that foreign operation. In the consolidated financial statements, the related exchange gains and losseson these monetary items are recognised in other comprehensive income.
Translation differences on non-monetary items, such as equities classified as available-for-sale financial investments,
are included in the revaluation reserve through other comprehensive income.

2.5.3

Atradius companies

The results and financial position of all Atradius entities that have a functional currency different from thepresentation currency are translated into the presentation currency as follows:--

assets and liabilities for each statement of financial position presented are translated at the closing
exchange rate at the date of that statement of financial position;
income and expenses for each income statement presented are translated at monthly average exchange
rates unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at exchange rates
at the dates of the transactions; andall resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities and ofborrowings are taken to other comprehensive income. When a foreign operation is sold, such exchange differences arerecognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as the foreign entity’s
assets and liabilities and are translated at the closing rate.
The exchange rates of the most relevant functional currencies for Atradius are presented below:
Currency

End rate

Average rate

GBP

USD

AUD

GBP

USD

AUD

At 31 December 2020

1.112

0.815

0.629

1.113

0.835

0.616

At 31 December 2019

1.175

0.890

0.625

1.173

0.911

0.616

11
65

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

2.6

Goodwill and other intangible assets

2.6.1

Goodwill

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controllinginterests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any)over the net amount of the identifiable assets acquired and the liabilities assumed. If the net amount of the identifiable
assets acquired and the liabilities assumed exceed the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree and the fair value of Atradius’ previously held equity interest in the acquiree (ifany), then the excess is recognised immediately in profit or loss as a bargain purchase. Goodwill arising on an
acquisition of a business is carried at cost as established at the date of acquisition of the business (see Note 2.3.2) lessaccumulated impairment losses, if any. On disposal of a subsidiary, the attributable amount of goodwill is included in
the determination of the profit or loss on disposal.
For the purpose of impairment testing, goodwill is allocated to Atradius’ relevant cash-generating units. The CGU’s
where Goodwill is allocated are the lowest identifiable level possible. Cash-generating units to which goodwill has
been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be
impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, theimpairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to theother assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. An impairment loss
recognised for goodwill is not reversed in a subsequent period.
Goodwill on the acquisitions of associated companies is included as part of investments in associated companies.
For more information related intangibles please see note 6.

2.6.2

SoftwareAcquired computer software licenses are capitalised on the basis of costs incurred to acquire and to bring to use thespecific software. These assets are amortised on the basis of the expected useful life: which is between three and five
years. Computer software is stated at cost less accumulated amortisation and any accumulated impairment losses.
Costs that are directly associated with the production of identifiable and unique software products controlled by
Atradius, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as
intangible assets. Direct costs include the software development team’s employee costs and an appropriate portion of
relevant overhead. All other costs associated with developing or maintaining computer software programmes arerecognised as an expense as incurred. Computer software development costs recognised as assets are amortised using
the straight-line amortisation method over its estimated economic useful lives: in general, not exceeding a period offive years. Majority of capitalised software developed for strategic business developments has a useful life of 10 years.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic
benefits embedded in the specific assets to which it relates. All other expenditure is expensed as incurred.

2.6.3

Other intangible assets

Other intangible assets are recognised at fair value at the acquisition date. Amortisation charges are included in net
operating expenses and are calculated using the straight-line method over the expected life of the asset which isestimated to be between 5 and 15 years. Other intangible assets relate to agent networks, non-patented technology,
trade names and insurance.
For more information related intangibles please see note 6.

2.7

Property, plant and equipment

Land and buildings comprise offices occupied by Atradius (‘property for own use’). Land and buildings are stated at
the cost of acquisition or construction, less any subsequent accumulated depreciation and subsequent accumulated
impairment losses. For analysis of the residual value, the fair value is assessed based on active market prices, adjusted
if necessary, for any difference in the nature, location or condition. All other property, plant and equipment are statedat historical cost less accumulated depreciation and subsequent impairment losses.

1266

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to Atradius and the cost of theitem can be reliably measured. All other repairs and maintenance are recognised as an expense in the income
statement during the financial period in which they are incurred.
Some of Atradius’ properties comprise a part that is held as investment property to earn rentals or for capital
appreciation and another part that is held for own use. If these parts could be sold separately or leased out separately
under a financial lease, Atradius accounts for the parts separately as investment property and property for own use,
respectively.
The depreciation period is based on the estimated economic useful life of the asset. Leasehold improvements are
depreciated over the shorter of the estimated useful life of the improvements and the respective lease terms. Land is
not depreciated. All other assets are depreciated using the straight-line depreciation method over the estimatedeconomic useful lives: buildings over 50 years, fixtures and fittings over 3-10 years and information systems
hardware over 3-5 years.

2.7.1

Leased property, plant and equipment

At inception of a contract, Atradius assesses whether it is a lease. A contract is a lease if it involves the use of an
identified asset and conveys the right to control the use the asset for a period of time in exchange for consideration –i.e. Atradius has the rights to obtain substantially all of the economic benefits from using the asset, and direct the useof the asset.
As a lessee
A right of use (ROU) asset and a lease liability are recognised at the commencement date of the lease. The ROU asset isinitially measured at cost, which comprises the amount of the lease liability, any lease payments made at or before thecommencement date, any initial direct costs incurred and an estimate of the costs to remove the underlying asset or to
restore the site on which it is located, less any lease incentives received. The lease liability is initially measured at thepresent value of the lease payments to be paid, discounted using the interest rate implicit in the lease or, if that cannot
be readily determined, the Group’s incremental borrowing rate. Atradius generally uses its incremental borrowing
rate as the discount rate that applies to the lease.
Subsequently, the ROU asset is depreciated using the straight-line depreciation method over the shorter of the asset’s
useful life and the lease term. The lease liability is subsequently measured at amortised cost using the effective
interest method. The depreciation expense on the ROU asset and the interest expense on the lease liability areseparately recognised in the income statement.
Atradius presents its ROU assets in ‘property plant and equipment’ and lease liabilities in ‘other liabilities’ in thestatement of financial position.
The Group has chosen to implement IFRS 16, applying the modified retrospective approach. As such, the comparative
information of 2018 is no longer applicable. Atradius has elected not to recognise ROU assets and lease liabilities for
short-term-leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments
associated with these leases are recognised as an expense on a straight-line basis in the income statement.
As a lessor
The Group classifies all leases for which it is a lessor as operating leases, because none of these leases transfer
substantially all of the risks and rewards incidental to ownership of the underlying asset.
Lease payments from operating leases are recognised as income on a straight-line basis over the lease term and areincluded in ‘net investment income’.

2.8

Investment property

Property held for long-term rental yields that is not occupied by one of the companies of Atradius is classified as
investment property.
Investment property comprises freehold land and buildings. It is stated at the cost of acquisition or construction, lessany subsequent accumulated depreciation and subsequent impairment losses. Buildings are depreciated using thestraight-line depreciation method over the estimated economic useful life of the property: 50 years.

1367

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

2.9

Fair value measurements

For financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree towhich the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:
Level 1: Quoted prices in active markets. This category includes financial instruments for which the fair value isdetermined directly by reference to published quotes in an active market. A financial instrument is regarded as quoted
in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry
group, pricing service or regulatory agency and those prices represent actual and regularly occurring market
transactions on an arm’s length basis;
Level 2: Valuation techniques based on observable market data. This category includes financial instruments forwhich the fair value is determined using a valuation technique (a valuation model), where inputs in the valuation
model are taken from an active market or are market observable. If certain inputs in the model are not market
observable, but all significant inputs are, the instrument is still classified in this category, provided that the impact of
those elements on the overall valuation is insignificant. Included in this category are items whose value is derived
from quoted prices of similar instruments, but for which the prices are (more than insignificantly) modified based onother market observable external data;
Level 3: Valuation techniques incorporating information other than observable market data. This category includes
financial investments for which the fair value is determined using a valuation technique for which a significant levelof the input is not supported by a current observable market transaction. This category also includes the financial
investments for which the fair value is based on brokers quotes or pricing services. These valuations are for 100% of
the fair value verified with an external independent valuation company.
The fair values of financial instruments traded in active markets are based on quoted market prices at the end of thereporting period. The quoted market price used for financial investments held by Atradius is the current bid price.
Transaction costs on initial recognition of financial investments are expensed as incurred.
The fair values of financial instruments in markets that are not active are determined using valuation techniques.
Atradius uses a variety of methods and assumptions that are based on market conditions existing at the end of thereporting period.
The fair values of property for own use and investment property are determined, every two years, by independent realestate valuators registered in the relevant countries and who have appropriate qualifications and experience in thevaluation of properties.
See Note 4.3.1.1 for further details regarding the determination of the fair value of financial investments.

2.10

Recognition and derecognition of financial investments

All purchases and sales of financial investments that require delivery within the time frame established by regulationor market convention (‘regular way’ purchases and sales) are recognised at trade date, i.e. the date that Atradius
commits to purchase or sell the asset. Loans and receivables are recognised and derecognised at settlement date, thedate Atradius receives or delivers the asset.
Financial investments are derecognised when the rights to receive cash flows from the financial investments have
expired or where Atradius has transferred substantially all the risks and rewards of ownership. If Atradius neithertransfers nor retains substantially all the risks and rewards of ownership of a financial investment and does not retain
control over the investment, it derecognises the financial investment. In transfers where control over the asset isretained, Atradius continues to recognise the asset to the extent of its continuing involvement. The extent ofcontinuing involvement is determined by the extent to which Atradius is exposed to changes in the value of the asset.

2.11

Classification of financial investments

Atradius classifies its financial investments into two categories: investments available-for-sale and loans andreceivables. The classification depends on the purpose for which the investments were acquired. Atradius determines
the classification of its investments at initial recognition and re-evaluates this at the end of each reporting period.

14

68Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

2.11.1 Available-for-sale financial investments
Available-for-sale financial investments are non-derivative financial assets that are either designated in this categoryor not classified in other categories.
Financial investments are initially recognised at fair value plus transaction costs that are directly attributable to theiracquisitions. Unrealised gains and losses arising from changes in the fair value of financial investments classified asavailable-for-sale are recognised in other comprehensive income net of tax. When financial investments classified asavailable-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement
as net gains or losses on financial investments.

2.11.2 Loans and receivables
Loans and receivables (including deposits) are non-derivative financial investments with fixed or determinable
payments that are not quoted on an active market, other than those that Atradius intends to sell in the short term, orthat it has designated as available-for-sale. Deposits withheld by ceding companies and receivables arising frominsurance contracts are also classified in this category. Loans and receivables are initially recognised at fair value plustransaction costs and subsequently measured at amortised cost using the effective interest method, less provision for
impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables
where the recognition of interest would be immaterial.

2.12

Impairment of assets

2.12.1 Financial assets - general
At the end of each reporting period Atradius assesses, whether there is objective evidence that a financial asset orgroup of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses
are incurred only if there is objective evidence of impairment as a result of one or more events that have occurred
after the initial recognition of the asset (a ‘loss event’) and that loss event has a negative impact on the estimatedfuture cash flows of the financial asset or group of financial assets that can be reliably estimated.
Atradius first assesses whether objective evidence of impairment exists for financial assets that are individuallysignificant. If Atradius determines that no objective evidence of impairment exists for an individually assessedfinancial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk
characteristics and assesses them collectively for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is or continues to be recognised are not included in a collective assessment of
impairment.

2.12.2 Financial investments - carried at amortised cost
Atradius assesses, at the end of each reporting period, whether there is objective evidence that a financial asset carriedat amortised costs is impaired. Objective evidence that loans and receivables are impaired can include significant
financial difficulty of the counterparty, default or delinquency by a counterparty, restructuring of a loan or advance by
Atradius on terms that Atradius would not otherwise consider; indications that a counterparty will enter bankruptcy;
or economic conditions that correlate with defaults.
Where such evidence exists that an impairment loss has been incurred on loans and receivables, the amount of theloss is measured as the difference between the asset’s carrying amount and estimated future cash flows. The carrying
amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in theincome statement. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is thecurrent effective interest rate determined under contract. As a practical expedient, Atradius may measure impairment
on the basis of an instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively toan event occurring after the impairment was recognised, the previously recognised impairment loss is reversed byadjusting the allowance account. The amount of the reversal is recognised in the income statement.

2.12.3 Financial investments - carried at fair value
Atradius assesses, at the end of each reporting period, whether there is objective evidence that an available-for-salefinancial investment is impaired. Objective evidence that available-for-sale financial investments (including debt and15

69All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedequity securities) are impaired can include default or delinquency by an issuer, indications that an issuer will enter
bankruptcy and/or the disappearance of an active market for a security. In addition, for an investment in an equity
security, management assesses whether there has been a significant or prolonged decline in its fair value below its
acquisition cost.
In this assessment, Atradius uses the following indications to decide whether a loss on an equity instrument position
qualifies for impairment:-

significant: The market value of the equity instrument dropped below 60% of its average historical cost price (i.e.
the unrealised loss is larger than 40% of the average historical cost price); or
prolonged: The market value of the equity instrument has been below its average historical cost price forconsecutive period of 18 months.

Where such evidence exists for available-for-sale financial investments, the cumulative net loss that has beenpreviously recognised directly in other comprehensive income is recycled from other comprehensive income (therevaluation reserve) and recognised in the income statement.
If, in a subsequent period, the fair value of debt securities classified as available-for-sale increases and the increase
can be objectively related to an event occurring after the impairment loss was recognised in the income statement, theimpairment loss is reversed through the income statement, but only to the amortised cost price. Subsequent increases
above the amortised cost price are credited against the revaluation reserve as a component of other comprehensive
income.
Impairment losses recognised in the income statement on equity securities cannot be reversed in subsequent periods.

2.12.4 Impairment of other non-financial assets
Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation and aretested annually for impairment. Assets that are subject to amortisation and depreciation are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes ofassessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows(cash-generating units). Investment properties are not allocated to cash-generating units, but are tested for
impairment on an individual basis.
If in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively toan event occurring after the impairment loss was recognised in the income statement, the carrying amount of theasset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, provided that theincreased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (or cash-generating unit) in previous years. The amount of the reversal
is recognised in the income statement. However, impairment losses recognised for goodwill are not reversed insubsequent periods.
2.13

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the statement of financial position only
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net
basis, or to realise the asset and settle the liability simultaneously.

16

70

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

2.14

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held on call with banks and other short-term highly liquid
investments with original maturities of three months or less that are subject to an insignificant risk of changes in theirfair value, and are used by Atradius in the management of its short-term commitments. Bank overdrafts that are
repayable on demand form an integral part of Atradius’ cash management and are included as a component of cash
and cash equivalents for cash flow purposes. In the statement of financial position, bank overdrafts that do not meetthe criteria for offsetting, are presented separately as liabilities under borrowings.
Deposits pledged for regulatory and other purposes as well as cash held for investments are not available for use in
Atradius’ day-to-day operations and are therefore not included within cash and cash equivalents. These assets areincluded within financial investments.

2.15

Capital and reserves

2.15.1 Share capital
Share capital is the nominal value of issued shares. Incremental costs directly attributable to the issue of equity
instruments are shown in equity as a deduction from the proceeds, net of tax. Incremental costs directly attributable tothe issue of equity instruments as consideration for the acquisition of a business are included in the cost of acquisition.

2.15.2 Share premium reserve
Share premium reserve is the amount received by the Company in excess of the nominal value of the shares it has
issued.

2.15.3 Revaluation reserve
The revaluation reserve comprises the unrealised gains/losses of the securities available-for-sale after the deductionof income tax, except for impairments that are charged directly to the income statement.

2.15.4 Currency translation reserve
The net exchange difference, after the deduction of income tax that is recognised in the currency translation reserve ineach period represents the following:-in respect of revenue, expenses and capital transactions, the difference between translating these items at actual
or average exchange rates and using the exchange rate at the end of the reporting period, which is the case forrecognised assets and liabilities;
in respect of the net assets at the beginning of the reporting period, the difference between translating these items
at the rate used at the end of the previous reporting period and using the rate at the end of the current reporting
period; andin respect of the net assets acquired during the reporting period, the difference between translating these items at
the rate at acquisition date and using the rate at the end of the current reporting period.

2.15.5 Pension reserve
The pension reserve relates to the various defined benefit schemes and consists of:-actuarial gains and losses, after the deduction of income tax, that arise in calculating Atradius’ pension obligations
and fair value of the plan assets in respect of a defined benefit plan in the period in which they occur; andthe non-recognition of assets (‘asset ceiling’) that can occur when the plan assets are higher than the projected
benefit obligation and where Atradius cannot recover any surplus through refunds from the pension vehicle due
to solvency and/or control requirements.

2.15.6 Retained earnings
Retained earnings are the accumulated amount of profits or losses at the end of the reporting period, which have notbeen distributed to shareholders.

1771All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

2.15.7 Non-controlling interests
Non-controlling interests represent the proportion of shareholders’ equity and of total comprehensive income
attributable to minority shareholders.
Non-controlling interest are initially measured on the net fair value of the acquirer’s identifiable assets, liabilities andcontingent liabilities at the date of the acquisition. The calculation of the percentage attributable to the non-controllinginterest includes any equity interest not held indirectly through subsidiaries.
Non-controlling interest is presented within equity separately from the equity attributable to the equity holders of theCompany. Similarly, the statement of recognised income and expenses presents total income and expenses for theperiod showing separately the amounts attributed to the equity holders of the Company and non-controlling interests.

2.16

Subordinated debt

A subordinated debt is recognised initially at fair value, net of transaction costs incurred. A subordinated debt issubsequently stated at amortised cost. The difference between the proceeds (net of transaction costs) and theredemption value is recognised in the income statement over the fixed period of the debt during which the interest isfixed using the effective interest method. Interest payable is reported under other liabilities.

2.17

Insurance contracts

An Insurance contract is a contract under which one party (the insurer) accepts significant insurance risk fromanother party (the policyholder) by agreeing to compensate the policyholder or its beneficiary if a specified uncertain
future event (the insured event) affects the policyholder.
The insurance contracts issued by Atradius can be classified into two main categories:-

Credit insurance contracts: contracts that provide for specific payments to be made to reimburse the holder for theloss it incurs because a specified debtor fails to make a payment when due under the original or modified terms ofthe contract between the debtor and Atradius’ insured customers; andBonding contracts: contracts that provide compensation to the beneficiary of the contract if Atradius’ bonding
customer fails to perform a contractual obligation relative to the beneficiary.

The company applies IFRS 4.25, which allows existing insurance accounting practices to continue. The maindifference relates to the accounting of local business in Spain and Portugal that applies existing earnings and related
provisioning practices. The differences in application lead to different allocations of unearned premium and provision
for outstanding claims. Further reference is made to specific information included in Note 4.2.6 and Note 18.

2.17.1 Deferred acquisition costs
Commission costs that vary with and are related to securing new contracts and renewing existing contracts arecapitalised as deferred acquisition costs. All other costs are recognised as expenses when incurred. The deferredacquisition costs are subsequently amortised over the life of the policies as premium is earned.

2.17.2 Provision for unearned premium
The recognition of unearned premium per product is set out in Note 4.2.6.1.

2.17.3 Provision for outstanding claims
Claims and loss adjustment expenses are charged to the income statement as incurred based on the estimated liability
for compensation owed to contract holders. They include direct and indirect claims settlement costs and arise from therisks Atradius has assumed up to the end of the reporting period. Atradius does not discount its liabilities (other than
the recoveries on the Instalment Credit Protection (ICP) product) given the short-term nature of its liabilities.
Liabilities for unpaid claims are estimated using the input of assessments for individual cases reported to Atradius andstatistical analyses for the claims incurred but not reported. When appropriate, deductions are made for salvage,
subrogation and other expected recoveries from third parties. For reinsurance business the provisions are determinedtreaty-by-treaty, based on premium and loss information supplied by the ceding companies. Estimates of expected
losses are developed using historical claims experience, actual versus estimated claims experience and other known
trends and developments.
18
72

Atradius
financial statements
statements 2020
2020 Atradius
Atradius N.V.
N.V.
Atradius || Consolidated
Consolidated financial

Additional information on the measurement of the provision for outstanding claims is provided in Note 4.2.6.

2.17.4 Liability adequacy test
At the end of each reporting period, a liability adequacy test is performed to ensure the overall adequacy of the total
insurance contract liabilities, net of related deferred acquisition costs. In performing this test, current best estimates of
future contractual cash flows and claims handling expenses are used. Any deficiency on consolidated level isimmediately charged to the income statement by first writing down the related deferred acquisition costs and then by
establishing a provision for losses arising from the liability adequacy test.

2.17.5 Reinsurance contracts
Contracts entered into by Atradius with reinsurers, under which Atradius is compensated for losses on one or more
contracts it has issued and that meet the classification requirements for insurance contracts, are classified asreinsurance contracts held. Contracts that do not meet the classification requirements are classified as financial assets.
Insurance contracts entered into by Atradius under which the contract holder is another insurer (reinsurance
business) are included in insurance contracts.
The benefits to which Atradius is entitled under its reinsurance contracts held are recognised as reinsurance assets.
These assets consist of short-term balances due from reinsurers (classified within loans and receivables), as well as
longer term receivables (classified as reinsurance contracts) that are dependent on the expected claims and benefits
arising under the related reinsurance contracts. Amounts recoverable from or due to reinsurers are measured
consistently with the amounts associated with the reinsured insurance contracts and in accordance with the terms ofeach reinsurance contract. Reinsurance liabilities are primarily premium payable for reinsurance contracts and arerecognised as an expense when due.
Atradius assesses its reinsurance assets for impairment on a quarterly basis. If there is objective evidence that thereinsurance asset is impaired, Atradius reduces the carrying amount of the reinsurance asset to its recoverable
amount and recognises that impairment loss in the income statement. Atradius gathers the objective evidence that areinsurance asset is impaired by applying procedures similar to those adopted for financial assets held at amortised
cost. The impairment loss is calculated under similar method used for these financial assets.
Reinsurance commission related to Atradius’ quota share treaties is calculated and accounted for at a provisional rate
but reviewed against the development of the ultimate loss ratio as soon as an underwriting year matures. The sliding
scale commission (an additional income or expense on top of the provisional commission) is based on an estimate bymanagement of the ultimate loss ratio for an underwriting year.
Atradius recognises the gains and losses from reinsurance contracts directly in the income statement.

2.17.6 Receivables and payables related to insurance contracts
Receivables and payables are recognised when due. These include amounts due to and from agents, brokers andinsurance contract holders.
If there is objective evidence that the insurance receivable is impaired, Atradius reduces the carrying amount of theinsurance receivable accordingly and recognises that impairment loss in the income statement. Atradius gathers theobjective evidence that an insurance receivable is impaired by applying procedures similar to those adopted for loans
and receivables. The impairment loss is also calculated under similar method used for these financial assets.

2.17.7 Salvage and subrogation reimbursements
Some insurance contracts permit Atradius to sell goods acquired in settling a claim (i.e., salvage). Atradius may also
have the right to pursue third parties for payment of some or all costs (i.e., subrogation).
Estimates of salvage recoveries and subrogation reimbursements are included as an allowance in the measurement of
the provision for claims. The allowance is the amount that can reasonably be expected to be recovered.

1973

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

2.17.8 Insurance portfolios
Acquired insurance portfolios are initially recognised at fair value by estimating the net present value of future cash
flows related to the liability arising from insurance contracts, being the provision for unearned premium and theprovision for outstanding claims at the date of acquisition. The difference between the carrying value and the fairvalue of the insurance contracts is recognised as an intangible asset.
The Group subsequently amortises this asset based upon the duration of the underlying cash flows. The carrying
amount after initial recognition is adjusted for accumulated amortisation and any accumulated impairment losses.

2.18

Provisions

Provisions for restructuring, onerous contracts and litigation are recognised when Atradius has a present legal orconstructive obligation as a result of past events and it is more likely than not that an outflow of resources will be
required to settle the obligation and the amount has been reliably estimated.
Restructuring provisions include employees’ termination payments that are directly related to restructuring plans.
Provisions are not recognised for future operating losses. Where there are a number of similar obligations, thelikelihood that an outflow will be required in settlement is determined by considering the class of obligations as awhole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the sameclass of obligations may be small. Where the effect of the time value of money is material, the provision is measured as
the present value of the expenditure expected to be required to settle the obligation discounted using a pre-tax rate.

2.19

Deposits received from reinsurers

Deposits received from reinsurers represent amounts received from reinsurance companies in respect of ceded claims
and premium provisions and are stated at amortised cost using the effective interest method. Interest expense isrecognised on an effective yield basis, except for short-term deposits where the impact of interest would be
immaterial.

2.20

Employee benefits

2.20.1 Post-employment benefits
Atradius has a number of post-employment benefit plans. The obligations of these schemes are determined byperiodic actuarial calculations and are generally funded through payments to state plans, insurance companies ortrustee-administered funds. Atradius has both defined benefit plans and defined contribution plans.
Defined benefit plans
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on
retirement, dependent on one or more factors such as age, years of service and compensation. In a defined benefit plan
Atradius may pay contributions into a separate entity or fund. Atradius, and in some cases the employees who areparticipating, fund a defined benefit plan and Atradius has a legal or constructive obligation to pay further
contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service
in the current and previous periods.
The amount recognised as a defined benefit liability is the net total of the present value of the defined benefit
obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (ifany) out of which the obligations are to be settled directly. The recognition of assets that arise by over-funding of thedefined benefit plan is limited to the ability to use the surplus to generate future benefits (the asset ceiling). The
defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The
present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid
and that have terms of maturity that approximate to the terms of the related pension liability.
Remeasurement of the net defined benefit liability, which comprises actuarial gains and losses, the return on plan
assets (excluding net interest that is calculated by applying the discount rate) and the effect of the asset ceiling (if any,excluding interest), is recognised immediately in other comprehensive income. Atradius determines the net interest
expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used tomeasure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability(asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of20

74

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans arerecognised in the income statement.
The non-recognition of assets (‘asset ceiling’) can occur when the plan assets are higher than the projected benefit
obligation and Atradius cannot recover any surplus through refunds from the pension vehicle due to solvency and/or
control requirements.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past
service or the gain or loss on curtailment is recognised immediately in the income statement. Atradius recognises
gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Defined benefit costs are categorised as follows:-

service cost (including current service cost, past service cost, as well as gains and losses on curtailments andsettlements);
administration expenses;
net interest expense or income; andremeasurement.

The first two components of defined benefit costs are presented in the income statement under net operating
expenses. The net interest is presented under finance expenses. Curtailment gains and losses are accounted for as past
service costs. Remeasurements are recognised in other comprehensive income.
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which Atradius pays fixed contributions into aseparate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does
not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
For defined contribution plans, Atradius pays contributions to publicly or privately administered pension insurance
plans on a mandatory, contractual or voluntary basis. Atradius has no further payment obligations once thecontributions have been paid. The contributions are recognised as employee benefit expenses when they are due.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments
is available. The contributions to these plans are recognised as expenses in the income statement.

2.20.2 Other long-term employee benefits
Atradius has a number of other post-employment plans. The main plans are lump sum payment plans and prepension plans. A lump sum payment plan is a plan where the employees are entitled to a lump sum payment at thedate their employment is terminated. A pre-pension plan is a plan where the employees are entitled to receive
payments if they stop working before their actual retirement date.
Atradius’ obligation in respect of long-term service benefits, other than pension plans, is the amount of future benefit
that employees have earned in return for their service in the current and prior periods. The obligation is calculated
annually by independent actuaries using actuarial techniques.

2.20.3 Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an
employee accepts voluntary redundancy in exchange for these benefits. Atradius recognises termination benefits
when it is committed to either terminating the employment of current employees according to a detailed formal plan
without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage
voluntary redundancy. When termination benefits are related to an overall restructuring plan, the Atradius liability is
included as part of the provisions.
2.20.4 Profit sharing and bonus plans
Atradius recognises a liability and an expense for bonuses and profit sharing based on a formula that takes into
consideration, amongst other things, individual targets and the profit attributable to the owners of the Company.
Atradius recognises a liability where contractually obliged or where there is a past practice that has created aconstructive obligation.
21

75

All
in thousands
thousands ofof Euro,Euro, unlessunless otherwise
otherwise statedstatedAll amounts
amounts in

2.21

Taxation

Income tax in the consolidated income statement for the year comprises current and deferred tax. Income tax isrecognised in the consolidated income statement except to the extent that it relates to items recognised in othercomprehensive income, in which case it is recognised in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or
substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous
years.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of thereporting period and are expected to apply when the related deferred income tax asset is realised or the deferredincome tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be used. Deferred tax assets and liabilities are offset when there is alegally enforceable right to set-off current tax assets against current tax liabilities and when they relate to income
taxes levied by the same tax authority and Atradius intends to settle its current tax assets and liabilities on a net basis.
If the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a businesscombination that at the time of the transaction affects neither the accounting nor the taxable profit or loss, it is notaccounted for.

2.22

Consolidated income statement

2.22.1 Income
Revenue comprises the fair value for services, net of value added tax, after eliminating revenue within Atradius.
Revenue is recognised as follows:
Premium earned
Written premium includes both direct business and reinsurance business and is defined as all premium and policyrelated fees invoiced to third parties and reinsurance premium, excluding tax.
Written premium includes an estimate of premium not yet invoiced for which Atradius has already accepted thecontractual risk. Accruals for premium refunds and cancellations are charged against premium written. Premium
earned includes an adjustment for the unearned share of premium.
Premium ceded under reinsurance contracts is reported as a reduction of premium earned. Amounts for ceded
unearned premium under cession agreements are reported as assets in the consolidated statement of financial
position.
Service and other income
Service income includes the income from:- Credit information services, consisting of providing up-to-date credit information on buyers for which a customer
requires a credit limit application under the insurance policy. This performance obligation is satisfied over time
during the policy period. Revenue is recognised based on the credit limit applications requested by and invoiced
to the customer, against fixed prices stated in the contract. If a contract includes a separate charge for monitoring,
this element is recognised evenly over time;- Debt collection services for debts owed to customers. The performance obligation is defined at the level of theindividual debts, placed under the contract. Revenue is recognised in line with the actual collected amounts, basedon fees specified in the debt collection agreements.
- Business information and other service income.
Business information is provided online to customers on a subscription basis. Revenue is recognised
evenly over time based on the consideration in the contract, reflecting the constant effort required toacquire and prepare business information.
22

76

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

-

Atradius Dutch State Business (ADSB) is the official Export Credit Agency for The Netherlands and issues
export credit insurance policies and guarantees to Dutch businesses, on behalf of and for the risk of the
Dutch State. ADSB receives a service fee for managing the credit insurance facility, specified in theservice contract. This income is recognised evenly over time.

Share of income of associated companies
Associates are accounted for in the consolidated financial statements using the equity method. Under the equity
method the investor’s share of after-tax profits or losses of the associates is presented as a single line item in theincome statement.
Net income from investments
Investment income comprises interest income on funds invested (including available-for-sale financial investments),
dividend income, gains on the disposal of available-for-sale financial investments and rental income from investment
property that are recognised in the income statement. Interest income is recognised as it accrues in the income
statement, using the effective interest method. Dividend income is recognised in the income statement on the date that
Atradius’ right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
Investment expenses comprise impairment losses recognised on financial investments and investment property.
Realised gains or losses on investment property recognised in the income statement represent the difference between
the net disposal proceeds and the carrying amount of the property.

2.22.2 Expenses
Net insurance claims
Claims charges include claims paid, the change in provision for outstanding claims, and the claims handling expenses.
Claims ceded under cession contracts are recorded as reductions of gross claims.
Net operating expenses
Net operating expenses comprise administrative expenses and commissions. Total administrative expenses are
expenses associated with selling and administrative activities after reallocation of claims handling expenses toinsurance claims.
Finance income and expenses
Finance income consists of interest received on loans, receivables and cash and cash equivalents.
Finance expenses includes interest, amortisation of discount on the subordinated debt, foreign exchange results andthe net interest on the net defined benefit liability (asset) related to defined benefit plans (see also Note 2.20). Foreign
currency gains and losses are reported on a net basis and consist of transaction and translation results.
Interest income and expenses are calculated using the effective interest rate method based on market rather than
nominal rates, at the date that the instrument is recognised initially or modified.

2.23

Consolidated statement of cash flows

The statement of cash flows is presented using the indirect method, whereby the result for the year before tax isadjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments, and items of income or expense associated with investing or financing cash flows.
Some of the terminology used in the statement of cash flows is explained as follows:- cash flows are inflows and outflows of cash and cash equivalents;- operating activities are the principal revenue-producing activities of Atradius and other activities that are notinvesting or financing activities;- investing activities are the acquisition and disposal of long-term assets and other investments not included in
cash equivalents; and- financing activities are activities that result in changes in the size and composition of the contributed equity andborrowings of Atradius.
23
77All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated3

Critical accounting estimates and judgements in applying accounting
policies

Atradius makes estimates and assumptions that affect the reported assets and liabilities and contingent assets andliabilities. Estimates and judgements are continually evaluated. These are based on historical experience and otherfactors, including expectations of future events that are believed to be reasonable under the circumstances. The mostsignificant areas for which management is required to make judgements and estimates that affect reported amounts
and disclosures are detailed below.

3.1

Measurement of fair value

Atradius measures some of its financial instruments at fair value for financial reporting purposes. The fair value offinancial instruments that are not traded in an active market is determined by using valuation techniques. Atradiususes its judgement to select a variety of methods and make assumptions that are mainly based on market conditions
existing at the end of each reporting period. Where Level 1 inputs are not available, Atradius engages an external
independent valuation company to perform the valuation. Atradius works together with the external independentvaluation company to establish the appropriate valuation techniques and inputs to the model.
Information about the valuation techniques and inputs used in determining the fair value of various instruments aredisclosed in Note 4.3.1.1 and Notes 7 and 16.

3.2(Re-)insurance related estimates

The ultimate liability arising from claims made under insurance contracts
The estimate of the ultimate liability arising from claims including recoveries made, or to be made, under insurance
contracts is Atradius’ most critical accounting estimate. Although management has endeavoured to adequately take all
facts into account, by their very nature estimates remain uncertain and the eventual outcome may differ significantly
from the projected amount.
Pipeline premium
Pipeline premium relates to shipments made by Atradius’ policyholders for which Atradius is at risk but has not
invoiced the premium. Pipeline premium is estimated as the part of insurance premium earned but not yet invoiced at
the end of the reporting period. Although the calculation of the pipeline premium is derived from the core businesssystems and calculated at policy level, considering all policy specific features that might impact the assessment, thecalculation does involve the use of management estimates. The main reason is that premiums for risks taken on
depend on the amount of business insured during the reporting period, whereas at the end of the reporting period not
all business has been declared yet. A secondary reason is that for part of the policies the final premium depends onclaims related to the policy. As the final performance of the policy is not known at reporting date, this also means thatpart of the pipeline premiums results from estimates. The assumptions are based on recent trends in insured business,client specific information, knowledge of pending claims, and when relevant, macroeconomic information. It is thiscurrent changing macroeconomic information, under an unprecedented pandemic, which requires a quantification of
the additional uncertainty over the business as usual process followed in the pipeline estimates, to ensure that
potential future developments of pipeline are not impacting negatively the financial statements in the coming years(See Note 13). Historical positive development derived from this process shows that, any potential deviation on
unknown shipments under this unprecedented pandemic would be covered without significant impacts on insurance
premium.

3.3

Impairment of available-for-sale equity financial investments

Atradius determines that an available-for-sale equity financial investment is impaired when there has been asignificant (40% of decrease) or prolonged (18 consecutive months) decline in the fair value below its cost. This
determination of what is significant or prolonged requires judgement.
Had all the declines in fair values below cost been considered significant or prolonged Atradius would have anadditional EUR 7.4 million loss before tax (2019: EUR 3.1 million loss), being the transfer of the total revaluation
reserve for unrealised losses on equity financial investments to the income statement.

24
78

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

3.4

Estimated impairment of goodwill

In accordance with its accounting policy, Atradius annually tests whether goodwill of subsidiaries and associatedcompanies has suffered any impairment. The recoverable amounts of cash-generating units have been determinedbased on value in use calculations. These calculations require the use of estimates (see Note 6).
In order to test the value in use against the recognised goodwill, Atradius has stress-tested the main assumptions(discount rate, combined ratio of terminal value and Capital Requirement ratio) which have been applied when
determining the value in use for the related cash-generating units.
The discount rate used varies depending on the location and industry of the company to analyse, using customised
Risk-Free Rates, Market Betas and Country Risk Premiums. The terminal value is calculated based on the dividend
flow/free cash flow of the normalised period through a perpetuity, which applies a long-term growth rate of 1% - 1.5%
and the specific discount rate.
The projection period is 10 years, where the first 1-4 year projections are based on financial budgets and/or forecasts.
In the budgets and forecasts, the impact of the changed macroeconomic situation due to the Covid-19 pandemic
situation is taken into account. The remaining years are estimated using ratios and growth rates that converge
towards their normalised term value.

3.5

Pension and post-retirement benefits

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis
using a number of assumptions. The main assumptions used in determining the net cost (income) for pensions
includes the discount rate and the inflation rate. Any change in these assumptions will impact the carrying amount ofpension obligations.
Atradius determines the appropriate discount rate at the end of each year. This is the interest rate that should be used
to determine the present value of estimated future cash outflows expected to be required to settle the pension
obligations. In determining the appropriate discount rate, Atradius considers the interest rates of high-quality
corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms tomaturity approximating the terms of the related pension obligation. Other key assumptions for pension obligations
are based in part on current market conditions.
Additional information, including a sensitivity analysis for the main (actuarial) assumptions, is disclosed in Note 17.

2579All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

4

Risk and capital management

4.1

Risk management

As a global insurance provider, Atradius recognises the importance of risk management. Atradius maintains a solidrisk management system comprising a risk strategy aligned to the business plan and supported by a mature
governance structure, clear policies and procedures and an associated internal control system. As a self-learningorganisation, Atradius is always strengthening its risk management capabilities to ensure it can meet the challengesof changing environments.
The relationship between risk and capital is fundamental for Atradius. Understanding how risk-taking consumes
capital allows management to steer Atradius and take strategic decisions with the interdependence of risk and capitalin mind. These decisions are substantially informed by the outcomes of Atradius’ economic capital model. This
internally developed model, which has received supervisory approval for use in calculating regulatory capitalrequirements, contributes to a multitude of risk assessment activities, as well as risk profile measurement, andenhances Atradius’ ability to monitor and manage risk levels within the organisation through the allocation of riskbased capital and the definition of an appropriate risk appetite.

4.1.1 The risk landscapeThe state of the global economy greatly influences the risks that Atradius faces. Economic deterioration may result inincreased insolvencies thereby causing more frequent and severe claims expenses. The return on our investment may
also deteriorate and defaults on our holdings of debt instruments may occur. A severe deterioration of all the abovementioned may affect the credit rating of Atradius. A downgrade of our credit rating could have a negative impact on
the number of customer policies held by Atradius and thereby lower revenues. Understanding of this landscape,anticipating developments and preparing mitigating actions is a key expertise of Atradius.
In addition to the risks arising from exposures under customer policies, which we refer to as underwriting risk,
Atradius’ risk landscape contains other types of risk. Atradius faces market risk related primarily to our assets, credit
risk from reinsurers and third-party receivables, and operational risks such as cyber risk and legal risks. In addition,
strategic risks exist, such as the rapidly changing technological environment, possible adverse impacts fromgeopolitical conflict, and uncertainty around the breakup of supranational entities. Atradius has structures, systems
and processes in place to identify, evaluate, monitor, and control or mitigate internal and external sources of material
risk in the landscape.
In 2020, the most significant developments in the risk landscape are related to the worldwide effects of the Covid-19
pandemic. The pandemic has affected all risk areas – from underwriting risk (impact on buyers (credit insurance) andcustomers (bonding)) to financial risk and operational risk (impact on Atradius’ ability to maintain its standard ofservice and to ensure that the needs of employees are adequately addressed). Atradius has taken the appropriate steps
to manage its exposure to the effects of the pandemic.
A key part of our underwriting strategy during the Covid-19 crisis has been supporting our customers in insuring theirreceivables, and, at the same time, protecting them against losses in a heightened risk environment in an explainable
and comprehensible way. While Covid-19 risks were spread broadly, the risks were not uniform across all countries,
sectors and portfolios. We analysed the nature and sources of the risks and how they constantly shifted, e.g. fromsupply chain to liquidity-related. We continually analysed all trade sectors for relevant risk factors, such as how theymight be influenced by governmental response and readiness, and changing infection rates in different countries andregions. Using segmentation tools, extensive data and analytics, dedicated Covid-19 response teams coordinated ourworldwide risk and commercial organisations to rigorously review and take action on portfolios. Most of ourunderwriting algorithms were re-parameterised in the Covid-19 environment. These continuous underwriting actions
were performed in alignment with commercial strategies on (re)pricing, policy restructuring and prudent sales,
underpinned by a deliberate and transparent communication with the market.
Covid-19 – Following the initial ‘lockdowns’ in most countries and travel bans, actions were taken to ensure humanresource and IT capabilities were sufficient to maintain the expected level of customer service and to manage the risk
exposure
Another notable development was Brexit. The UK left the EU on Friday 31 of January 2020 enabled by the Withdrawal
Agreement agreed between the EU and the UK Government. Atradius’ activities are continuing without interruption
post-Brexit as it had prepared itself well for the regulatory changes. Atradius had applied to the UK’s Prudential
Regulatory Authority [PRA] for authorisation as a Third Country Branch [TCB] and is now operating ‘as if’ authorised
as a TCB, under the Bank of England’s Temporary Permissions Regime which will be in place for up to three years.
With branches across the EEA and in the UK, Atradius continues to issue policies in all EU27 countries and in the UK.
2680

Atradius
Consolidated financial
financial statements
statements 2020
2020 Atradius
AtradiusN.V.
N.V.
Atradius || Consolidated

4.1.2 The risk management and internal control framework
The boards of the group companies have ultimate responsibility and accountability for risk management and internal
control within their respective companies. Atradius N.V.’s Management Board owns, implements and oversees
Atradius group-wide risk governance through the Risk Strategy Management Board (RSMB). The RSMB consists of all
members of the Management Board, as well as the Directors of Group Risk Management, Strategy and Corporate
Development and Finance. The RSMB’s responsibilities include the development of the framework to manage risk andthe on-going overview of the largest risks. The RSMB establishes the internal risk related system by determining risk
policies, risk boundaries, and by prescribing risk mitigation activities. In addition, the RSMB ensures that there areprocesses and systems to review the effectiveness of risk management and the internal control system.
The Supervisory Board is responsible for overseeing that the Management Board implements a suitable risk
management and internal control system. In this respect, the Management Board periodically presents results,
developments and plans to the Supervisory Board and relevant committees thereof. One of these committees, theAudit Committee, supervises, monitors and advises the Management Board on the effectiveness of internal risk
management and control systems. The Audit Committee is assisted in this role by Internal Audit, which carries out
both regular and ad hoc reviews of risk management controls and procedures.
Atradius’ risk management policies are established to formalise the identification and analysis of risks faced by
Atradius, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and Atradius’ activities. Throughits training, management standards and procedures, Atradius maintains a disciplined and constructive control
environment in which all employees understand their roles and responsibilities.
Central to Atradius’ system of governance is the Atradius risk governance structure. The risk governance structure
comprises a framework of committees, which support the RSMB in specific risk areas.
By applying the Atradius risk governance structure, Atradius is able to:Communicate risk-related norms and values across the organisation;
Provide clarity over the various responsibilities and accountabilities in the management of risk;
Manage the Group’s risk profile and development of the business over time;
Ensure that Atradius adheres to an approved risk appetite;
Ensure appropriate ownership of decisions; andProvide the Management Board with clear insight into decision-making and risk-management processes.

4.1.3 Risk classification
Atradius classifies its main risk types as insurance, financial and operational. Insurance risks are the risks of financial
loss as a direct result of providing insurance; these arise predominantly from the risk of default-related non-payment
by a buyer covered by a policy (credit insurance) or the risk of non-performance by a customer (bonding). Financial
risks include market risk, counterparty credit risk and liquidity risk. Operational risks arise from inadequate or failed
internal processes, people, systems, or from external events.

4.2

Insurance risk

4.2.1 Insurance products, their characteristics, sensitivity to insurance risk, risk mitigation and controls
Atradius operates with two main direct insurance product lines: credit insurance and bonding. In addition, Atradius
writes both credit and bonding business as a reinsurer. Credit insurance can be divided into three subcategories:
traditional credit insurance, instalment credit protection and special products. Each of these sub-categories has
particular risk characteristics.
The starting point for the management of insurance risk is that all staff have well-defined authorities specifying thelevel of risk they can accept. Furthermore, Atradius’ reinsurance structure imposes checks on the largest exposures.
Exposures beyond a certain threshold are subject to special acceptance by our leading reinsurers.
Traditional credit insurance and special products
In traditional credit insurance, Atradius insures its customers against the risk of non-payment of trade receivables.
The causes of loss covered differ by policy and usually include all forms of legal insolvency. Policies can also cover socalled ‘political’ causes of loss, which include but are not limited to, the risk of non-payment due to payment transfer
27

81All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedproblems, cancellation of export/import licenses and contract frustration. Traditional credit insurance does not covernon-payment of trade receivables due to commercial disputes. Each policy stipulates a maximum credit period thatthe policyholder can offer to its buyers without prior approval from Atradius. ‘Buyers’ are the customers of Atradius’
insured customers, i.e., the parties that Atradius insures trade credit risk on. In order to mitigate the risk of adverse
selection, the traditional credit insurance products of Atradius usually cover the entire portfolio of buyers of apolicyholder.
For traditional credit insurance, there are two underwriting processes: policy underwriting and buyer underwriting.
Policy underwriting is the process by which Atradius decides which companies to accept as policyholders and theterms and conditions of cover that are offered to those policyholders. Buyer underwriting is the process by which
Atradius sets a risk capacity for each buyer and issues credit limits for buyers under existing policies. Policy
underwriting and buyer underwriting are carried out by Commercial and Risk Services units respectively.
Policies are issued for a fixed period: usually no longer than two years and with a break clause after one year. Within
traditional credit insurance, customers retain some of the risk for their own account to protect Atradius from the riskof moral hazard. That self-retention can take the form, for example, of an uninsured percentage, a deductible on eachclaim, an aggregate first loss amount or a combination of these. All policies stipulate Atradius’ maximum liability. A
customer is covered for the credit risk on a buyer after a credit limit on the buyer has been established. Most policies
allow customers to establish credit limits themselves for smaller amounts, under strict conditions specified in thepolicy. Larger credit limits must be issued by Atradius. Credit limits are an important risk management instrument for
Atradius as they cap the amount that Atradius would have to pay to a customer in the event of a claim. Moreover,
Atradius can, in principle, withdraw the credit limit on a buyer at any time if circumstances demand. Credit limits may
be subject to specific conditions and Atradius can also set conditions for cover on a country or withdraw cover on acountry altogether. These are important tools in dynamically managing insurance risk exposure.
Staff in Commercial units have well-defined authorities specifying who can underwrite which policies. Authorities
typically require the approval of two people and conditions become stricter as the maximum liability under a policy
becomes larger, with the largest policies needing sign-off by both the Director of a Commercial unit and the
responsible Management Board member. The pricing of credit insurance policies (new, amended and renewed), is also
subject to governance and the models and methodologies used to establish a technical price require the approval of the
Quantitative Model Committee, a committee responsible for approving quantitative models used within the group.
Staff in Risk Services have well-defined authorities specifying who can set what capacity on a buyer and who canapprove what credit limits. As credit limit amounts grow, decisions require the approval of one or more cosignatories
of increasing seniority. The largest credit limit amounts require the approval of the Atradius credit committee with theappropriate authority level and in some exceptional cases the approval of the (leaders of the) reinsurance panel.
The special products business offers a range of bespoke policies to insure against various credit and political risks; thisproduct line includes policies that cover single transactions, single trade relationships and e.g. asset confiscation. A
distinguishing feature of special products policies is that, unlike traditional credit insurance, credit limits typicallycannot be readily withdrawn. The conditions of special products policies tend to place a greater onus on risk
monitoring and due diligence on the insured.
All policies are bound within clearly defined authorities issued to the policy underwriters who report ultimately to theChief Market Officer. All buyer risk is signed off by dedicated Risk Services teams, which report ultimately to the Chief
Risk Officer. In addition, a dedicated risk management team with a functional reporting line to the Director of Group
Risk Management ensures adherence to the risk governance model, monitors the portfolio risk and ensurescompliance with the terms of the reinsurance treaty.
Bonding
Atradius issues surety bonds for customers in a number of European countries including Italy, France, Spain, Portugal,
Germany and the Nordic and Benelux countries. Surety bonds insure beneficiaries against the risk of our customer not
meeting contractual, legal, or tax obligations. Beneficiaries include national, regional, local governments and tax
authorities as well as companies.
While a customer may fail to meet its obligations either because it is unable to perform to an agreed or required levelor because it is insolvent, there is also the risk that the customer may intentionally fail to meet its obligations.
Therefore, our assessment of both the customer’s financial strength and its ability to perform play an important part in
the underwriting process. Unlike traditional credit insurance, exposure related to issued bonds cannot be unilaterally
cancelled by Atradius.
2882Atradius || Consolidated
Consolidated financial
financial statements
statements 2020
2020Atradius
AtradiusN.V.
N.V.
Atradius

When a bond is called by the beneficiary, Atradius mediates to resolve conflicts by working with both customer andbeneficiary. If, as a result of non-performance, a payment is made by Atradius to the beneficiary, a recovery action istaken against the customer who remains ultimately liable. If Atradius does incur an irrecoverable loss it is almost
always because of the customer’s financial distress, making the triggers for loss similar to those of traditional credit
insurance.
The spread of customers over industry sectors varies by country as a result of differing legal and market
environments. The type of bonds issued include bid bonds, performance bonds, maintenance bonds, advance payment
bonds and various types of administrative bonds. These are issued with tenors ranging from a few weeks to years, but
only rarely in excess of five years.
All bonding facilities and individual bonds are underwritten by technical underwriters who are part of theCommercial units. Technical underwriters assess the risk of non-performance as well bonding wordings and othertechnical aspects. Financial underwriters, who are not part of the Commercial units, focus on the credit risk-related
aspects of customers; they must approve the acceptance of facilities and individual bonds over certain thresholds.
There is an authority structure in which decisions are escalated depending on the amounts involved. The largest
amounts require the approval of Atradius credit committees (Local or Group) with the appropriate authority level.
Other products
Reinsurance
Atradius underwrites reinsurance programmes for credit insurance and bonding business written by primary
insurers. This business is conducted by Atradius Reinsurance DAC, which is domiciled and regulated in Ireland.
Atradius Reinsurance DAC provides reinsurance capacity for primary insurance companies from both the developed
and developing credit insurance and bonding markets. It currently assumes business from 70 countries worldwide,
maintaining a balanced diversity within the portfolio from each continent. The underlying business consists ofapproximately 60% credit insurance and 40% bonding, based on premium volume.
Reinsurance underwriting guidelines and risk boundaries define the kind of business Atradius Reinsurance DAC isauthorised to write, with specific guidelines for type of product, capacity limit, exposure, term and diversity of theunderlying insurance ceded. Particular attention is given to ensuring the diversity of business from third party clientsand the level of exposure to any one country, company, or market is managed within agreed underwriting limits andcapacity.
All reinsurance business is regularly reviewed with respect to past underwriting years’ performance, triangulation
development, individual buyer exposure development, aggregate total potential exposure management and market
and country exposure. Risk and policy limit setting is monitored to ensure credit quality and compliance of theunderlying insurance products to the terms of the reinsurance programme.
Instalment Credit Protection (ICP)The ICP product line covers the medium- and long-term risks that financial and corporate policyholders face in theirmultiple instalment agreements with private individuals and businesses, and is available in Belgium andLuxembourg.
Policy underwriting is performed within the Commercial units. Policies are generally issued for a fixed period with
automatic renewal. The indemnification rate can rise to 100% and recoveries are for the benefit of Atradius.
Risk underwriting is performed by the risk underwriting teams. Credit decisions are made for each individual
operation based on an automated decision model. The model, without human intervention, can refer the case to anunderwriter for manual assessment. Authorities are granted to underwriters according to their seniority andexpertise. Cases are escalated according to pre-determined thresholds to the local ICP credit committees, then to the
ICP credit committee and finally to the Management Board member responsible for ICP.

4.2.2 Insurance risk management tools
Atradius monitors its exposure across various dimensions such as counterparty, industry sector and geographic
location. We maintain records of all credit insurance policies, credit limits and buyers in various connected systems.
29

83All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

These systems enable Atradius to set specific limits by buyer or buyer group. Management information derived fromthese systems enables Atradius to monitor aggregate exposure by country, customer, industry sector and otherdimensions.
All buyers with significant exposure are reviewed at least annually. Atradius continually receives information onbuyers through on-line connections with business information providers and from customers reporting negative
payment experiences. Buyers are reviewed whenever pertinent new information is received. Atradius assigns aninternal rating to buyers and the review process takes into account exposure on a buyer through direct business,
including exposure for special products and bonding. The authority structure for approval of new exposure referred toin this note also applies to buyer reviews.
The main system includes an integrated risk and (capital) cost-based pricing system. Most new policies and renewals
are priced starting from a technical price suggested by the Group Pricing Model.
For reinsurance, Atradius Reinsurance DAC uses a number of risk management tools to monitor the reinsurance
portfolio for exposures and performance developments. The reinsurance system is used to record the risk profile,ultimate estimate and related accounting information for each reinsurance treaty. This allows the reporting of
performance, total aggregate exposure and accounting reinsurance result. Performance development and exposuresrelated to each reinsurance treaty are reviewed quarterly within certain limits and through exception reporting.
For ICP, consumer credit risk underwriting relies on the databases of the relevant national authorities. In Belgium, theNational Bank of Belgium maintains two databases: a negative database, listing every credit non-payment incident,
and a positive database, listing every credit granted to any individual. In addition, ICP maintains and uses its own
internal consumer credit database.
Both Bonding and ICP have their own pricing systems and guidelines, which reflect the specifics of their businesses.

4.2.3 Reinsurance programme
Atradius transfers a significant portion of its insurance risk to external reinsurers, through a number of reinsurance
arrangements that include quota share and excess of loss treaties covering either the entire portfolio of Atradius or
specific risks. The reinsurance treaties are renewed annually, usually in December of the preceding year. However,during January 2020, Atradius decided to renew its reinsurance arrangements for 2021.This trend continued with therenewal of the reinsurance arrangements for 2022 in early 2021 . On renewal, Atradius assesses the optimal structureof the treaties for the forthcoming period, including excess of loss. A number of items are taken into consideration during
this review, including the forecast growth in the underlying business, economic developments etc. In addition, theproposed structure is considered in the context of the Solvency II capital requirements and Atradius’ SCR appetite.
For the underwriting year 2020 one quota share reinsurance treaty is in place covering the majority of Atradius’
business. The retention under this treaty is 63% (2019: 62%).
In addition, there are two separate quota share treaties, which cover a limited number of policies, where the retention
percentage is 25%. In addition, there is a single excess of loss programme, covering the own retention under these quota
share treaties, consisting of a series of excess of loss treaties (per buyer group). These excess of loss treaties also provide
protection for the assumed business of Atradius Reinsurance DAC. The combined excess of loss programme for Atradius
has mitigated the likelihood of it retaining two separate retentions if a common buyer were to fail, affecting both theassumed and direct business of Atradius. The top of the excess of loss layers is chosen so that, in the judgement ofmanagement, there remains only a very remote possibility that failure of any single buyer group will exceed the top
end of the excess of loss coverage purchased.
The attachment point of the excess of loss treaties has been set such that the net retention for business ceded under thequota share treaties and excess of loss structure for any buyer group does not exceed EUR 26.25 million for Atradius(2019: EUR 24.5) Atradius Reinsurance DAC has also purchased additional lower level protection EUR 7.5 million for
Atradius Re (2019: EUR 7.5)
With regard to the reinsurance panel, it is Atradius’ policy to select only reinsurers that have a high rating. The normal
minimum requirement is an ‘A-’ level rating. The treaties also include a provision that if a reinsurer is downgraded
during the period of the reinsurance below an A- rating then security can be requested and if not provided thereinsurance agreement with that reinsurer can be terminated.

30

84

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

2020 Government Agreements
The Covid-19 pandemic crisis has strongly affected the world economy.
The GDP forecast made by the IMF went from +3.3% at the beginning of the year to -4.4% in October, updating it to -3.5%
in its last published in January 2021.
In view of this situation and, as a support to the national economy, the 10 main countries where the Group operates havesupported the business of credit insurance in the form of specific government reinsurance schemes with high cession
rates.
The government schemes are part of an overall package of measures and aim to ensure that sufficient liquidity isavailable in the market, to counteract the damage inflicted on companies affected by the outbreak and to preserve thecontinuity of economic activity during and after the outbreak. In particular, they aim to ensure that trade credit
insurance services continue to be available to businesses.
Atradius entered into agreements with Germany, Denmark, Norway, Belgium, France, Luxemburg, the Netherlands,
United Kingdom, Italy and Spain. In general terms, all government schemes cover Credit Insurance with policyholders
from the country and buyers of everywhere (domestic and export credit). In Europe, all agreements previously wereapproved by the European Union. These agreements apply before private reinsurance in place with exception of Spainthat the agreement provides an additional cession (works in parallel current private cession to the market). All
government schemes are risk attaching and cession rate for premiums and claims depends on the country.
The table below details the impacts of the agreements in the consolidated statement of financial position (in thousand
euros):(EUR thousand)

Total

Balance SheetTechnical Provision Ceded

217,781

Premiums Provision Ceded

6,452

Cash in Bank

(78,565)

Accounts Receivables/Payables(195,371)
4,845

Reinsurance commission
Income statement impacts:
Insurance premium ceded(412,662)

Insurance claims recovered

266,688

Reinsurance commission

101,118

Government Scheme's Result(44,856)2021 Government Agreements
Due to the uncertainties for the coming future, Atradius has extended until 30 June 2021 the government schemes inGermany, Denmark, Norway, Belgium, Luxemburg, the Netherlands, United Kingdom, Italy and Spain.

4.2.4 Concentration risk
Atradius is exposed to concentration risk in a number of ways: primarily by buyer, buyer’s country or buyer’s
industry. The following tables illustrate the exposure at the end of 2020 and 2019 terms of the sum of credit limits
registered by Atradius on individual buyers. This is referred to as total potential exposure or TPE.
TPE is an approximate upper boundary to real exposure, in the sense that a limit that Atradius has issued does notnecessarily give rise to underwriting risk at a specific point in time. Atradius normally does not know the real
outstanding exposure under its limits on any specific buyer. The ‘usage’ of limits is, on average, much smaller than theamount of the limit. At the portfolio level, real outstanding exposure tends to be in the range of 10% to 30% of TPE, on
top of which customers still have their own retention. In addition to the TPE, customers are often allowed to bring
exposure under the policy through discretionary limits and potential exposure resulting from a discretionary limit on3185All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedany buyer is not held on Atradius’ system. Each policy specifies the maximum discretionary limit allowed under thepolicy. For most policies this is no more than EUR 20 thousand per buyer. This illustrates that TPE is a crude measureof exposure and that, in aggregate, real exposure will be far lower.
To manage concentration risks in our portfolio during the Covid-19 pandemic, we prioritised our underwriting
strategy on countries and sectors first, and then reviewed our largest and most severe risks at a credit limit and buyer
exposure level, considering contagion impacts. Actions were taken based on credit reviews, and on timely available
information, as well as on the significantly reduced level of trading in the foreseeable future. During 2020, a
significant number of limits were withdrawn and reduced across all markets, with a focus on the most vulnerable
segments. As a result of these actions, our portfolio has shrunk and improved in overall quality, and concentration
risk has decreased.
The TPE details below show TPE gross of reinsurance. Due to the non-linear nature of the excess of loss cover in
Atradius’ reinsurance programme, which has a finite number of reinstatements for each layer, there is no natural way
to show TPE net of reinsurance.
The following tables, show aggregated TPE for credit insurance (including special products and assumed reinsurance.
Buyer country

TPE 2020(EUR million)%

TPE 2019(EUR million)%

Spain, Portugal

79,231

12.9%

98,739

14.7%

Germany

93,56815.2%

93,024

13.8%

Central and Eastern Europe

64,63010.5%

68,595

10.2%

USA54,1888.8%60,602

9.0%

France45,2397.4%

48,407

7.2%

United Kingdom

42,034

6.8%

46,219

6.9%

Italy

42,001

6.8%

43,661

6.5%

Nordic30,7795.0%

31,748

4.7%

The Netherlands

29,8754.9%

30,392

4.5%

Other

133,004

21.6%

151,132

22.5%

Total

614,549100%

672,520100%

TPE 2020(EUR million)%

TPE 2019(EUR million)%

Chemicals

82,804

13.5%

87,466

13.0%

Electronics

73,18911.9%

82,858

12.3%

Consumer durables

69,071

11.2%

73,145

10.9%

Metals61,59710.0%

72,285

10.7%

Food

63,86010.4%

64,587

9.6%

Transport

53,098

8.6%

61,1289.1%

The following table shows the distribution of TPE over buyer industry sector.
Industry sector

Construction

47,072

7.7%

51,495

7.7%

Machines

39,635

6.4%

41,225

6.1%

Agriculture

29,845

4.9%

33,954

5.0%

Construction materials

29,345

4.8%

29,3894.4%

Services

23,346

3.8%

27,109

4.0%

Other

41,6856.8%

47,881

7.1%

Total

614,549100%

672,520

100%

32

86

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

The following table shows TPE aggregated by group of buyers. This is the method of aggregation that is relevant for
Atradius’ excess of loss treaties.
TPE Value band

TPE 2020(EUR million)%

TPE 2019(EUR million)%

0 - 20322,13752.4%

357,231

53.1%

20 - 100

103,940

16.9%

116,550

17.3%

100 - 250

69,176

11.3%

68,958

10.3%

250 - 500

50,3788.2%

53,3597.9%

500 - 1000

34,522

5.6%

39,4025.9%1000 - and more

34,396

5.6%

37,021

5.5%

Total

614,549100%

672,520100%(EUR million)

Exposure for bonding and for instalment credit protection has different characteristics and therefore not included inthese tables. The bonding exposure is EUR 24.1 billion (2019: EUR 24.8 billion). Exposure for instalment credit
protection amounts to EUR 3 billion (2018: EUR 3 billion).

4.2.5 Factors affecting the frequency and severity of claims

The frequency and severity of claims are affected by several factors. These include all factors that affect credit risk ingeneral. Thus, the state of the economy is a major driver of the frequency and severity of claims. Its effect may vary bycountry and sector. For trade credit risk, the behaviour of customers may also affect the frequency and severity ofclaims, for instance through risks inherent to their business activities and their risk management practices. Specific
events (e.g. natural disasters) or structural changes in the economy (e.g. easier access to developed markets for
producers in low cost countries), may impact the frequency and severity of claims. What specific events or structuralchanges are relevant in this respect will vary over time. In addition, the political risk cover that Atradius provides has
its own dynamics of frequency and severity of claims.
As result of Covid-19, the state of the economy in the near future is significantly more uncertain than usual. This, inturn, impacts uncertainty related to the frequency and severity of claims. In light of Covid-19, governments all aroundthe world have taken measures to support the economy. The uncertainty with respect to the timing and speed withwhich those measures are roll out is also a factor.
The bonding business usually only incurs irrecoverable losses when, after a bond call, any payments to beneficiaries
cannot be reclaimed from the bonding customer, or its guarantors. This is usually due to either the insolvency orbankruptcy of the bonding customer. Thus, in the end, the frequency and severity of claims is affected by similar
factors as those affecting credit insurance.
All forms of credit insurance and bonding bear the risk that changes in legislation, in particular of insolvency law,
may affect the amount and timing of claims payments or recoveries.
Atradius’ business processes are designed to effectively manage the impact of the many risk factors that affect thefrequency and severity of claims. The business processes continually evolve in response to how Atradius views theserisk factors in the context of its overall business strategy.

4.2.6 Sources and assumptions
4.2.6.1

Sources of uncertainty in the estimation of future claims payments

The sources of uncertainty in the estimation of future claims payments include, but are not limited to, all the factorsthat affect the frequency and severity of claims in general, as described in Note 4.2.5.
The insurance liabilities that cover claims experience after the reporting period for risks that have been accepted
before the end of the reporting period consist of two elements: the provision for unearned premium (UPR) and theprovisions for claims ‘incurred but not reported’, the IBNR. The accounting policies and estimation methods for setting
UPR and IBNR vary by product and in part also by entity within Atradius:-

for traditional credit insurance, premium is earned in full when the underlying shipment takes place. UPR
exclusively relates to the unearned part of premium invoiced in advance and to risks that have not started.
33

87

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated--

IBNR is Atradius’ estimate for future claims payments that will result from risks taken on, but for which noclaims notification has been received;for the local credit insurance business in Spain and Portugal, premium is earned pro rata over the period
between invoice date and due date of invoices for the insured shipments. Thus, part of UPR relates to risks
that have started, in the sense that the underlying insured shipment has taken place. IBNR is the local
business in Spain and Portugal’s estimate for future claims payments that will result from risks taken on, forwhich no claims notification has been received and for which the underlying invoices are overdue at the endof the reporting period;for bonding, instalment credit protection and reinsurance, the UPR relates to risk taken on; andfor special products, UPR is set on the same basis as for traditional credit insurance. With the exception of
single transactions, where the UPR relates to risk taken on.

As a consequence, the release of the provision for unearned premium should be taken into account for the local credit
insurance business in Spain and Portugal, bonding, instalment credit protection and reinsurance when interpretingthe claims development tables in Note 18 to evaluate the accuracy with which Atradius has historically estimatedfuture claims payments.
Estimates for future claims payments are made through a combination of case-by-case estimates and statisticalestimates. Provisions for reported claims are set on a case-by-case basis, taking into account statistical estimates for
expected recoveries and statistical estimates of claims incurred to payment ratios. The estimates for future claims
payments are produced per period during which policyholders brought risk under the cover of the policy (i.e., theperiod in which the insured shipment has taken place). Large cases are provisioned separately, at expected loss.
In the case of traditional credit insurance, the main sources of uncertainty for estimates of future claims payments
include:-the amounts that will be paid out as a percentage of the claim amount;the speed with which customers submit claims, as measured from the moment that the insured shipment
took place, the expected average claims payment and the expected percentage of cases that do not lead to apayment;
the expected number of claims for risks taken on during the most recent months since very few claims will
have been reported for the most recent four to six months (depending on the country of the customer);the inflow by number and size of large case; andthe estimation of the expected recovery percentages.

Estimates for future claims payments for bonding have a greater uncertainty than estimates for future claims
payments for credit insurance. Bonding is a ‘longer tail’ business; i.e., the time between issuance of the bond andreceipt of the bond call tends to be much longer than that of traditional short-term credit insurance. For example, mostcredit insurance covers credit periods up to 180 days, while around half the number of bonds written has tenors ofover two years. After receipt of a bond call, it usually takes longer to settle the claim and litigation is not uncommon,
either following the bond call or when trying to realise recoveries. Especially in Italy, litigation tends to be a lengthy
process. Outcomes of litigation cannot be predicted with certainty. For bonding, the provisions set on a case-by-casebasis are based on the amount called minus an amount to account for expected recoveries based on historicexperience or case specific information. For imminent large bond calls as well as for large customers in financial
difficulties, the Company may set an IBNR provision. Booked recovery provisions for bonding are periodicallyreviewed and adjusted to experience.

4.2.6.2

Assumptions, change in assumptions and sensitivity

The risks associated with credit insurance and bonding are subject to a number of influences that are not particularly
open to quantitative sensitivity analysis. This section describes the quantitative sensitivity analysis that is feasible.
Under normal circumstances, the most important assumption used in the main methods for reserving for traditional
credit insurance to set the estimate for the ultimate number of claims for the most recent months of risk would be thatthe claims inflow in early 2020 would be around 20% above the level of end 2019. The main methodologies for
estimating claims provisions for traditional credit insurance combined underpin 81% (2019: 83%) of the claims
provisions for traditional credit insurance.
In light of the increased uncertainty as result of the current circumstances, however, we take a different approach for2020 closing. During the second half of 2020, the number of reported claims dropped significantly compared to thefirst half of the year. This partly relates to a drop of insured business as result of the lock-downs early 2020 and partly
34

88Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

because of government’s support for the economy. Provisions have been set based on the assumption that this drop is
temporary and imply a strong increase in expected claim received count early 2021 of 10%-40%, depending on the
country, above the level of the first half of 2020.
An indication of the sensitivity to projected ultimate number of claims would be the following: if the estimatedultimate number of claims for the most recent six months of risk were to change by 10%, the claims provisions wouldchange by EUR 35 million, gross of reinsurance (2019: EUR 29 million). As in essence provisions for most recent
months are set as estimated number times estimated claims size, this also describes the sensitivity to assumed claimssize. This sensitivity is approximately linear. Unless noted otherwise, the same holds true for other sensitivities
mentioned in this section.
By its nature, an estimate of the expected inflow of large cases is not easy to quantify. The order of magnitude of thissensitivity would, in the judgement of management, be similar to the sensitivity in the estimated number of claims forthe most recent months, although, as is inevitable with severity risk, it has a longer tail. From historic data it can beseen that the correlation between the ultimate aggregate losses arising from large claims by underwriting year andthe attritional losses is larger than 80%.
As such, supporting the plausibility of the management judgement. Provisions for large cases are in part based on
historic experience with large cases and in part on case by case reporting of ultimate loss estimates. The approach that
relies on historic experience sets an ultimate loss arising from large cases as a fraction of the total losses for the last
two risk years. If these fractions were chosen 10% higher, then the claims provisions for traditional credit insurance
would increase by EUR 71 million (2019:EUR 38 million). The case by case estimates are specific to the individual facts
and circumstances of the case. As such, no meaningful overall insight to the sensitivity can be given.
Atradius is regularly reviewing how the Brexit might affect the defaults in the UK buyer portfolio. As result of the UK
economy having deteriorated significantly, the impact of which having been fully reflected in the provisions resulting
from the normal methodology for the UK, Atradius has concluded that the specific and additional provision for asevere Brexit scenario (2019: EUR 29 million) was no longer needed. As such, it was released during 2020.
Claims provisions are presented net of recoveries from salvage and subrogation. Realised recoveries can deviate fromexpected recoveries. Expected recoveries amount to EUR 490 million (2019: EUR 481 million). The largest twocomponents of the expected recoveries are the recoveries for traditional credit insurance of EUR 218 million (2019:
EUR 245 million) and for instalment credit protection of EUR 154 million (2019: EUR 149 million).
As recovery rates differ by country as well as product, moreover, that the development depends on the age of theunderwriting year, it is challenging to provide insight into sensitivity to assumptions by measuring the impact of amere parameter change. For traditional credit insurance, ultimate recoveries are first estimated using commonly usedprojection methods. These estimates are then reduced considering a margin for uncertainty, such that a favorable
development on these estimates is by far the most likely outcome. Nevertheless, the impact of setting the recovery
provisions lower by 10% is EUR 22 million (2019: EUR 25 million). For instalment credit protection, for which similar
margins for uncertainty are introduced, impact of setting recovery provisions lower by 10% is EUR 15 million (2019: 15
million).

4.3

Financial risk

Atradius is exposed to financial risk mainly through its financial assets, financial liabilities, reinsurance contracts andinsurance contracts. The core components of financial risk are market risk, credit risk and liquidity risk.
These risks arise mainly from interest rate sensitive positions, equity instruments, credit exposures, non-Eurocurrency exposures and cash flow patterns.

4.3.1 Market risk
Market risk is the risk that the fair value of assets and liabilities that are sensitive to movements in market prices,
decreases or increases due to adverse movements in equity prices, interest rates or currency exchange rates. Atradius
exposes itself to these risks by holding assets and liabilities which fair value is sensitive to movements in those prices.
To measure these risks, Atradius uses several risk metrics. The most important ones being the mismatch between
assets and liabilities which fair value is denominated in foreign currency, value-at-risk, capital models from the credit
assessment institutions and interest rate duration.

35

89

All amounts in thousands of Euro, unless otherwise stated

All amounts in thousands of Euro, unless otherwise stated

Atradius uses a Solvency II available capital approach to define the Strategic Asset Allocation and to assess the impact
of investment decisions to ensure that sufficient Solvency II capital remains.

4.3.1.1

Fair value of financial assets and liabilities

The estimated fair values of Atradius financial assets and liabilities, other than the subordinated debt, equal theircarrying value. The fair values of subordinated debts are disclosed in Note 16.
The fair values correspond with the price, at our best estimate, that would be received to sell an asset or paid totransfer a liability in an orderly transaction between market participants at the measurement date. Wheneverpossible, the fair values are based on quoted market prices. If there is no quoted market price available, we use
valuation techniques which are based on market prices of comparable instruments or parameters from comparable
active markets (market observable data). If no observable market inputs are available, valuation models are used(non-market observable data). These valuation techniques are subjective in nature and involve various assumptions
about the relevant pricing factors. Changes in these assumptions could significantly affect the estimated fair values.
Consequently, the fair values presented may not be indicative of the net realisable value. In addition, the calculation of
the estimated fair value is based on market conditions at a specific point in time and may not be indicative of future
fair values.
The fair values are subject to a control framework designed to ensure that they are either determined or validated by afunction independent of the risk taker. To this end, Atradius establishes the accounting policies and processes
governing valuation and is responsible for ensuring that these comply with all relevant accounting pronouncements.
Within this governance structure, non-quoted investments or illiquid investments in which Atradius invests arevalued by an external independent valuation company. That company uses its own proprietary valuation systems tovalue the securities supported by economic and market assumptions from financial information providers. The
valuations are provided on a monthly basis and are reviewed and approved by Atradius.
Debt and equity securities available-for-sale
The fair value of debt and equity securities available-for-sale is based on quoted market prices, where available. For
those securities not actively traded, fair values are provided by an external independent valuation company.
Loans and short-term investments
For loans and other short-term investments, carrying amounts represent a reasonable estimate of their fair values.
Other financial assets
The carrying amount of other financial assets, including cash and cash equivalents, is not materially different to theirfair value, given their short-term nature.
Subordinated debt
The fair values of subordinated debts are based on binding quotes from independent brokers (see Note 16 for further
details).
Other financial liabilities and deposits received from reinsurers
The carrying amount of other financial liabilities and deposits received from reinsurers is not materially different totheir fair value, given their short-term nature.

36
90Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

The following tables present the fair values of the financial instruments carried at fair value:

Quoted prices in active markets
Level 1

Financial instruments measured at fair value

2020

2019

388,726

370,138

Government bonds

549,357

562,622

Corporate bonds

1,618,001

1,504,007

Total

2,556,084

2,436,767

AssetsAvailable-for-sale:
Equity securities
Debt securities:

The Company has at 31 December 2020 and respectively 31 December 2019 only securities traded in active markets(level 1).

4.3.1.2

Equity price risk

Equity price risk is the risk that the fair value of the assets that are sensitive to movements in equity prices decreases
due to adverse movements in equity prices. Atradius exposes itself to equity price risk by investing in equity
instruments issued by corporations and equity instruments issued by investment funds. These risks are measured andanalysed by using value at risk techniques and capital models from the external credit assessment institutions. The
value-at-risk measures the potential maximum loss on Atradius’ equity instruments due to adverse movements inequity prices in the short-term while the capital models measures the potential maximum loss in the long-term, (seeNote 4.3.1.4 for more information). Atradius invests in a portfolio of diversified equity instruments to minimise theidiosyncratic risk of individual assets.
Individual equity instruments
Atradius invests in individual equities via a segregated mandate in which the asset manager has discretion to selectthe equity portfolio in accordance with investment restrictions set in the investment management agreement. This
diversified portfolio consists of EUR denominated large capitalisation equities. Per the end of December 2020, themarket value of these equities is EUR 140.5 million (2019: EUR 137.1 million).
Investment funds
The investment funds in which Atradius invests are exposed to market risk, counterparty risk, liquidity risk andcurrency risk (i.e., general investment fund risks). The risk of an investment fund is mainly driven by the nature of theassets in which it invests. As investment funds are offered to multiple investors, the investment restrictions of a fundare stated in the fund’s prospectus. Atradius only selects investment funds that have similar investment restrictions
stated in their prospectus as stated in the Atradius Investment Policy.

37

91All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedEquity instruments issued by investment funds
The portfolio of equity instruments issued by investment funds are shown in the following table:
Weight in %Weight in %

2020

2019

Passive equities exchange traded funds

184,94174.5%

199,173

85.5%

Active money market funds

40,41616.3%

16,700

7.2%

Real estate funds

22,9109.2%

17,097

7.3%

Total

248,267

100.0%

232,970

100.0%

Passive equities exchange traded funds
The portfolio of passive equities exchange traded funds mainly consists of an exchange traded fund which passively
tracks the Dow Jones EuroStoxx 50 Index.
Active money market funds
The portfolio of active money market funds consists of money market funds denominated in British pound, US dollar
and Brazilian real.
Real estate funds
The portfolio of real estate funds consists of real estate funds denominated in EUR and in which the underlying asset
exposure is focussed on European real estate.

4.3.1.3

Interest rate risk

Interest rate risk is the risk that the fair value of assets and liabilities, that are sensitive to movements in interest rates,
decreases or increases due to adverse movements in interest rates. Atradius exposes itself to this risk by investing in
debt instruments and equity instruments issued by investment funds that invest in debt instruments, issuing
subordinated debt and by insurance contracts. Financial assets in Atradius are mainly covering insurance liabilities.
ProfileAt the end of the reporting period the interest rate profile of Atradius’ interest-bearing financial instruments was:Fixed rate instruments -Variable rate instruments -carrying amountFinancial assets (1) (3)Financial liabilities
Total(2) (4)carrying amount

2020

2019

2020

2019

2,167,358

2,066,629

547,483

556,642(324,177)(323,982)(49,369)(43,529)

1,843,181

1,742,647

498,114513,113

1) Fixed rate financial assets include debt securities;2) Fixed rate financial liabilities include the subordinated debt;
3) Variable rate financial assets include cash and cash equivalents, loans, short-term investments.
4) Variable rate financial liabilities include borrowings and deposits received from reinsurers.

Duration
Duration demonstrates the dependability of a bond’s market value to a change in the underlying discount rate of thatbond. The duration figure depicts the percentage change of the market value of a bond investment if the underlying
discount rate is parallel shifted by 100 basis points or 1.00%. The higher the duration figure, the more a bond issensitive to movements in the underlying discount rate.
38

92

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

Atradius uses the duration to assess its interest rate risk exposure and monitors whether the duration remains
between the minimum and maximum duration limit (between one to five years for government bonds and one tothree years for corporate bonds) as set in the Atradius Investment Policy. The duration is calculated as the weighted
average of the discounted future cash flows to be received measured in years. The duration as per 31 of December
2020 is 2.5 years (2019: 2.3 years) and the average maturity for 2020 is 2.7 years (2019: 2.4 years).

4.3.1.4

Value-at-Risk

Atradius measures equity price and interest rates risk by analysing the value-at-risk (VaR) of its financial
instruments. This risk metric measures the potential maximum loss on those financial instruments due to adverse
movements in equity prices and interest rates within a specified time frame and probability (confidence level). The
VaR is based on variance-covariance methodology that uses the historical volatility of the fair values of the financial
instruments and the correlation between these as main inputs. These volatilities and correlations are provided byfinancial information providers or financial institutions.
The risk of using the variance-covariance methodology or any other historical methodology is that it may
underestimate the riskiness of the financial instruments. This is because these methodologies assume that thehistorical volatility of and correlation between the financial instruments will be repeated in the future. Therefore, it is
not intended to represent or to guarantee any future price movements but rather to be used as guidance for
information purposes and comparison of historical developments only.
The VaR provides insight into the maximum expected loss per asset category and on portfolio level. The fair values
and percentages presented are calculated with a given confidence level of 99% for a period of 12 months. This implies
that there is 1% probability of underestimating the potential maximum loss for the coming 12 months.
The following table shows the VaR of Atradius equity securities and debt securities on portfolio level.
Value-at-Risk

EUR million% of themarket value

2020

EUR million% of themarket value

2019

Equity securities:
Shares (including funds 1))

264.5

76.0%

119.6

33.8%

Government bonds

13.3

2.4%

9.5

1.7%

Corporate bonds

71.3

4.4%

24.1

1.6%

279.2

10.4%

124.9

4.8%

Debt securities:

Total portfolio
1)

It excludes money market funds

The classification of financial investments in the VaR table stated above are based on the actual financial risks that theindividual securities present in the investment portfolio carry. For instance, within debt securities a separation
between government bonds, and corporate bonds is maintained to capture the actual exposure to corporate bonds thatcarry additional credit risk above the risks that government bonds bring along. When individual securities areclassified to the asset class that fits their actual risk profile, the volatility of that asset class is calculated using thevolatility to the financial markets of the underlying securities in that asset class. The volatility of each asset class as awhole serves as input for the VaR calculation of that asset class. In case of an investment fund, the volatility of thefund (driven by the characteristics of its underlying securities) serves as input for the calculation of the VaR on thatspecific investment fund and is subsequently included in the VaR calculation of the asset class. Total portfolio VaR isless than the sum of the VaR of the individual portfolio components because the correlation between thesecomponents is less than one and forms the basis of portfolio diversification. The VaR percentage increased from 4.8%
at the end of 2019 to 10.4% at the end of 2020 and the VaR value increased from EUR 124.9 million at the end of 2019 to
EUR 279.2 million at the end of 2020. The economies have been impacted in 2020 and there is an increased volatility
in the financial markets.

39

93All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

4.3.1.5

Currency risk

Movements in exchange rates may affect the value of consolidated shareholders’ equity, which is expressed in Euro.
Foreign exchange rate differences taken to other comprehensive income arise on the translation of the net investment
in foreign subsidiaries and associated companies. During 2020, the Euro depreciated in value against most of the nonEuro functional currencies (see Note 2.5.3) resulting in a foreign currency lost in other comprehensive income of EUR
29.5 million, net of tax (2019: an income of EUR 11 million, net of tax).
However, the impact of these fluctuations is limited as revenue, expenses, assets and liabilities within our non-Euro
operations are generally denominated in the same currencies.
Atradius exposure to foreign currency exchange rate risk, arising from monetary financial assets and liabilities
denominated in non-functional currencies as at 31 December 2020 and 31 December 2019, is presented in thefollowing table, in EUR:

FinancialassetsFinancialliabilities

Net position

Financialassets2020
EUR

257,697

Financialliabilities

Net position

2019262,118(4,421)

237,983

228,290

9,694

GBP

6,426

9,136

(2,710)14,35322,380(8,028)USD

428,920

336,435

92,485

347,882309,017

38,865

AUD

6,643

8,174

(1,531)

6,921

8,839

(1,918)Other

107,258

215,997(108,739)

117,619

213,144(95,525)

Total

806,944831,860(24,916)

724,758

781,670(56,912)Sensitivity analysis
As an indication of the currency exposure, a 10% strengthening of these foreign currencies against the Euro as at theend of the reporting period would have increased/(decreased) the result for the year by an amount equal to the net
position as presented above, calculated against that 10%. This analysis assumes that all other variables, and inparticular interest rates, remain constant and is performed on the same basis as for 2019. A 10% weakening of theaforementioned foreign currencies against the Euro as at the end of the reporting period would have had an equal but
opposite effect.
The following table specifies Atradius’ gross and net positions in major currencies (both monetary and non-monetary
items), in EUR:

AssetsLiabilities

Net position

Assets2020
EUR

3,830,461

2,297,920

GBP

319,766

256,068

USD

550,009369,291

AUD

110,71258,295

Other569,300

Total

5,380,248

Liabilities

Net position2019
1,532,541

3,708,155

2,060,116

63,698214,218

134,698

79,521

180,718

479,557

312,857

166,700

52,417

96,97051,67345,297

485,380

83,920568,473499,304

69,1693,466,954

1,913,294

5,067,374

3,058,647

2,008,726

40

94

1,648,039

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

4.3.2 Credit risk
Credit risk is the risk that customers or counterparties are unable to repay their debt towards Atradius in full whendue. Atradius exposes itself to credit risk mainly by reinsurance contracts and holding financial assets.
Reinsurance is used to manage insurance risk. This does not, however, discharge the liability as primary insurer. If a
reinsurer fails to pay a claim for any reason, Atradius remains liable for the payment to the policyholder. The Atradiuspolicy is to select only reinsurers that have a well-established investment grade credit rating. The minimum
requirement is an ‘A’ level rating, although there are some minor exceptions. In the event that the reinsurer’s rating isfound to be below this threshold, Atradius has the right to either terminate the reinsurance relationship during thecourse of the reinsurance year or else seek collateral if the relationship is to continue. Deposits received fromreinsurers mitigate the credit risk.
Individual operating units maintain records of the payment history for significant contract holders with whom they
conduct regular business. The exposure to individual counterparties is also managed by other mechanisms, such as
the right of offset where counterparties are both debtors and creditors. Management information reported to Atradius
includes details of provisions for impairment on loans and receivables and subsequent write-offs.
Credit exposure to business partners, such as insured customers and brokers, is closely monitored. Potential
impairments on receivables are reviewed monthly and updated.
With regard to managing the credit risks of the financial investments, the investment policy of Atradius is to hold a,
principally Euro-centric, internationally diversified portfolio and to avoid large risk concentrations. From a Standard& Poor’s rating scale or comparable perspective, the minimum allowed average rating of the overall fixed income
portfolio is A-, whereas investments in individual fixed income securities are allowed a minimum issue rating of BBBat purchase. If a debt security in which Atradius has invested falls below the minimum credit rating or is not rated, itshould be reviewed by the Group Investment Committee to decide whether the debt security is still a suitable
investment. The maximum concentration limit per issuer (per legal entity and at Atradius N.V. level) is 5% of themarket value of the financial investments of the legal entity or Atradius N.V.. The concentration per issuer is evaluatedby aggregating the exposure to a single issuer through both debt investments and equity securities. The Group
Investment Committee monitors this limit and takes action if necessary.
As a result of the Covid-19 pandemic many companies around the world suffered a significant decrease in profitability,
which contributed to rating downgrades of securities. Atradius investment assets were not exempt from the impact
and observed mostly a one notch downgrade on 13.6% of the market value of its 2020 corporate bond portfolio. Despitedifficult market circumstances the fixed income portfolio remains healthy with its average credit rating of ‘A’ inStandard & Poor’s rating scale.
The main objectives of the investment portfolio concentrate on the capital preservation and liquidity, in order tosupport Atradius strategic and operational needs at any given moment in time. Despite the outbreak of the Covid-19
pandemic, the annual review of the investment policy did not lead to any changes in the concentration risk settings, as
the existing restrictions were considered to be sufficient. Atradius has no investment exposure to sectors directly
impacted by the pandemic, however as a precaution the Group Investment Committee closely monitored any
downgrades on the BBB-rated bonds and any major changes in the concentration exposure by issuer throughout theyear.
The counterparty ratings of receivables, short-term investments, claims, commissions and deposits arising fromreinsurance, cash and cash equivalents and the rating of debt securities as at 31 December 2020 and as at 31 December
2019, are presented in the following tables:

41
95

All amounts
amounts inin thousands
thousands ofof Euro,Euro, unlessunless otherwise
otherwise statedstatedAll

At 31 December 2020

AAA

AA

A

BBB

Other andNon-rated

Total

62

277

273

28

29

669

-

(20)

(16)

(13)

(0)

(49)

Government bonds

244

257

12

24

12

549

Corporate bonds

23

160

809

619

6

1,618

-

7

6

4

6

22

39

13

27

22

-

100

-

39

321

47

18

425

Total

368

733

1,432

731

71

3,335

At 31 December 2019

AAA

AA

A

BBB

Other andNon-rated

Total

Receivables, claims and commissions
arising from reinsurance

-

209

249

1

29

488

Deposits received from reinsurers

-

(3)

(38)

-

(2)

(44)

Government bonds

252

234

38

9

30

563

Corporate bonds

19

148

897

439

1

1,504

-

9

9

1

5

24

(EUR million)
Receivables, claims, commissions anddeposits arising from reinsurance:
Receivables, claims and commissions arisingfrom reinsurance
Deposits received from reinsurers
Debt securities:

Short-term investments:
Deposits withheld by ceding companies
Bank deposits under short-term
investments
Cash and cash equivalents(EUR million)
Receivables, claims, commissions anddeposits arising from reinsurance:

Debt securities:

Short-term investments:
Deposits withheld by ceding companies
Bank deposits under short-term
investments
Cash and cash equivalents (1)
Total

39

14

40

35

-

128

-

32

302

52

19

405

310

643

1,497

537

82

3,068

The counterparty credit ratings and the credit rating of debt instruments are predominantly based on Standard &Poor’s rating.

4.3.2.1

Temporary exemption from IFRS 9

Atradius has decided to apply the temporary exemption for the application of IFRS 9 to its financial assets (see Note
2.2.2 ‘Standards, amendment and interpretation not yet adopted’). The financial assets for financial year ending 31
December 2020 are still classified and measured based on IAS 39 (see Note 10 ‘Financial investments’ and Note 2.2.2‘Standards, amendment and interpretation not yet adopted’). The disclosure below provides information required forthe application of the temporary exemption.
IFRS 9 classification of financial assets is based on assessment of the business model and the contractual cash flows of
the instruments. Contractual cash flows are assessed to check if the asset gives rise to payments on specified dates thatare solely payments of principal and interest (“SPPI”) on the principal amount outstanding.
Contractual cash flows that are SPPI on the principal amount outstanding are consistent with basic lending
arrangements. Interest is the consideration for the time value of money and the credit risk associated with theprincipal amount outstanding during a particular period of time. It can also include consideration for other basic risks
4296Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

(e.g. liquidity risk) and costs (e.g., administrative costs) associated with holding the financial assets for a particularperiod of time, and a profit margin that is consistent with a basic lending agreement.
The table below presents an overview of the fair values of financial assets based on SPPI criteria as at 31 December
2020, as well as the changes in the fair values during the year. The asset classes are divided into two categories:-

SPPI: Assets of which cash flows represent solely payment of principal and interest on an outstanding principal
amount, excluding any financial assets that meet the definition of held for trading in IFRS 9, or that are managed
and whose performance is evaluated on a fair value basis; and-other: all financial assets other than those specified in SPPI financial assets:
I.

With contractual terms that do not give rise on specified dates to cash flows that are solely paymentof principal and interest on the principal amount outstanding;II.

That meet the definition of held for trading in IFRS9 or that are managed and whose performanceare evaluated on a fair value basis.
Change in fair
value

Fair Value at(EUR million)

2020

2019

Debt securities:(Government bonds + Corporate bonds)

2,167

2,067

100

SPPI

2,164

2,061

103

Other

4

5

(1)

Equity securities:

389

370

19

SPPI

-

-

-

Other

389

370

19

Short-term investments:

123

152

(29)

SPPI

123

152

(29)

Other

-

-

-

Cash and cash equivalents

425

404

21

SPPI

425

404

21

Other

-

-

-

Total

3,104

2,993

111

The credit ratings of the financial assets included the SPPI test (debt securities, bank deposits under short-term
investments and cash and cash equivalents) are included in the counter party rating table in section 4.3.2
No impairment allowance was recorded for those financial assets as at 31 December 2020 .
For information on credit exposure of ‘Other accounts receivables’, See Note 11.

4.3.3 Liquidity risk
Atradius is exposed to liquidity risk if there is insufficient cash available to meet its financial obligations, when due, ata reasonable cost. For Atradius, liquidity risks may arise if large scale short-term fluctuations occur to cash flows, suchas a decline in incoming cash or a rise in outgoing cash, or a combination of both.
Liquidity risk is managed at Atradius level, in close coordination with local operations. Atradius’ policy is to monitor
and measure ongoing cash flow patterns and control liquidity by maintaining sufficient cash and highly marketablesecurities to reduce liquidity risk to acceptably low levels. The investment policy states that Atradius should only
invest in financial instruments that can be liquidated in less than three business days. Atradius is able to access credit
facilities to prevent certain liquidity shortages which may arise due to short-term cash flow variances. Atradius
maintain one uncommitted credit line in excess of EUR 1 million, in the form of an overdraft facility for a total amountof EUR 50 million (2019: EUR 50 million). The credit line provides liquidity to cover infrequent peaks in short-term
liquidity requirements while also permitting Atradius to reduce its cash balances and to benefit from a more
substantial and stable investment portfolio. Finally, Atradius has in place a simultaneous claims payment clause in themain reinsurance treaties. This clause allows Atradius to ask the reinsurers to anticipate the payment of a large claim
upon Atradius’ request instead of the usual payment terms agreed in the reinsurance treaties.
43

97

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedLiquidity and interest risk tables
The following tables indicate the estimated amount and timing of the main cash flows at the end of the reporting
period of interest and non-interest bearing liabilities and assets. The tables include both interest and principal cash
flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves
at the end of the reporting period. Atradius has considered the impact of the cross-border cash pooling arrangement inthis overview.
The tables have been drawn up based on the undiscounted contractual cash flows of financial liabilities based on theearliest contractual repayment date. When Atradius has a choice of when an amount is paid, the financial liability isallocated to the latest period in which Atradius can be required to pay. When the lender has a choice of when an
amount is paid, the financial liability is allocated to the earliest period in which Atradius can be required to pay.

At 31 December 2020

Contractual cash flows (undiscounted)
Weighted
averageeffective
interest rate%

On demand

Less than 1
year

1 to 5 years

Subordinated note

5.35%

Subordinated loan

5.00%

-

13,125285,802-76,120Bankoverdraft

0.00%

-

-

Deposits received fromreinsurers

0.20%

-

> 5 years

Carrying
amountInterest bearing liabilities
249,177-

75,000---49,369--49,369-138,614285,802-373,546

Insurance contracts-

1,300,531

577,943(473)

1,902,726

Payables-378,595--

378,595

Total-

1,679,126

577,943(473)

2,281,321

At 31 December 2019

Contractual cash flows (undiscounted)

Total
Non-interest bearing liabilities

Weighted
averageeffective
interest rate%

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountSubordinated note

5.35%

-

13,125298,927-

248,982

Subordinated loan

5.00%

-

3,750

76,120-75,000Bankoverdraft

0.00%

-

-

-

Deposits received fromreinsurers

0.42%

-

43,529--43,529-60,404

375,047-

367,511

Insurance contracts-

1,155,589

535,943(9,882)

1,706,229

Payables-178,682--

178,682

Total-

1,334,271

535,943(9,882)

1,884,911

Interest bearing liabilities

Total

-

Non-interest bearing liabilities

44

98

Atradius || Consolidated
Atradius
Consolidated financial
financialstatements
statements2020
2020Atradius
AtradiusN.V.
N.V.

At 31 December 2020

Contractual cash flows (undiscounted)
Weighted
averageeffective
interest rate%

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountDebt securities
Investments: deposits and cash
held for investments-0.04%-

575,057

1,523,640

84,8552,167,358

0.19%

33,12489,727--

122,742

Cash: Cash and bank deposits-0.03%

Interest bearing assets

422,546

2,195

-

-

424,741455,670

666,979

1,523,640

84,8552,714,841

Other financial assets 1)-

388,735--

388,735

Reinsurance contracts-

588,982

261,737(214)

850,505

Receivables-

245,004--

245,004

Total-

1,222,721

261,737(214)

1,484,244

At 31 December 2019

Contractual cash flows (undiscounted)

Total
Non-interest bearing assets

Weighted
averageeffective
interest rate%

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountDebt securities
Investments: deposits and cash
held for investments

0.21%

-

550,2131,480,960

70,756

2,066,629

0.48%

44,699108,413--

152,390

Cash: Cash and bank deposits

0.01%

399,307

4,937

-

-

404,244444,006

663,563

1,480,960

70,7562,623,263

Other financial assets 1)-

370,146--

370,146

Reinsurance contracts-

420,278

194,918(3,594)

611,602

Receivables-

239,565--

239,565

Total-

1,029,989

194,918(3,594)

1,221,313

Interest bearing assets

Total
Non-interest bearing assets

It includes shares, loans and recivables and investments in group non consilidated entities

1)

4.4

Operational risk

4.4.1 Operational risk management
Operational risk means the risk of loss arising from inadequate or failed internal processes, personnel or systems, orfrom external events. This definition is in line with industry practice as well as with the European Solvency II
Directive. It is present within all activities undertaken by Atradius, at all levels and across all locations.
The Operational Risk and Control (ORC) unit is part of the Group Risk Management department it is responsible fordeveloping methods for the identification, assessment and response to risks, and for monitoring and further
enhancing the overall risk management and control framework. The ORC unit works closely with both Internal Audit
and the Legal and Compliance unit. At the highest level, operational risk is overseen by the Operational Risk
Committee, which has a reporting line to the RSMB.
45

99

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

The ORC unit uses a framework for management of operational risk, which is based on the Committee of Sponsoring
Organisations’ Enterprise Risk Management (COSO ERM) Integrated Framework. Identification and monitoring
activities continue to be developed and enhanced, including the maintenance of risk registers, facilitation of risks andcontrol self-assessments, capture of risk indicators and testing and review of business continuity plans. Additionally,risks and the related controls are discussed at all levels, locations and units across the business, including theManagement Board and Supervisory Board. High-level information on crystallised risks has been captured for several
years, with separate records of information technology risk events stretching back even further. To provide oversightand assurance in an auditable and efficient manner, the ORC unit employs a dedicated governance, risk andcompliance software platform (the ’GRC portal‘) that integrates existing risk management activities across thebusiness.
In respect of external fraud, the Fraud Control Group, composed of employees across various locations, monitors theactivity of customers and buyers to detect indications of fraud. Atradius also provides fraud awareness training andadvice to employees and customers to help identify fraudulent buyers. Internal fraud is addressed through manualand automated operational controls such as the segregation of duties, application of signing authorities and role-based
system privileges and authorities.
More details on certain operational risk management activities are provided below.

4.4.1.1

Risk registers and risk / control self-assessments

While the ORC unit is responsible for facilitating operational risk management within Atradius, the lines of businessand functional areas are responsible for managing their operational risks. Atradius Leadership Team members,
assisted by ‘risk champions’, maintain risk registers for their respective units. The content of the registers provides
input to local management meetings and is also reviewed by an Operational Risk Committee and during meetings ofthe Management Board. This ensures that operational risks are evaluated from all management perspectives.
While risk registers use a top-down approach to capturing risks, Atradius also uses a bottom-up approach of control
self-assessments to identify and assess risks and any control weaknesses inherent in business processes.
On a quarterly basis, Atradius conducts specific assessments of processes and controls covering financial reporting
risks, including reporting for regulatory compliance purposes; the resulting ‘in control’ sign-off process is overseen by
a committees with representatives from Group Risk Management, Finance and Internal Audit.

4.4.1.2

Business continuity management

Atradius recognises the importance of being able to recover its critical business processes in the event of any major
operational disruption. A Business Continuity Management (BCM) programme is embedded in the organisation toensure the continuity of the Business in the event of severe disruptions. The BCM programme is aligned with theInternational Standard ISO22301. The Group Business Continuity manager co-ordinates the documentation,
maintenance and continual testing of practical plans for recovering key business activities within acceptable
timeframes.
Covid-19 – Following the initial ‘lockdowns’ in most countries and travel bans, actions were taken to ensure humanresource and IT capabilities were sufficient to maintain the expected level of customer service and to manage the risk
exposure. Many staff are working remotely and will continue to do so as necessary. IT systems have remained stable
and collaboration tools have been enhanced for the whole workforce. Overall service to customers and all othercounterparties is being maintained.
As subsequent lockdowns occur in various geographies, the arrangements established in the first half of the year
ensure that the Company is prepared for all eventualities. The Group Incident Management Team (comprised of theManagement Board and additional senior management from relevant departments) meets regularly, monitors thesituation globally and locally and takes action where required.

4.4.1.3

Compliance Framework

Compliance practices support our business, our reputation and our integrity. Complying with relevant laws, rules andregulations, and maintaining a high standard of ethics and integrity, leads to lower operational risk and more-stablebusiness processes. The Atradius Code of Conduct outlines the basic corporate, legal and ethical compliance principles
and guidelines that apply to all our employees and that govern the Atradius operations and business conduct.
46100

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

Additional Compliance Policies address specific compliance areas in more detail, and set out the requirements that
Atradius’ employees must adhere to. These requirements are also included in existing and new business procedures.
For example, the Policy on Customer Due Diligence and Policy on Sanctions address potential sanctions risks.
Atradius has also implemented a Data Protection Framework, which includes controls, policies and procedures tocomply with the applicable data protection legislation.
The Compliance Function –led by the Group Compliance Function- supports the management of Atradius in meeting
its objective of being compliant with applicable laws, rules and external and internal regulations. The Group
Compliance Function is responsible for the maintenance and overall effectiveness of the compliance framework and,the Local Compliance Function monitors regulatory and compliance developments at local country level.

4.4.1.4

BrexitBrexit affects, amongst others, regulations, including passporting rights and may also affect financial reporting. The
UK left the EU on Friday 31 of January 2020 enabled by the Withdrawal Agreement agreed between the EU and the
UK Government. The structured withdrawal provided for a transition period (or ‘implementation period’) until 31
December 2020. Accordingly, from 1 January 2021, all legal and regulatory arrangements permitted under thetransition ceased – for financial services the passporting rights (Freedom of Services & Freedom of Establishment)
ended. To mitigate the impact of this change, Atradius applied to the UK’s Prudential Regulatory Authority [PRA] for
authorisation as a Third Country Branch [TCB] and dialogue with the PRA has been progressing positively. In themeantime, from 1 January 2021, Atradius has continued to operate ‘as if’ authorised as a TCB, under the Bank ofEngland’s Temporary Permissions Regime, which will be in place for up to three years.
A customer contingency plan to minimise the impact of Brexit was developed and communicated to impacted
customers and brokers. During 2020, the UK underwriting teams implemented a reduction in risk appetite, notably
for those companies that are most vulnerable to the impacts of Brexit and took risk mitigation actions resulting in
avoidance of losses.
A Brexit Taskforce comprising Legal, Compliance, Commercial, Risk Services, IT and Collections representatives
continues to monitor the situation as it develops post-Brexit.

4.5

Capital management

4.5.1 Guiding principles
Capital management is guided by the following principles:-to ensure that Atradius is sufficiently capitalised to have the ability to survive by maintaining sufficient available
capital after meeting its financial obligations;
to meet the local regulatory capital requirements of all Atradius entities, including branches and subsidiaries ofAtradius worldwide;
to manage the capital adequacy of Atradius and its entities, taking into account the economic and accounting
views along with the external rating agencies and regulatory capital requirements;
to optimise capital structure by allocating funds across Atradius’ entities; andto minimise the overall cost of funding while preserving financial flexibility.

4.5.2 Atradius' objectives, policies and processes with regard to capital
The Company shows a robust capital and solvency position which is not expected to be materially impacted fromfurther economic downturns arising from the pandemic
Atradius manages capital worth more than two billion euro. Per year-end 2020, the capital includes shareholders’funds of EUR 1.9 billion and subordinated debt of EUR 325 million (nominal value). The subordinated debt includes
subordinated notes of EUR 250 million (nominal value) and a subordinated loan of EUR 75 million. The subordinatednotes and the subordinated loan are classified as Level 2 and as Tier 2 basic own funds for Solvency II.
In addition to the internally developed economic capital model, Atradius considers the solvency calculation models of
the relevant regulatory authorities and credit rating agencies in its process of managing capital.
In order to ensure capital adequacy, a capital buffer above the solvency capital required is maintained, such that large
loss events would not impair the ability of Atradius to carry on its normal course of business and the ambition tomaintain an ‘A’ rating level is sustained.
47

101

All amounts
amounts inin thousands
thousands ofof Euro,Euro, unlessunless otherwise
otherwise statedstatedAll

Atradius has embedded processes and procedures to ensure compliance with externally imposed regulations andinternally imposed requirements for capital adequacy. Such compliance is ensured by:-regular assessment of solvency needs, taking into account the business strategy, resulting risk profile and applied
risk appetite levels;
incorporating a view on expected future investments in new businesses, revenues, claims, reinsurance
expectations and dividends as these impact both available and required capital;
monitoring duration of assets; andtaking into consideration capital market expectations such as expected returns, volatilities and correlations asthese may impact earnings and the shareholder equity reserves.

4.5.3 Regulatory capital requirements
In each country in which Atradius operates with insurance or reinsurance companies established according to local
laws, and where prescribed for branches as well, the local insurance regulator specifies the minimum amount andtype of capital that must be held by each of the subsidiaries or branches. The minimum required capital must be
maintained at all times throughout the year. In addition, the local insurance regulators have the discretionary right toimpose additional capital requirements in excess of the required minimum.
In 2020, the capital of Atradius has been managed according to the Atradius guidelines and in close cooperation withthe units involved. The Atradius entities were able to meet their financial obligations and to comply with local legal
and regulatory requirements.

4.5.4 Solvency II
Solvency II is the regulatory framework for (re-)insurance undertakings and groups domiciled in the EU.
Atradius Crédito y Caución, S.A. de Seguros y Reaseguros in Spain and Atradius Reinsurance DAC in Ireland are theregulated entities that are subject to Solvency II. Under Solvency II guidelines Group supervision takes place at theultimate parent Grupo Catalana Occidente S.A.
After approval by the College of Supervisors during 2017, the regulated entities within Atradius apply a Partial
Internal Model for calculating their regulatory capital requirements. An internal model, which reflects our businessbetter than the regulatory “standard formula”, is used to calculate capital requirements for Underwriting Risk.
Atradius uses the standard formula for Market, Counterparty Default and Operational Risk as the characteristics ofthese risk types do not warrant an internal model approach.
As per year end 2020 the eligible own funds under Solvency II for the Company amounts to EUR 2,173 million (2019:
EUR 2,277 million).

5

Segment information

Operating segments are identified on the basis of internal reports about components of Atradius that are regularly
reviewed by the Management Board in order to allocate resources to the segment and to assess its performance. The
company has identified two operating segments, insurance and services. Within the insurance segment there aredifferent business activities Credit insurance, Instalment credit protection (ICP), Bonding and Reinsurance. The
segment Services includes Collection activities, Atradius Dutch State Business and other service related business.
Group costs relate to corporate operations, after cost allocations to the other business segments.
Collection activities include recovery activities on behalf of insurance companies. Transactions between segments areon an arm’s length basis in a manner similar to transactions with third parties. The accounting policies of thereportable segments are the same as described in Note 2.
Atradius revenue has no dependency on any large customer.
Information regarding these segments is presented in the following tables:

48

102

Atradius || Consolidated
Consolidated financial
financial statements
statements 2020
2020 Atradius
Atradius N.V.
N.V.
Atradius

Business segment

Creditinsurance

Bonding Reinsurance

Total
insurancebusiness

Services

Intersegment
elimination

Group
costs

Total

Insurance premium revenue

1,453,060

123,586

150,764

1,727,410---

1,727,410

Service and other income

133,071--

133,071

118,927--

251,998

2020

Inter-segment revenue

-

-

-

-

3,380

(3,380)--Total revenue

1,586,131

123,586

150,764

1,860,481

122,307(3,380)-1,979,408

Insurance premium ceded toreinsurers(821,278)(50,178)(27,904)(899,360)---(899,360)

Total segment income after
reinsurance

764,853

73,408122,860

961,121122,307(3,380)-1,080,048

Insurance claims and loss
adjustment expenses(927,362)(38,183)(124,617)(1,090,162)

-

2,622

-

(1,087,540)

Insurance claims and loss
adjustment expenses
recovered from reinsurers

513,761

15,12823,649552,538---

552,538

Net insurance claims(413,601)(23,055)(100,968)(537,624)

-

2,622

-

(535,002)

Gross operating expenses(554,031)(43,431)(58,572)(656,033)(120,862)

759(8,420)(784,556)

Commission received forbusiness ceded to reinsurers

295,129

19,412

4,134

318,675---

318,675

Net operating expenses(258,902)(24,019)(54,438)(337,359)(120,862)

759(8,420)(465,881)

Operating segment result

92,35026,334(32,546)

86,1381,445

1(8,420)79,165

Share of income/ (losses) of
associated companies

3,008

Net income from investments

11,314

Finance income

2,608

Finance expenses(18,089)

Result for the year before tax

78,006

Income tax expense(33,839)

Result for the year

44,167

Business segment

Creditinsurance

Bonding

Reinsurance

Total
insurancebusiness

Services

Intersegment
elimination

Total

Reinsurance contracts

638,686

154,941

56,878

850,505--

850,505

Receivables

218,019

21,2803,057

242,356

5,664(3,016)

245,004

-

-

-

-

-

-

4,284,739

Total assets

856,705

176,22159,935

1,092,861

5,664(3,016)

5,380,248

Insurance contracts

1,167,214

321,455

414,057

1,902,726--

1,902,726

Payables342,906

32,841

588

376,335

15,730(13,469)

378,595

-

-

-

-

-

-

1,185,633

1,510,120

354,296414,6452,279,061

15,730(13,469)

3,466,954

2,704

143

27

2,874

629

-

3,503

2020

Unallocated assets

Unallocated liabilities
Total liabilities
Total year end number of employees(full-time equivalent)

49

103

All amounts
Allamounts inin thousands
thousandsof
ofEuro,Euro,unlessunlessotherwise
otherwisestatedstatedBusiness segment

Creditinsurance

Bonding

Reinsurance

Total
insurancebusiness

Services

Intersegment
elimination

Group
costs

Total

Insurance premium revenue

1,496,618

122,687

140,218

1,759,523---

1,759,523

Service and other income

136,500--

136,500

115,997--

252,497

-

-

-

-

3,390

(3,390)--Total revenue

1,633,118

122,687

140,218

1,896,023

119,387(3,390)-2,012,020

Insurance premium ceded toreinsurers(608,553)(50,892)(25,843)(685,288)---(685,288)

Total segment income after
reinsurance

1,024,565

71,795

114,375

1,210,735

119,387(3,390)-1,326,732

Insurance claims and loss
adjustment expenses(772,192)(47,271)(75,426)(894,889)

-

2,578

-

(892,311)

Insurance claims and loss
adjustment expenses
recovered from reinsurers

334,141

17,862

18,092370,095---

370,095

Net insurance claims(438,051)(29,409)(57,334)(524,794)

-

2,578

-

(522,216)

Gross operating expenses(562,994)(51,985)(57,447)(672,425)

813(7,601)(795,600)

Commission received forbusiness ceded to reinsurers

292,237

20,4993,761

316,497---

316,497

Net operating expenses(270,757)(31,486)(53,686)(355,929)(116,386)

813(7,601)(479,103)

Operating segment result

315,757

10,9003,355

330,0123,001

1(7,601)

325,4132019

Inter-segment revenue(116,386) 1)

Share of income/ (losses) of
associated companies
Net income frominvestments

18,776

Finance income

2,629(1,093)Finance expenses
Result for the year before
tax

312,838

Income tax expense(85,130)

Result for the year

227,708

Business segment(32,887)

Creditinsurance

Bonding

Reinsurance

Total
insurancebusiness

Services

Intersegment
elimination

Total

Reinsurance contracts

398,389

163,090

50,123

611,602--611,602

Receivables

208,066

20,6787,518

236,262

6,643(3,340)239,565

2019

-

-

-

-

-

-

4,216,206

Total assets

606,455

183,768

57,641

847,864

6,643(3,340)5,067,373

Insurance contracts

990,803

328,042

387,384

1,706,229--

1,706,229

Payables142,332

33,240778

176,350

18,363(16,030)

178,682

-

-

-

-

-

-

1,173,736

1,133,135

361,282

388,162

1,882,579

18,363(16,030)

3,058,647

2,708

149

28

2,884

646

-

3,530

Unallocated assets

Unallocated liabilities
Total liabilities
Total year end number of
employees (full-time equivalent)

50

104

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

The segmental reporting follows the management point of view. In all the other insurance related notes the figures arereported based on the products of credit insurance and bonding which differs from the segmental view presented
here. The underlying contracts of the Reinsurance segment are approximately 60% credit insurance contracts andapproximately 40% bonding (2019: 61% and 39% respectively), based on premium volume.

51

105

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated6

Intangible assets

2020

Goodwill

Software

Other 1)Total

At cost at 1 January

151,425

305,339

30,468487,232-

39,151-

39,151

Additions
Disposals-(6,004)-(6,004)

Effect of movements in foreign exchange rates(2)(6,000)(92)(6,094)

At cost at 31 December

151,423

332,486

30,376514,285

Accumulated amortisation and impairments at 1 January(10,736)(191,766)(27,029)(229,531)

Amortisation charge for the year-

(14,411)(1,144)(15,555)

Disposals

-

5,061

-

5,061

Impairment(3,000)(16,830)-(19,830)

Effect of movements in foreign exchange rates
Accumulated amortisation and impairments at 31 December(13,736)

4,336(213,610)

92(28,081)4,428(255,427)

Balance at 1 January

140,689

113,573

3,439

257,701

Balance at 31 December

137,687

118,876

2,295

258,858

+
+ +

++

++

++

2019

Goodwill

Software

Other 1)Total

At cost at 1 January

151,284

258,984

30,440440,708146

48,240-48,386

Disposals-(6,996)-(6,996)

Effect of movements in foreign exchange rates

(5)

5,111

28

5,134

151,425

305,339

30,468487,232(736)(160,817)(25,858)(187,411)

Amortisation charge for the year-

(26,522)(1,143)(27,665)

Disposals

-

6,216

-

6,216

Additions

At cost at 31 December
Accumulated amortisation and impairments at 1 January

Impairment(10,000) -(7,097)-(17,097)

Effect of movements in foreign exchange rates
Accumulated amortisation and impairments at 31 December(10,736)(3,546)(191,766)(28)(27,029)(3,574)(229,531)

Balance at 1 January

150,548

98,167

4,582

253,297

Balance at 31 December

140,689

113,573

3,439

257,701

1) Other intangible assets relate to agent networks, non-patented technology, trade names and insurance portfolios

Goodwill
If applicable, impairment of goodwill is included as part of Finance expenses (see note 28). Atradius assessed all
goodwill for impairment. Based on the update of the business plan's short term assumptions, Atradius decided topartly impair the goodwill on Graydon Holding N.V (EUR 3 million in 2020 vs EUR 10 million in 2019).

52

106

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

The goodwill allocated to the main cash-generating units or groups of units (CGU’s) is presented in the following table:
Cash-Generating Units

2020

2019

ACyC 1)

98,797

98,797

Graydon Holding N.V.

17,931

20,931

Atradius Trade Credit Insurance Inc.

4,750

4,750

Atradius Collections B.V.

6,426

6,426

ACyC. (France)

2,767

2,767

2,566

2,568

Other

4,450

4,450

Total

137,687

140,689

ACyC (Nordic bonding)2)1) The CGU ACyC includes the local business in Spain and Portugal.
2) The Nordic Bonding unit includes Atradius’ bonding business in Denmark, Norway, Sweden and Finland.

The value in use of an individual CGU is determined using a dividend discount model (DDM), except for Graydon
which is determined using discounted cash flow model (DCF). The dividend flows are estimated using a projection
period and a normalised period. The projection period is 10 years towards covering a through-the-economic cycle
performance, where the first 1-4 year projections are based on financial budgets and/or forecasts. In the budgets andforecasts the impacts of the changed macro-economic situation due to the Covid-19 pandemic situation are taken into
account. The remaining years are estimated using ratios and growth rates that converge towards their normalised
term value. The discount rate, gross of tax, varies depending on the Risk-Free Rate and the Country Risk Premium of
the country where the CGU is located. For those CGUs with Goodwill higher than EUR 10 million, the discount rate
stays between 6.8% and 8.2% and the growth rate between 1% and 1.5% . The terminal value is calculated based on thedividend flows of the normalised period through a perpetuity which applies a long-term growth rate of 1%-1.5% (2019:1%-2% and the specific discount rate. Any profits, after fulfilling minimum capital requirements, are assumed to be
distributable dividends. Minimum capital requirements are calculated taking into account local solvency rules, theSolvency II Partial Internal Model and minimum shareholders equity required (non-distributable).
At 28 December of 2020, ANV, through its subsidiarie AIH, continued supporting operations for Graydon in theuncertain economic environment derived from Covid-19, with a capital injection of EUR 5 million.
CGU are defined by line of business according to the way we manage and steer the operational business.
An approximation of the sensitivity of the following assumptions would impact the CGU market value by thepercentages shown below (other CGU are not included due to immaterial impacts):

53

107

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

Discount rate

Growth rate

2020

+50bp -50bp+50bp -50bp

ACyC

-4.8%

Graydon Holding

Cash-Generating Units

Combined ratio

Solvency ratio

1)

2)

+50bp

-50bp

-0.3%

-2.2%

2.2%

-4.6%

4.6%

-10.9% 13.2%

13.7% -11.3%

11.3%-11.3%

0.0%

0.0%

Atradius Trade Credit Insurance Inc.

-14.0% 20.5%

16.2% -11.1%

-3.4%

2.3%

-0.1%

-0.1%

Atradius Collections B.V.

-23.0% 40.1%

34.1% -19.6%

0.0%

0.0%

0.0%

0.0%

ACyC (France)-17.6% 28.3%

23.4% -14.5%

-0.1%

6.5%

-3.0%

14.3%

-13.6% 21.6%

17.5% -10.8%

-0.1%

5.0%

-2.9%

2.8%

Discount rate

Growth rate

2019

+50bp -50bp+50bp -50bp

ACyC

-6.1%

7.1%

1.2%

Graydon Holding

-7.5%

9.2%

Atradius Trade Credit Insurance Inc.

-5.6%

7.0%

ACyC (Nordic bonding)Cash-Generating Units

5.5%

0.3%

Combined ratio

Solvency ratio

1)

2)

+50bp

-50bp

-1.1%

-3.6%

3.6%

-4.6%

4.6%

7.2%

-5.9%

12.0% -12.0%

0.0%

0.0%

7.3%

-5.8%

-2.7%

2.8%

0.0%

0.0%

0.0%

Atradius Collections B.V.

-19.8% 34.2%

34.8% -20.2%

ACyC (France)-15.2% 24.8%

25.3%

ACyC (Nordic bonding)

-7.7%

12.3%

12.0%

+1,000bp -1,000bp+1,000bp -1,000bp

0.0%

0.0%

0.0%

-15.5%

-5.7%

5.7%

0.0%

0.0%

-7.9%

-4.2%

4.2%

-4.0%

3.5%

1)

For Graydon, as a non-insurance CGU, the profitability variable used has been the EBITDA and the sensitivities are shown in this column.

2)With the same required capital.

No sensitivity analysis mentioned above would assume that the carrying amount of the GCUs would exceed theirmarket value, except for Graydon.
SoftwareAtradius assessed all capitalised software to determine if the criteria for capitalisation are being met (see note 2.6.2).
Based on this assessment Atradius decided to impair EUR 16.8 million (2019 EUR 7.1 million) of self-developed
software since it did not satisfy all set requirements. During 2020 Atradius has capitalised EUR 32.6 million mainly
due to Atradius Business Transformation project (2019: EUR 42.5 million).

54

108

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

7

Property, plant and equipment & investment property

2020

Land &
buildings

Fixtures &fittings

IT
hardwareRight of
Use assets

Total
property,plant &
equipment

Investment
property

At cost at 1 January

107,01065,48455,541

107,851

335,886

18,195Additions

365

7,108

7,205

27,12541,803-

Disposals-(2,140)(3,045)(3,628)(8,813)(592)

Reclassification
Effect of movements in foreignexchange rates(16,573)---(16,573)

16,573

(211)

(315)

(1,187)(2,337)(4,050)(82)

At cost at 31 December

90,591

70,13758,514129,011348,253

34,093

Accumulated depreciation andimpairments at 1 January(13,967)(44,421)(44,812)(22,635)(125,834)(4,207)

Depreciation charge for the year

(991)

(4,544)(5,783)(22,314)(33,632)(249)

Disposals

-

2,007

2,958

2,072

7,037

117

Impairment / reversal impairment

13

-

-

-

13

27

Reclassification
Effect of movements in foreignexchange rates
Accumulated depreciation andimpairments at 31 December

3,379

-

-

-

3,379

(3,379)

37

150

806

618

1,611

10

(11,529)(46,808)(46,830)(42,259)(147,426)(7,681)

Balance at 1 January

93,04321,063

10,72885,216210,051

13,988

Balance at 31 December

79,061

23,329

11,68486,752200,827

26,413

55

109

All
of Euro,Euro, unlessunless otherwise
otherwise statedstatedAll amounts
amounts inin thousands
thousands of2019

Land &
buildings

Fixtures &fittings

IT
hardwareRight of
Use assets

Total
property,plant &
equipment

Investment
property

At cost at 1 January

111,608

63,65652,826-228,090

14,609Business combinationsFirst time adoption as per 1st
January 2019

-

-

-

-

-

-

-

-

-

101,692

101,692-

Additions

-

4,653

3,374

5,694

13,721-

Disposals-(3,504)(1,661)(689)(5,854)(1,135)

Reclassification
Effect of movements in foreignexchange rates(4,685)---(4,685)

4,685

87

679

1,002

1,154

2,922

36

At cost at 31 December
Accumulated depreciation andimpairments at 1 January

107,01065,48455,541

107,851

335,886

18,195(12,506)(42,989)(40,278)-(95,773)(4,968)(1,115)(4,399)(5,486)(22,698)(33,698)

(134)

-

3,506

1,651

176

5,333

457

Impairment / reversal impairment

69

-

-

-

69

42

Reclassification
Effect of movements in foreignexchange rates
Accumulated depreciation andimpairments at 31 December

(400)

-

-

-

(400)

400

(14)

(539)

(699)

(113)

(1,365)(4)(13,967)(44,421)(44,812)(22,635)(125,834)(4,207)

Balance at 1 January

99,102

20,667

12,548-132,317

9,641

Balance at 31 December

93,04321,063

10,72885,216210,050

13,988Depreciation charge for the year
Disposals

The depreciation charge on property for own use is reported as part of net operating expenses. The depreciation
charge on investment property is reported as part of net income from investments.

The fair value of land and buildings for own use and of investment property is presented in the following table:
Property own use

Investment property

2020

2019

2020

2019

Spain and Portugal

77,79689,024

21,25912,713

Italy

20,65021,020681

681

Mexico

4,026

4,463

1,342

1,488

Other

1,065

1,001

-

-

Total

103,537

115,50723,282

14,882

Fair value measurement
Land and buildings are independently appraised by real estate valuers, which are registered in the relevant countries
and have appropriate qualifications and experience in the valuation of properties. Atradius usually revalues land andbuildings every two years.
All significant inputs used in the measurement are market observable and the fair value is therefore classified in Level
2 in the fair value hierarchy (as in 2019). Valuation techniques used are: Market (comparison) approach, Income
approach (discounted cash flow method) and Cost approach. Significant valuation inputs used to determine the fair
56

110

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

value measurements based on techniques used are construction features, location (and/or conditions) and transportutilities.
The estimated fair value of the properties is directly dependant on the changes of the inputs used. There has been nochange in the valuation techniques used compared to prior year.
The investment property can be classified as follows: 94% office (2019: 90%) and 6% retail (2019: 10%).
Direct operating expenses incurred (including repairs and maintenance) arising from investment property are EUR 29
thousand (2019: EUR 77 thousand). During the year an amount of EUR 513 thousand (2019: EUR 607 thousand) has
been recognised as rental income from investment property for lease contracts. These contracts have remaining termsof between 1 and 10 years. Expected rental income arising from these contracts for next year is EUR 402 thousand for
non-cancellable contracts (In 2019, expected rental income for next year was 673 thousand for non-cancellable
contracts).
Leases: Right of Use Assets
Right of Use assets consist of office space (94%), including parking and vehicles under a number of operating leaseagreements. The most significant lease contracts relate to the offices in our locations in Western Europe. The
remaining terms of these office rentals vary between 2 to 12 years and most of the contracts contain extension
options. The extension options are taken into account in the measurement of lease liabilities when the Group isreasonably certain to exercise these options.
Further information about the leases for which Atradius is a lessee is presented below:
2020

2019

88,14485,038Interest expenses on lease liabilities(2,196)(2,552)

Expenses relating to short-term leases

(580)

(118)

Expenses relating to low-value assets

(26)

(17)

26,18316,094

Lease liability included in statement of financial position at 31 December (see Note 22)
Amounts recognised in income statement :Amounts recognised in the statement of cash flows :Total cash outflow for leases

57

111

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated8

Subsidiaries

The following table sets forth, as at 31 December 2020 and 2019, the name and country of incorporation of the main
subsidiaries of Atradius N.V.
All companies are, directly or indirectly, wholly owned unless otherwise indicated. The companies are listed inalphabetical order.

Country ofincorporation% interest
heldType of business

Atradius Collections B.V.

The Netherlands

100%Collections

Atradius Collections Holding B.V.

The Netherlands

100%Collections

Spain

100%

Credit insurance

Atradius Finance B.V.

The Netherlands

100%

Finance

Atradius Information Services B.V.

The Netherlands

100%

Information services

Atradius Insurance Holding N.V.

Atradius Crédito y Caución S.A. de Seguros y Reaseguros

The Netherlands

100%

Holding

Atradius Participations Holding S.L.

Spain

100%

Holding

Atradius Reinsurance DAC

Ireland100%

Reinsurance

Atradius Rus Credit Insurance LLC

Russia100%

Credit insurance

Atradius Seguros de Crédito, S.A.

Mexico100%

Credit insurance

Atradius Trade Credit Insurance, Inc.

USA

100%

Credit insurance

Atradius Crédito y Caución Seguradora SA

Brazil100%

Credit insurance

The Netherlands

100%

Information services

Graydon Holding N.V.

9

Investments in associated companies
2020

2019

Balance at 1 January

63,11063,428Results of income

3,008

7,126

Impairment of associated companies-(8,219)

Share of income of associated companies

3,008(1,093)

Dividends received

(372)

(631)

Revaluations

259

1,166

Effect of movements in foreign exchange rates(3,189)240

Balance at 31 December

62,816

63,110None of the associated companies are listed. All information from the associated companies, unless otherwise stated,
is based on balance sheet dates between 30 September 2020 and 31 December 2020.
Atradius assessed the goodwill for impairment of investments in associated companies. Based on this assessment
Atradius has decided that no impairment is needed in 2020 for the goodwill related to investments in associatedcompanies.
Atradius Participations Holding S.L. has entered into a share purchase agreement to sell its shares in The LebaneseCredit Insurer s.a.l. The closing of the transaction is expected to take place in 2021. The net carrying amount has
accordingly been reduced to fair value.

58

112

Atradius || Consolidated
Consolidated financial
financial statements
statements 2020
2020Atradius
AtradiusN.V.
N.V.
Atradius

Credit Guarantee Insurance Corporation of Africa Limited
CLAL Credit Insurance Ltd., Tel Aviv
Compañía de Seguros de Crédito Continental S.A., Santiago de
Chile
The Lebanese Credit Insurer s.a.l., Beirut

Country ofincorporation% interest
heldType of business

South Africa

25.00%

Credit insurance

Israel20.00%

Credit insurance

Chile

50.00% 1)

Credit insurance

48.90%

Credit insurance

Lebanon1) Minus one share

The following tables show summarised financial information of Atradius’ interest in associated companies and thefinancial information of the associated companies:

59

113

All amounts
amounts inin thousands
thousands ofof Euro,Euro, unlessunless otherwise
otherwise statedstatedAll

2020

Credit
CLAL Credit
Guarantee Insurance Ltd.
Insurance
Corporation of
Africa Limited

Compañía de The Lebanese
Seguros de Credit Insurer
Créditos.a.l.
Continental
S.A. 1)

Other

Total

Atradius 's interest
-

380

1,611

-

-

1,991

Net assets

15,353

13,83831,634--60,825Carrying amount

15,353

14,21833,245--62,816

(67)

759

2,298

18

-

3,008

Impairments

-

-

-

-

Result sale

-

-

-

-

-

-

Other income/(expense)

-

-

-

-

-

-

Dividends received

-

-

(372)

-

-

(372)

Assets

128,417

95,722

124,7896,614-

355,543

Liabilities

67,004

26,53561,517

6,614-

161,669

Revenue

38,097

13,35013,577

4,299-

69,324

Net assets

61,413

69,18863,273--

193,874

(269)

3,796

4,592

39

-

8,158

-

380

1,611

-

-

1,991

Net assets

17,61913,40630,094

1-

61,119Carrying amount
Share of income of associatedcompanies

17,61913,78631,705

1-

63,110

2,272

701

4,072

80

-

7,126

Impairments(6,927)--(1,292)-(8,219)

(323)

-

(308)

-

-

(631)

Assets144,748

90,632

114,972

6,547-

356,899

Liabilities

74,27423,60154,785

6,544-

159,204

Revenue

54,91014,503

8,433

4,285

-

82,131

Net assets

70,474

67,03160,187

2-

197,695

Result for the year

9,090

3,506

8,143

(2,479)-18,261

Goodwill

Share of income of associatedcompanies-

Associated companies

Result for the year
2019
Atradius 's interest
Goodwill

Dividends received

Associated companies

1)Figures for Compañía de Seguros de Crédito Continental S.A. are related to non-consolidated statements.

60

114

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

10 Financial investments
Financial investments classified
by measurement category andnatureAvailable-for-sale
2020

2019

2020

2019

2020

2019

Equity securities

388,726

370,138--

388,726

370,138

Debt securities

2,167,358

2,066,629--

2,167,358

2,066,629

Loans

-

-

9

8

9

8

Short-term investments--

111,995

131,442

111,995

131,442

Cash held for investments--

10,73820,948

10,73820,9482,556,084

2,436,767

122,742

152,398

2,678,826

2,589,165

Total

Loans and receivables 1)

Total1) There are no bank deposits tacitly renewable in 2020 and 2019.

Movements in available-for-salefinancial investments

Equity securities
2020

2019

2020

2019

2020

2019

Balance at 1 January

370,138

241,720

2,066,629

1,831,308

2,436,767

2,073,028

Additions

131,927

78,333

939,685

903,420

1,071,612

981,753

Disposals(89,791)(12,225)(806,948)(666,373)(896,739)(678,598)--(19,307)(21,448)(19,307)(21,448)(22,239)

61,993

13,52512,089(8,714)74,082(1,309)317(26,226)

7,633(27,535)

7,950

388,726

370,138

2,167,358

2,066,629

2,556,084

2,436,767

Amortisation charge for the year
Revaluations through othercomprehensive income andincome statement
Effect of movements in foreignexchange rates
Balance at 31 December

Debt securities

Total

For disclosures about the temporary exemption from IFRS 9, please refer to Note 4.3.2

11 Receivables
2020

2019

Accounts receivable on insurance and reinsurance business

173,057

192,782

Amounts owed by policyholders and direct insurance operations

133,984

137,038

Receivables arising out of reinsurance

39,07355,744

Other account receivable

71,947

46,783245,004

239,565

Total

The outstanding receivables are substantially all current and consequently their fair values do not materially differ
from their carrying amounts.
There is no concentration of credit risk in respect of receivables as Atradius has a large number of internationallydispersed debtors (see Note 4.3.2).
An amount of EUR 71 million (2019: EUR 69.7 million) relates to past due receivables on insurance and reinsurance
business for which no impairment loss has been recognised, 88.3% (2019: 89.2%) relates to receivables ageing less than
three months.
All receivables are considered for impairment testing. As of 31 December 2020, receivables of EUR 26.3 million (2019:
EUR 28.3 million) were considered to be partially impaired. The amount of the impairment taken related to these61

115

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedreceivables was EUR 12.2 million (2019: EUR 13.2 million). This balance takes into account that a portion of theimpaired receivables will be recovered. Atradius does not hold any collateral over these balances.
The ‘Other accounts receivable’ related to service income, are short term balances which consist of individually smallbalances. The provision for impaired ‘Other accounts receivable’ for 2020 is EUR 1.9 million (2019: EUR 2.7 million)
Movements on the provision for impaired receivables are presented in the following table:

2020

2019

Balance at 1 January

13,21812,743

Impairment of receivables

8,657

7,825

Receivables written off during the year as uncollectable(9,076)(6,402)

Unused amounts reversed

(635)

(948)

Balance at 31 December

12,164

13,218The movement in the provision for impaired receivables on insurance business is included in the premium line.
Amounts charged to the allowance account are generally written off when there is no expectation of recovery.
For disclosures about the temporary exemption from IFRS 9, please refer to Note 4.3.2.1

12 Deferred acquisition costs
2020

2019

Balance at 1 January

76,30071,743

Deferred in the year

22,47527,241

Amortisation change for the year

(25,417)(23,540)

Effect of movements in foreign exchange rates(4,391)

856

Balance at 31 December

68,96876,300Current

39,17144,400Non-current

29,79731,9002020

2019

Pipeline and return premium ceded

356,156

404,028

Prepayments and accrued interest

31,54833,632

Net pension plan asset

53,66753,393

Reimbursement rights

8,414

9,725

Other

25,651

24,363

Total

475,436

525,143

13 Other assets and accruals

Pipeline premium relates to shipments made by Atradius’ policyholders for which Atradius is at risk but has not
invoiced the premium.
Prepayments and accrued interest, relate to payments in advance for which the Company has received and invoice for
future services or goods, and interest of financial investments for which Atradius is entitled but has not received yet.
62

116

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

The other assets and accruals are substantially all current and consequently the fair values of these assets do notmaterially differ from their carrying amounts.
The reimbursement rights relate to the Spanish pension plans. Since the related policies do not qualify as an insurance
policy under IAS 19, the fair value cannot be netted with the related pension liability (see Note 17).
The net pension plan asset concerns the surplus of the pension plan in the UK; as per 31 December 2020 is EUR 53.7
million (2019: EUR 53.4 million) (see Note 17).

14 Cash and cash equivalents
2020

2019

Cash at bank and on hand

422,546

399,308

Short-term bank deposits

2,195

4,936

Cash and cash equivalents

424,741404,244

Cash and cash equivalents

424,741404,244

Cash and cash equivalents in the statement of cash flows

424,741404,244

Atradius manages the cash by using a cross-border cash pooling agreement. This provides for a notional pool structurewith interest compensation per currency. The cash pool arrangement allows for offsetting of cash balances ofbranches within a legal entity. However, it does not allow offsetting between different legal entities.

15 Capital and reserves
15.1

Share capital

The authorised share capital of Atradius N.V. amounts to EUR 250,000,000 and is divided into 250,000,000 ordinary
shares with a nominal value of EUR 1 each (2019: the same) of which 79,122,142 ordinary shares were issued and fully
paid (2019: the same). The fully paid ordinary shares carry one vote per share and carry the right to dividends.
Earnings per share are calculated by dividing the Group share of the net income by the number of ordinary shares inissue during the year. The earnings in 2020 were of EUR 0.6 per share.

15.2

Share premium reserve
2020

2019

Balance at 1 January639,228

639,228

Balance at 31 December

639,228

639,22863

117

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

15.3

Revaluation reserve
2020

2019

Balance at 1 January

81,91925,508Change in revaluation reserve - gross(1,303)76,872

Change in revaluation reserve - tax

3,933(19,432)

Net (gains)/losses transferred to net profit on disposal - gross(4,810)(1,356)

Net (gains)/losses transferred to net profit on disposal - tax

1,072

327

Balance at 31 December

80,811

81,9192020

2019

Balance at 1 January(50,372)(61,518)

Change in currency translation reserve - gross(31,447)

11,723

Change in currency translation reserve - tax

1,830

(577)

(79,989)(50,372)

15.4

Currency translation reserve

Balance at 31 December

Atradius’ significant foreign currencies and sensitivity to fluctuations are set out in Note 4.3.

15.5

Pension reserve
2020

2019

(160,591)(144,397)

Recognised actuarial gains/(losses)(6,016)(16,194)

Change in pension reserve - gross(11,868)(21,023)

Change in pension reserve - tax

5,852

4,829

(166,607)(160,591)

2020

2019

Balance at 1 January

1,191,712

1,080,824

Appropriation of prior year result

227,708

202,638-

33

Balance at 1 January

Balance at 31 December

15.6

Retained earnings

Acquisitions
Dividends(102,859)(91,782)

Balance at 31 December

1,316,561

1,191,712

15.7

Dividend distribution

Atradius’ dividend distribution is based on the Company financial statements. The Company and its subsidiaries are
subject to legal restrictions regarding the amount of dividends they can pay to their shareholders. Dividends can only
be paid up to an amount equal to the excess of the Company’s shareholders' equity and reserves required by law. The
Dutch Civil Code contains the restriction that dividends can only be paid up to an amount equal to the excess of theCompany’s shareholders’ equity and reserves required by law. Additionally, certain subsidiaries are subject torestrictions on the amount of funds they may distribute in the form of dividends or otherwise and also in respect ofminimum capital requirements that are imposed by industry regulators in the countries in which the subsidiaries
operate.
The Company distributes dividends out of the retained earnings balance. If this balance is insufficient, the Company
will distribute dividends out of the share premium reserve (see Note 4.2 in the Company financial statements).

64

118

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

16 Subordinated debt
2020

2019

Balance at 1 January

323,982

323,790

Accretion of interest

196

192

324,177

323,982

Balance at 31 December

On 23 September 2014, Atradius Finance B.V. issued guaranteed subordinated notes with a nominal value of EUR
100,000 each for an aggregate amount of EUR 250 million (the ‘notes’). Atradius Finance B.V. may redeem the notes,
in whole but not in part, on 23 September 2024 and thereafter on each interest payment date. Unless previously
redeemed, the notes will be redeemed at maturity on 23 September 2044. The notes bear interest at a fixed rate of
5.250% per annum payable annually in the first 10 years, which will thereafter be reset to a floating 3 month-EURIBOR
plus a margin of 5.031% per annum payable quarterly for the remaining 20 years. The notes do qualify as regulatory
capital under the Solvency II grandfathering rules. The notes are issued by Atradius Finance B.V. and guaranteed by
the Company. The notes are listed on the Luxembourg Stock Exchange.
On 20 April 2016 the shareholders of Atradius N.V. provided a subordinated loan to Atradius Reinsurance DAC with aprincipal amount of EUR 75 million. The subordinated loan bears interest at a fixed rate of 5.0% per annum, payableannually in arrears on 20 April each year until and including the maturity date: 20 April 2026. Atradius Reinsurance
DAC may redeem the loan on the first call date, 20 April 2021, or thereafter on each interest payment date. The
subordinated loan qualifies as Tier 2 basic own funds item as set out in article 73 of the European Commission's
Solvency II Delegated Regulation (2015/35).
The fair value estimate of the notes issued by Atradius Finance BV is EUR 276 million (2019: EUR 288 million). The fairvalue estimate of the subordinated loan issued by Atradius Reinsurance DAC is EUR 78 million (2019: EUR 82 million).
Both the subordinated notes and the subordinated loan are classified as Level 2 under the fair value hierarchy and as
Tier 2 basic own funds for Solvency II.
The fair value estimates of the subordinated bond and the subordinated loan are provided by an external independentvaluation company, which uses its own proprietary valuation systems to value securities supported by economic andmarket assumptions from financial information providers. The model calculates, accordingly to IFRS methodology,
the present value of the subordinated bond/loan’s cash flows discounted using the Euro government bond yield curve
as a benchmark and applying an appropriate risk spread. The risk spread applied is estimated using the credit spreadsof market quoted subordinated bond issues from similar issuers and with similar rating and maturity profiles.

17 Employee benefit assets and liabilities

Retirement benefits
Other long-term employee benefits
Total

17.1

2020

2019

132,341

118,242

7,379

6,642

139,720

124,884

Retirement benefits

The employee benefit assets and liabilities relate mainly to pension assets and liabilities for defined benefit plans. The
main defined benefit plans are in the United Kingdom, Germany and the Netherlands and these represent 90% (2019:90%) of the defined benefit obligation. The other plans relate to Spain and Portugal, Italy, Switzerland, Sweden,
Belgium, Norway, France and Mexico. The recognition of assets and liabilities is determined separately for each plan.
Within Atradius there are also defined contribution plans. The contributions to these plans are recognised as expenses
in the income statement. The total contributions amounted to EUR 11.8 million in 2020 (2019: EUR 11.6 million).

65

119

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedPension assets and liabilities
The following table presents the change in the value of the net defined benefit liability:
Defined benefit
obligation

Fair value of plan
assetsNet defined benefit(asset) liability

2020

2019

2020

2019

2020

2019

958,282

838,533

840,040

743,886

118,242

94,647

Additions

-

-

-

-

-

-

Included in the income statement:

-

-

-

-

-

-

14,806

12,428--14,806

12,428

279

-

-

-

279

-

Interest cost / income

12,022

17,29412,001

17,05521239

Administration costs

630

580

-

-

630

580

-

-

-

-

-

-

2,319

(1,176)

(367)

882

2,686

(2,058)30,05629,126

11,634

17,937

18,422

11,189- demographic assumptions(8,141)(11,421)--(8,141)(11,421)- financial assumptions

86,569112,844--

86,569112,844- experience adjustments(7,027)770--(7,027)770--

61,013

83,032(61,013)(83,032)--

Balance at 1 January

Current service cost
Past service cost

Cost of Termination Benefits
Effect of movements in foreign exchange rates
Total included in the income statement

Included in OCI:
Remeasurement loss (gain):
Actuarial loss (gain) arising from:Return on plan assets excluding interest income
Change in Irrecoverable Surplus other than Interest
Effect of movements in foreign exchange rates(19,263)

16,056(19,362)

16,17999(123)

Total included in OCI

52,138118,249

41,651

99,211

10,487

19,038Contributions paid by the employer(3,658)(3,817)

11,426

16,128(15,084)(19,945)

Plan participants contributions

2,039

2,023

2,039

2,023

-

-

Benefits paid

(21,178)(24,192)(21,178)(24,192)--

Additional benefits-(1,640)---(1,640)Reclassification of surplus plan assets

-

(274)

(14,953)274

14,953

Other:

Total other

Balance at 31 December(22,797)(27,626)(7,987)(20,994)(14,810)(6,632)

1,017,679

958,282

885,338

840,040

132,341

118,242

66

120

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

Plan assets
Atradius has pension related assets which under IAS 19 do not meet the criteria to qualify as plan assets. In Germany,for one of the plans, assets of EUR 16.9 million (2019: EUR 16.3 million) are classified as financial investments since inthe event of bankruptcy, these assets are not fully secured for the members of the pension plan. In the UK, EUR 38.2
million of financial investments (2019: EUR 35.3 million) is on an escrow account to support the UK pension fund. In
the event of insolvency, the Trustee of the pension fund has the right to those investments, provided certain conditions
are met.
The surplus of the UK pension plans as per 31 December 2020 is EUR 53.7 million (2019: EUR 53.4 million) is disclosed
as net plan pension assets as part of Note 13.
In Spain and Portugal, the defined benefit plans are partially insured with Seguros Catalana Occidente S.A.. These
insurance policies do not qualify as insurance policies under IAS 19, therefore the fair value is treated asreimbursement rights, which are recorded as part of other assets for an amount of EUR 7.7 million (2019: EUR 9.2
million). At the end of 2020, the defined benefit obligation related to the reimbursement rights amounts to EUR 15.8
million (2019: EUR 19.6 million). This same defined benefit obligation has in addition plan assets of EUR 13.8 million(2019: EUR 14.6 million).

67

121

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

Characteristics of the main defined benefit plans
Characteristic
Entitlement

United Kingdom
Pension entitlements are basedon a percentage of final salary(closed to new employees).

Germany
Pension entitlements are basedon a percentage of the averagesalary of the last 10 years.

Number ofparticipants

114 active members (2019: 130
active members).
530 inactive members (2019: 520
inactive members).
EUR 297 million (2019: EUR 287
million).
EUR 351 million (2019: EUR 341
million).

484 active members (2019: 496
active members).
466 inactive members (2019:456 inactive members).
EUR 156 million (2019: EUR 149
million).
EUR 83.8 million (2019: EUR 74
million). Assets of EUR 16.9
million (2019: EUR 16.3 million)
are recognised as part of thefinancial investments.
EUR 7.0 million – loss (2019: EUR
10.5 million - loss).

Defined benefit
obligation
Plan assets

Remeasurement
gain (loss) through
OCI
Fundingarrangement

EUR 3.3 million - gain (2019: EUR
6 million - gain).

Employeecontributions

In 2020 contributions amounted
to 7.1% (2019: 7.1%) of the eligible
salary.
A Cash Driven Investment
portfolio has been implemented
that combines Buy & Maintain
Credit with a Liability Driven
Investment, to provide
contractual income that aligns
with the timing of the pension
liability cash flow payments
together with a 100% interest
rate and inflation rate liability
hedge to maintain Selfsufficiency.
The UK pension plan is subject toUK pensions legislation andguidance issued by the Pensions
Regulator in the UK

ALM-strategy

Regulatory
Framework

The basis of the funding
agreement lies in the Trust Deed
and Rules. The pension fundperforms triennial actuarial
valuations to determine employer
contributions.

A Contractual Trust Agreement isestablished as a financing vehicle
to cover part of the pension
liabilities. There is no specificfunding arrangement although
the assets must exceed theinitially funded amount of EUR
39.2 million.
None; all contributions are madeby the employer.
The investment objectives andpolicies are developed based on
an ALM-study.
The investment policy limits theinterest rate risk by restricting theinvestment in bonds to fixed ratebonds. Equity price risk iscontrolled by investing according
to the Dow Jones Euro Stoxx 50
Index.
The German pension plan issubject to German pensions
legislation and guidance issued by
the Pensions Regulator in
Germany

The Netherlands
Pension entitlements are basedon a percentage of the averagesalary (maximum of EUR 0.1
million - closed to new
employees).
275 active members (2019:289 active members).
1,364 inactive members (2019:
1,361 inactive members).
EUR 452 million (2019: EUR
407 million).
EUR 420 million (2019: EUR
382 million).

EUR 7.4 million - loss (2019:
EUR 8.6 million - loss).
The employer pays a yearlybase premium as a percentageof the total sum of eligible
salaries of all active participants
which cannot be below thecost-effective premium for thatyear.
Employees contribute in 2020
7.5% (2019: 7.5%) of theireligible salary.
At least once every three years
an ALM-study is performed inwhich the impact of thestrategic investment policies
are analysed.
The interest rate risk is partiallyhedged within the investment
portfolio by the use of debt
instruments in combination
with liability driven investment
funds.
The Dutch pension plan issubject to The Netherlands
pensions legislation andguidance issued by thePensions Regulator in The
Netherlands

In general, the defined benefit plans are administered by pension vehicles. Although liaised with the Group, these are
separate legal entities (a Trustee in the United Kingdom, a Pension Trust eV in Germany and a Pension Fund in the
Netherlands). The boards of these entities compromises both employer and employee representatives. The boards are
responsible for setting their own policies (e.g. investment and governance) within the applicable legal framework.
These defined benefit plans may expose the Group to actuarial risks (such as longevity risk) and financial risks likeinterest rate risks and investment risk.

68

122

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

Fair value of plan assets
The fair value of plan assets at the end of the reporting period is analysed in the following table:

Plan assets 2020

EquityCash and cash instrument
equivalentss

Debt
instruments

Investment Insurance
funds
contractsRealestateTotal
2020

Belgium

-

-

-

-

45,332-45,332Germany

1,709

29,48052,597---

83,786

Mexico

-

21

757

-

-

-

778

Norway

-

-

-

-

3,416

-

3,416

Spain

-

-

-

-

13,781-

13,781

Sweden

-

381

1,670

527

-

351

2,929

-

-

-

-

3,359

-

3,359

The Netherlands

6,575

152,544-260,751--

419,870

United Kingdom

8,213

-

278,412

13,038-12,424

312,087

Total

16,497

182,426

333,436

274,316

65,888

12,775885,338

EquityCash and cash instrument
equivalentss

Debt
instruments

Switzerland

Plan assets 2019

Investment Insurance
funds
contractsRealestateTotal 2019

Belgium

-

-

-

-

45,150-45,150Germany

2,130

29,93951,288---83,357

Mexico

-

23

1,081

-

-

-

1,104

Norway

-

-

-

-

3,663

-

3,663

Spain

-

-

-

-

14,573-

14,573Sweden

-

369

1,761

370

-

341

2,841

Switzerland

-

-

-

-

3,141

-

3,141

The Netherlands

2,574

154,413-225,249--

382,236

United Kingdom

10,064-

266,521

13,858-13,532

303,975

Total

14,768

184,744

320,651

239,477

66,527

13,873840,040

All equity and debt securities have quoted prices in active markets. The plan assets do not include any of Atradius’
own financial instruments, nor any property occupied or other assets used by Atradius.
The return on plan assets is determined by multiplying the fair value of the plan assets by the discount rate as
determined at the start of the annual reporting period, taking account of any changes in the plan assets held during theperiod as a result of contributions and benefit payments. The actual return on plan assets (including reimbursement
rights) was EUR 71.7 million – gain (2019: EUR 98.3 million - gain).
Actuarial assumptions
The principal assumptions used for the purpose of the actuarial valuations of the three main defined benefit plans arepresented in the following table:

69
123

All amounts in thousands of Euro, unless otherwise stated

All amounts in thousands of Euro, unless otherwise statedPrincipal actuarial assumptions

United Kingdom

Germany

The Netherlands

2020

2019

2020

2019

2020

2019

Discount rate

1.50%

2.00%

0.75%

1.00%

1.00%

1.00%

Price inflation rate

2.75%

3.00%

1.75%

1.75%

1.75%

1.75%

Expected increase of futuresalaries

2.50%

2.25%

2.30%

2.30%

1.75%

1.75%

2.67%

2.85%

1.50%

1.50%

1.50%

0.88%

CMI 2019

CMI 2018

Heubeck

Heubeck Prognosetafel

Prognosetafel(1.5% LTR) (1.5% LTR)

Richttafeln

Richttafeln

2018 G

2018 G

Expected increase of future benefit
levelsMortality table

Duration in years

20

20

16

17

AG2020

AG2018+ adjusted+ adjusted

experience

experience21

21

An approximation of the sensitivity of the relevant actuarial assumptions, holding other assumptions constant, would
impact the total defined benefit obligation of the main pension plans by the amounts shown below:
Defined benefit obligation

2020

2019

Increase

Decrease

Increase

Decrease(165,634)

222,326(151,496)

202,141

Price inflation rate (1% movement)

94,114(70,009)

128,264(109,091)

Future salary growth (1% movement)

21,137(20,145)

20,232(19,275)

Future pension growth (1% movement)

175,108(138,026)

159,985(126,183)

Future mortality (+1 year)

39,221n/a

34,651n/aDiscount rate (1% movement)

17.2

Defined benefit costs

A total defined benefit cost of EUR 16.1 million (2019: EUR 13.9 million) is recognised in the income statement undernet operating expenses (see Note 27). EUR 15.8 million (2019: EUR 13.3 million) relates to pension plans and EUR 0.3
million (2019: EUR 0.6 million) to other long-term employee benefits.

70
124

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

18 Insurance contracts
Credit insurance

Gross

Reinsurance
asset
2020

Net

Gross

Reinsurance
asset
2019

Net

Claims reported and loss adjustment
expenses

240,241(135,407)

104,834

246,401(121,494)

124,907

Claims incurred but not reported

827,205(427,020)

400,185593,922(225,339)

368,583

1,067,446(562,427)

505,019

840,323(346,833)

493,490309,117(133,138)

175,979

332,904(101,679)

231,225

1,376,563(695,565)

680,998

1,173,227(448,512)

724,715

Claims reported and loss adjustment
expenses

205,149(70,057)

135,092

198,008(68,230)

129,778

Claims incurred but not reported

100,144(14,023)

86,121

96,082(15,554)

80,528Claims provisions

305,293(84,080)

221,213

294,090(83,784)

210,306

Provision for unearned premium

220,870(70,860)

150,010

238,912(79,306)

159,606

Total

526,163(154,940)

371,223

533,002(163,090)

369,912

Total insurance contracts

1,902,726(850,505)

1,052,221

1,706,229(611,602)

1,094,627

Current

1,317,684(588,982)

728,703

1,172,479(420,278)

752,200

Non-current

585,042(261,523)

323,519533,750(191,324)

342,427

Claims provisions
Provision for unearned premium
Total
Bonding

The liabilities for gross claims reported, loss adjustment expenses and claims incurred but not reported are net of
expected recoveries from salvage and subrogation and contain reinsurance business.

18.1

Claims development tables

The claims development tables provide an overview of how Atradius’ recognised claims costs for underwriting years
2011-2020 have changed at successive financial year-ends. This overview also provides a breakdown of the claims
provisions (claims reported and loss adjustment expenses and claims incurred but not reported) that are held against
each underwriting year as at 31 December 2020. Underwriting year here means the year in which the risks were
accepted; for reinsurance business it is the treaty year.

71

125

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

Credit Insurance – Gross
Claims development per underwriting year – (EUR million)
Year when risk was
taken

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Estimate of grossclaims incurred:at the end of the year
when risk was taken

739.7

809.6

682.1

753.0

829.6

755.7

770.4

833.8

858.5

992.3

one year later

694.4

764.0

586.0

734.6

780.7

669.6

735.3

890.7

876.6

-

two years later

670.4

704.9

554.6

734.9

744.5

638.5

679.9

826.7

-

-

three years later

663.5

696.3

543.8

732.4

715.0

627.4

675.0

-

-

-

four years later

649.7

684.3

540.9

724.5

701.7

623.7

-

-

-

-

five years later

642.9

685.4

533.2

713.3

706.4

-

-

-

-

-

Total

six years later

636.7

678.1

522.2

707.6

-

-

-

-

-

-

seven years later

630.5

683.2

524.0

-

-

-

-

-

-

-

eight years later

623.9

693.9

-

-

-

-

-

-

-

-

nine years later
Current estimate of
cumulative claims
Cumulative payments
to date

621.4

-

-

-

-

-

-

-

-

-

621.4

693.9

524.0

707.6

706.4

623.7

675.0

826.7

876.6

992.3

7,247.7

621.2

659.2

528.1

688.2

712.5

653.0

680.5

795.2

678.6

175.3

6,191.6

0.2

34.7

(4.1)

19.4

(6.0)

(29.3)

(5.4)

31.5

198.0

817.0

1,056.0

Claims provision at 31
December 2020 inrespect of 2011 - 2020
In respect of prioryears (before 2011)

11.4

Total

1,067.4

The table contains recognised claims costs only. It excludes the impact of losses from risks that have been accepted forwhich the premium has yet to be earned. The consequence of this is that the claims expense for a particularunderwriting year can increase in future financial years as both the premium and losses are recognised in the income
statement. This is relevant for the credit insurance business written by the local business in Spain and Portugal, thereinsurance business and instalment credit protection. The premium earned for underwriting years 2017-2019 in thecurrent financial year for these blocks of business was EUR 137.3 million.
The claims development tables are presented on a gross basis. The effect of risk mitigation is in line with our quota
share treaties as included in Note 4.2, detailing further disclosures on insurance risk. The overall impact of risk
mitigation on claims provisions (for all underwriting years combined) is approximately 52.7%. Risk mitigation forgross claims incurred as shown in this table varies between 41% and 54% (2019: 37% and 47%). These differ from thequota share treaties due to the private instalment credit protection which are not ceded and the inward reinsurance
business which is covered by Excess of loss treaties.

72

126

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

Bonding - Gross
Claims development per underwriting year – (EUR million)
Year when risk was
taken

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Estimate of grossclaims incurred:at the end of the year
when risk was taken

19.3

19.0

21.7

19.0

21.0

16.8

13.6

10.6

31.7

29.9

one year later

48.8

48.6

32.6

34.6

26.8

22.8

32.0

36.1

38.3

-

two years later

60.8

53.7

39.1

43.6

31.5

32.9

36.6

46.8

-

-

three years later

62.8

58.4

42.0

45.8

38.2

37.4

40.0

-

-

-

four years later

57.4

58.7

41.0

41.6

44.0

36.8

-

-

-

-

five years later

60.7

58.5

40.2

39.3

41.0

-

-

-

-

-

six years later

64.2

58.1

45.7

41.9

-

-

-

-

-

-

seven years later

64.6

56.2

48.6

-

-

-

-

-

-

-

eight years later

65.8

56.5

-

-

-

-

-

-

-

-

nine years later
Current estimate of
cumulative claims
Cumulative payments
to date

68.2

-

-

-

-

-

-

-

-

-

68.2

56.5

48.6

41.9

41.0

36.8

40.0

46.8

38.3

29.9

448.1

54.2

44.8

28.5

22.2

13.1

20.6

11.8

20.3

14.3

0.7

230.6

13.97

11.71

20.11

19.72

27.96

16.16

28.27

26.46

23.96

29.18

217.5

Claims provision at 31
December 2020 inrespect of 2011 - 2020
In respect of prior years(before 2011)

Total

87.8

Total

305.3

The claims costs do not include an estimate for future claim payments on cases where Atradius does not yet haveadverse information. This explains the increase in claims costs over time. For bonding, Atradius typically earns
premium in proportion to the length of time involved, over the tenor of the bond, meaning that while an increase in
the claims incurred can be seen, premium will also be recognised and this cannot be seen in the table above. The
premium earned for underwriting years 2017-2019 in the current financial year was EUR 85.5 million.
The claims development tables are presented on a gross basis. The effect of risk mitigation is in line with our quota
share treaties as included in Note 4.2, detailing further disclosures on insurance risk. The overall impact of risk
mitigation on claims provisions (for all underwriting years combined) is approximately 27.5%. Risk mitigation forgross claims incurred as shown in this table varies between 17% and 28% (2019: 19% and 30%).

18.2

Insurance liabilities and reinsurance assets

18.2.1 Changes in insurance liabilities and reinsurance assets

73
127

All amounts in thousands of Euro, unless otherwise stated

All amounts in thousands of Euro, unless otherwise stated

Credit insurance

Gross

Reinsurance
asset
2020

Net

Gross

Reinsurance
asset
2019

Net

Balance at 1 January

840,324(346,833)

493,491

821,940(349,528)

472,412Claims paid in the year
Increase/(decrease) in liabilities
arising from claims
Foreign exchange rate and othermovements(709,892)

305,001(404,891)(773,560)

357,442(416,118)

980,337(535,652)

444,685779,651(351,921)

427,730(43,323)

15,058(28,265)

12,293(2,826)

9,467

Balance at 31 December

1,067,446(562,427)

505,019

840,324(346,833)

493,490

Claims reported and loss adjustment
expenses

240,241(135,407)

104,834

246,401(121,494)

124,907

Claims incurred but not reported

827,205(427,020)

400,185593,922(225,339)

368,583

1,067,446(562,427)

505,019

840,323(346,833)

493,490

Balance at 1 January

294,090(83,785)

210,305

269,359(76,520)

192,839

Claims paid in the year
Increase/(decrease) in liabilities
arising from claims
Foreign exchange rate and othermovements(44,601)

15,618(28,983)(45,270)

10,657(34,613)66,369(16,886)

49,48372,276(18,174)

54,102(10,565)972(9,592)(2,275)252(2,023)

Balance at 31 December

305,293(84,080)

221,213

294,090(83,785)

210,306

Claims reported and loss adjustment
expenses

205,149(70,057)

135,092

198,008(68,230)

129,778

Claims incurred but not reported

100,144(14,023)

86,121

96,082(15,555)

80,527

Total

305,293(84,080)

221,213

294,090(83,785)

210,305

Claims provisions

1,372,739(646,507)

726,232

1,134,413(430,618)

703,795

Gross

Reinsurance
asset
2020

Net

Gross

Reinsurance
asset
2019

Net

332,904(101,679)

231,226

308,226(96,596)

211,630

Total
Bonding

18.2.2 Provision for unearned premium
Credit insurance

Balance at 1 January
Movement in the period
Foreign exchange rate and othermovements(7,959)(38,251)(46,210)

21,358(4,584)

16,775(15,829)

6,792(9,037)

3,320

(499)

2,821

Balance at 31 December

309,117(133,138)

175,978

332,904(101,679)

231,225

Balance at 1 January

238,912(79,306)

159,606

220,344(75,072)

145,272

Movement in the period
Foreign exchange rate and othermovements(13,442)

6,891(6,551)

17,069(4,156)

12,913(4,599)1,555(3,044)

1,499

(79)

1,421

Balance at 31 December

220,870(70,860)

150,011238,912(79,306)

159,606

Provision for unearned premium

529,987(203,998)

325,989

571,817(180,985)

390,832

Bonding74128

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

19 Other provisions
2020

Restructuring

Onerouscontracts

Litigation

Total

Balance at 1 January

1,485

-

1,135

2,620

Additional provisions

338

-

2,847

3,185

Unused amounts reversed

-

-

(264)

(264)

Utilised

-

-

(45)

(45)

Effect of movements in foreign exchange rates

-

-

-

-

Balance at 31 December

1,823

-

3,673

5,496

Current

1,823

-

2,675

4,498

-

-

998

998

Restructuring

Onerouscontracts

Litigation

Total

Balance at 1 January

580

-

2,099

2,679

Additional provisions

1,000

-

170

1,170

-

-

(683)

(683)

(95)

-

(450)

(545)

-

-

-

-

Balance at 31 December

1,485

-

1,135

2,620

Current

580

-

-

580

-

-

1,135

1,135

Non-current

2019

Unused amounts reversed
Utilised
Effect of movements in foreign exchange rates

Non-current
Litigation

The litigation provision is related to disputes with third parties that are not related to the insurance business ofAtradius. Insurance business related litigation provisions are included in the provisions for outstanding claims. The
provision relates to the estimated cost including the costs of legal proceedings of any non-insurance claims against
Atradius. These provisions have not been discounted to reflect present value since the effect of discounting is notmaterial.

20 Deferred and current income tax
Current income tax
2020

2019

Current income tax assets

35,42040,889Current income tax liabilities

46,71038,747

Net(11,290)

2,142

The current income tax assets consist mainly of advances paid for local income tax. The current income tax liabilities
consist mainly of income and other local taxes payable.

75

129

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedDeferred income tax
2020

2019

Deferred income tax assets before set-off

228,133

167,958

Set-off of deferred tax positions(175,699)(132,343)

Net deferred tax assets as presented in the statement of financial position

52,43435,615

Deferred income tax liabilities before set-off

259,990

235,852

Set-off of deferred tax positions(175,699)(132,343)

84,291

103,509

2020

2019

Balance at 1 January(67,894)(63,884)

Credit (charge) to other comprehensive income for the year

10,859(14,276)

Charge to the income statement for the year

24,15011,188

Effect of movements in foreign exchange rates

1,028

(922)

(31,857)(67,894)

Effect ofmovements
in foreignexchange

Balance at 31
DecemberNet deferred tax liabilities as presented in the statement of financial position
The gross movement on the deferred income tax is presented in the following table:

Balance at 31 December
The movement in the deferred tax assets and liabilities is presented in the following table:
2020

Balance at 1
January

Recognised in
Recognised
other in the income
comprehensive
statement
income for thefor the year
year

Tax losses carried forward

8,836

-

13,437(106)

22,166

Technical balances

44,047-

13,045(332)

56,760Pensions

32,494

5,852(2,957)637

36,026

Fiscal goodwill

3,168

-

(998)

(20)

2,149

Financial investments(22,963)

5,007(2,885)388(20,453)

Equalisation provisions(109,800)-(1,742)521(111,020)

Property, plant and equipment(23,692)-

11,831

40(11,821)

Other

18

-

(5,580)(103)(5,665)

Total(67,894)

10,85924,1501,028(31,857)

76

130

Atradius | Consolidated financial statements 2020 Atradius N.V.

Atradius | Consolidated financial statements 2020 Atradius N.V.

2019

Balance at 1
January

Recognised in
Recognised
other in the income
comprehensive
statement
income for thefor the year
year

Effect ofmovements
in foreignexchange

Balance at 31
DecemberTax losses carried forward

12,662-(3,833)7

8,836Technical balances

33,810-10,122

114

44,047Pensions

21,550

4,829

6,417

(301)

32,494

Fiscal goodwill

4,792

-

(1,618)

(7)

3,168

Financial investments(4,268)(19,105)

485

(76)

(22,963)

Equalisation provisions(105,123)-(4,540)(137)(109,800)

Property, plant and equipment(13,750)-(9,921)(21)(23,692)

Other(13,556)-

14,076

(502)

18

Total

(63,884)(14,276)

11,188(922)(67,894)

Deferred income tax assets are recognised for tax losses carried forward, unused tax credits, and deductible
temporary differences, to the extent that it is probable that taxable profits will be available against which the unused
tax losses carried forward, unused tax credits, and deductible temporary differences can be utilised. In 2020, EUR 1.7
million deferred tax assets on the losses carried forward and deductible temporary difference were written down or
not recognised (2019: EUR 1.2 million). This is offset by the reversals of the impairments, prior year adjustments andforeign exchange, resulting in a net impairment of these deferred tax assets of EUR 138 thousand.
Atradius has unrecognised tax losses carried forward balances amounting to EUR 57.3 million (2019: EUR 56.0
million). The expiration of these unrecognised tax losses carried forward is included in the following table:
Expiration unrecognised tax losses carried forward

2020

2019

1 - 3 years

2,126

4,222

4 - 9 years

3,573

6,219

Indefinite

51,56345,571

Total

57,26156,012The increase of unrecognized tax losses is mainly due to the tax loss of this year in loss making countries with arestriction on the carry forward losses.
The deferred and current income tax charged or credited to other comprehensive income during the year is presented
in the following table:
Deferred tax

Current tax

2020

Deferred tax

Current tax

2019

Revaluation reserve in shareholders equity related to:
Available-for-sale financial investments

5,007

-

(19,105)

-

5,852

-

4,829

-

-

1,829

-

(577)

10,8591,829(14,276)(577)

Pension reserve in shareholders equity related to:
Recognised actuarial gains/(losses)
Currency translation reserve in shareholders equity related to:Currency translation reserve
Total

77
131

All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise stated

21 Payables
2020

2019

Accounts payable on insurance and reinsurance business

310,549

122,186

Payables arising out of reinsurance operations

253,040

68,610

Amounts due to policyholders

40,60335,003

Amounts due to intermediaries and current account Dutch State

16,907

18,574

Trade and other accounts payable

68,04656,496

Accounts payable

29,04322,723

Other accounts payable

39,003

33,773

Total

378,595

178,682

The payables are substantially all current.
The significant increase on payables arising out of reinsurance operations is coming from the schemes signed in somecountries with the Governments (see section 4.2.3).

22 Other liabilities
2020

2019

Ceded pipeline premium¹ and return premium²

216,775

205,231

Deposits received from reinsurers

49,36943,529Unearned reinsurance commission

67,55464,165

Payroll and bonus accruals

44,74851,198

Reinsurance accruals

15,31728,173

Other accruals

81,081

92,690

Other taxes

22,2519,971

Lease liabilities

88,14485,038

Total

585,239

579,994

1) Ceded pipeline premium: Ceded accrued premium which has not been invoiced but for which Atradius is on risk
2) Return Premium — amount due the insured because the actual cost of a policy is less than the insured has previously paid

Other taxes increased due to the denetting of indirect tax advance payments.
Lease liability maturity analysis
Lease liability maturity analysis (undiscounted cash flows)

2020

2019

Less than one year

22,15022,092

Between one and five years

56,69850,943More than five years

21,69320,079Total

100,541

93,11478

132

Atradius | Consolidated financial statements 2020 Atradius N.V.
Atradius | Consolidated financial statements 2020 Atradius N.V.

23 Net premium earned
Credit insurance

Gross

Reinsurers'
share

Net

Gross

Net

2019

2020
Written premium

Reinsurers'
share1,535,094(888,755)

646,339

1,604,428(638,189)

966,239

7,959

38,251

46,210(21,358)

4,584(16,775)

83

46

130

(1,060)

419

(641)

1,543,136(850,457)

692,679

1,582,010(633,186)

948,823

Written premium

170,894(42,023)

128,870

194,766(56,324)

138,441

Change in provision for unearned
premium

13,442(6,891)

6,551(17,069)

4,156(12,913)

(62)

12

(50)

(183)

67

(116)

Total

184,274(48,903)

135,372

177,514(52,102)125,412

Total premium earned

1,727,410(899,360)

828,050

1,759,523(685,288)

1,074,235

Change in provision for unearned
premium
Other movements
Total
Bonding

Other movements

24 Service and other income
2020

2019

Debt collection services

54,791

52,550Credit information services

133,071

136,500

Business information and other service income

64,13663,447

Total

251,998

252,497

Credit information services are part of the insurance segment. All other services are part of the service segment.
Characteristics of service contracts and income:--The contracts of credit information, collections and business information services mostly have a duration of
one year. The contract period of credit information contracts is linked to the insurance policies, which can be
up to two years. But the credit limits are renewed on an annual basis, which requires additional credit
information that is separately invoiced to the customer. The cooperation agreement of Atradius Dutch StateBusiness with the Dutch state has an undetermined period.
The agreed performance obligations and transaction prices, included in the contracts, are clear and contain nojudgements that significantly affect the determination of the amount and timing of revenue.
The contracts contain no financing elements, warranties or obligations for returns or refunds.
In the cases that service income relates to variable consideration, the conditions are explicitly stated in thecontract.
All costs for obtaining and fulfilling contracts are recognised as expenses. Atradius does not incur costs thatmeet the criteria to create assets for obtaining or fulfilling specific contracts
Applying the practical expedient in paragraph 121 of IFRS 15 Atradius does not separately disclose theremaining performance obligations for service contracts at year end, since the contracts either have aduration of one year or Atradius is allowed to recognise revenue in an amount to which it has a right toinvoice.

79133

Atradius | Consolidated financial statements 2020 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

25 Net income from investments
Net investment income by type of investment

2020

2019

12,736

15,5246

918,475

9,435

368

1,640

31,58526,608774

813

32,35927,421

Debt securities available-for-sale

(412)

(132)

Equity securities available-for-sale(14,862)(4,114)

Handling expenses(5,087)(4,307)

Total expenses from financial investments(20,361)(8,553)

(684)

(92)

Total investment expenses(21,045)(8,645)

Net income from investments

11,314

18,776

Share of income/ (losses) of associated companies

3,008(1,093)

Net income from investments including associated companies

14,322

17,6832020

2019

Interest

10,73914,382

Dividends

8,172

9,431

Realised gains

12,925

2,994

IncomeDebt securities available-for-sale
Loans
Equity securities available-for-sale
Other investments
Total income from financial investments
Investment property
Total investment income
Expenses

Investment property

Net investment income by nature of income/(expense)
IncomeRental income from investment property

523

614

32,35927,421

Handling expenses(5,087)(4,307)

Realised losses(8,326)(1,434)

Impairment loss

(7,383)(2,770)Depreciation of investment property

(249)

(134)

Total

(21,045)(8,645)

Net income from investments

11,314

18,776

Share of income of associated companies

3,008

7,126

-

(8,219)

Total
Expenses

Impairments of associated companies
Total

3,008

(1,093)

Net income from investments including associated companies

14,322

17,683

In interest income and expenses reported above, the component related to financial investments available-for-sale is
net EUR 10.3 million (2019: EUR 12.7 million); this is derived from government and corporate bonds.

80

134

All amounts in thousands of Euro, unless otherwise stated

Atradius | Consolidated financial statements 2020 Atradius N.V.

Net gains/(losses) by category

Impairments

Realised
gains/(losses)
2020

Investment property

Impairments

Realised
gains/(losses)
2019

27

(212)

42

206

Financial assets classified as available-for-sale(7,410)4,811(2,812)

1,354

Total

(7,383)

4,599(2,770)1,560

26 Insurance claims
Credit insurance

Gross

Reinsurers'
share
2020

Net

Gross

Reinsurers'
share
2019

Net

Claims paid in the year

709,892(305,001)

404,891

773,560(357,442)

416,118

Change in claims provisions

270,445(230,651)

39,794

6,091

5,521

11,612Claims handling expenses

39,167-

39,167

38,836-

38,836

1,019,504(535,652)

483,852

818,487(351,921)

466,566

Claims paid in the year

44,601(15,618)

28,98345,270(10,657)

34,613

Change in claims provisions

21,768(1,268)20,50027,006(7,517)

19,489Claims handling expenses

1,667

-

1,667

1,548

-

1,548

68,036(16,886)

51,15073,824(18,174)

55,6501,087,540(552,538)

535,002892,311(370,095)

522,216

Total
Bonding

Total
Total insurance claims

For more detail on the change in claims provisions, see Note 18.2.1.

27 Net operating expenses
2020

2019

Total administrative expenses

558,562

565,821

Acquisition costs

223,053

233,480

2,941(3,701)Gross operating expenses

784,556

795,600

Commissions received for business ceded to reinsurers(318,675)(316,497)

Total net operating expenses

465,881479,103

2020

2019

Insurance and information expenses

470,115

482,218

Recoveries and collections expenses

52,21852,432Other service expenses

68,644

63,954

Group costs

8,420

7,601

Total gross administrative expenses

599,397606,205

Claims handling expenses allocated to insurance claims(40,834)(40,384)

Total administrative expenses

558,562

565,821

Change in deferred acquisition costs

Administrative expenses by type of businessIn the gross administrative expenses are included:
81
135

Atradius | Consolidated financial statements 2020 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated- Depreciation, amortisation and impairment charges for intangible assets and property, plant and equipment amountto EUR 69 million (2019: EUR 78.5 million).
- Short term and low value leases amount to EUR 0.6 million
Employee benefit expenses

2020

2019

325,779

333,288

Restructuring costs and termination benefits

338

1,176

Pension costs - defined contribution plans

11,827

11,607Pension costs - defined benefit plans

16,09913,918

Total employee benefit expenses

354,043

359,989

2020

2019

Impairment of goodwill

3,000

10,000Interest and fees on the subordinated debt

17,081

17,077(13)

134

Other interest expense

1,373

1,833

Foreign exchange (income)/expense(5,548)1,291Interest expense on Right of use

2,196

2,552

Total

18,08932,887

Salaries and wages (including social security costs)

For an explanation of the employee benefit details see Note 17.

28 Finance expenses

Net interest on the net defined benefit liability

The subordinated debt costs include the periodic interest expenses of EUR 16.9 million (2019: EUR 16.9 million) andthe accretion of interest on the debt in the amount of EUR 0.2 million (2019: EUR 0.2 million).

29 Income tax
2020

2019

Current tax

57,99096,318Deferred tax(24,150)(11,188)

Income tax expense/(income) for the year

33,83985,130

The reconciliation from the expected tax rate to the actual tax rate is provided in the following table:
2020

2019

Result before tax

78,006

312,838

Tax calculated at domestic tax rates applicable to results in the respective countries

30,28576,541

Tax exempt (income)/loss(5,735)

1,561

Write down/(reversal) of deferred tax assets

90

168

Reassessment of prior year local tax positions

1,530

3,363

Impact of change in tax rate

2,326

(1,650)

Other

5,344

5,148

Income tax expense/(income) for the year

33,83985,13082

136All amounts in thousands of Euro, unless otherwise stated

Atradius | Consolidated financial statements 2020 Atradius N.V.

The weighted average applicable tax rate was 38.8% (2019: 24.5%).
Deferred tax assets relating to losses carried forward in certain entities have been impaired. This is included in ‘write
down (reversal) of deferred tax assets’.
The impact of the change in tax rate in 2020 mainly reflects the effect of changes in income tax rate in the
Netherlands, Switzerland, France, Belgium and the UK.
The category "Other" includes non-deductible expenses, regional taxes such as IRAP in Italy and withholding taxes.

30 Dividends per share
The dividends paid in 2020 and 2019 were EUR 102.9 million (EUR 1.30 per share) and EUR 91.8 million (EUR 1.16 pershare) respectively.

31 Assets not freely disposable
The financial assets not freely disposable in 2020 are EUR 284.6 million (2019: EUR 290.8 million). Assets that are notfreely disposable consist of financial investments, properties and cash that have been held mainly for local regulatory
purposes and can be used to cover technical provisions. The amount of pledged assets not covering technicalprovisions is EUR 85.9 million (2019: EUR 84.4 million).

32 Capital commitments and contingencies
Capital commitments of EUR 11.4 million (2019: EUR 21.1 million) are related to contracted obligations for future
payments for outsourcing, networking, imaging and licences.
The Group has contingent liabilities in respect of matters arising in the ordinary course of business. It is not
anticipated that any material liabilities will arise from the contingent liabilities. The Group has given guarantees tothird parties amounting to EUR 2.0 million (2019: EUR 1.2 million).

33 Personnel
The number of employees working for Atradius is included in the following table:
2020

2019

Total average number of employees (full-time equivalent)

3,517

3,538

Total year end number of employees (full-time equivalent)

3,503

3,530

Total year end number of employees (headcount)

3,653

3,692

83
137

Atradius | Consolidated financial statements 2020 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

34 Related party transactions
The following table provides the total value of transactions which have been entered into with related parties in thefinancial year:
Associatedcompanies

Parent (1)2020

Associatedcompanies

Parent (1)2019

Sales to related parties

16,67317

15,539775

Purchases from related parties

5,770

2,533

2,423

2,808

Amounts owed by related parties

5,740

20,906983

12,502

Amounts owed to related parties

1

2,953

67

2,934

28,184

26,40919,012

19,019Total1) Subsidiaries of Grupo Catalana Occidente, S.A.

Sales to related parties consist of the net effect of Reinsurance business (premiums, claims, recoveries andcommission) and for information services provided to Atradius. Purchases from related parties consist of the net effectof (retro-) ceded insurance (premiums, claims, recoveries and commission). The amounts owed by related Atradiuscompanies consist of the fair value of insurance policies as calculated under the requirements of IAS 19 and advancepayments of the corporate tax.
Terms and conditions of transactions with related parties
No guarantees have been provided or received for any related party for 2020 or 2019. For the years ending 31
December 2020 and 2019, Atradius has not raised any provision or expenses for doubtful debtors relating to amounts
owed by related parties.
Subordinated debt
Plus Ultra, Seguros Generales y Vida, S.A. de Seguros y Reaseguros, Seguros Catalana Occidente S.A. de Seguros y
Reaseguros and Bilbao Compañía Anónima de Seguros y Reaseguros; subsidiaries of the ultimate parent of the Grouppurchased EUR 56.3 million (22.5%) of the guaranteed subordinated notes issued by Atradius Finance B.V. In 2020 theinterest expense relating to this portion was EUR 3.0 million (2019: EUR 3.0 million).
In 2016 the shareholders of Atradius N.V. provided a subordinated loan to Atradius Reinsurance DAC with a principle
amount of EUR 75 million. In 2020 the interest expense relating to this subordinate loan was EUR 3.5 million.
The related party share for the subordinated debt is as follows:
Nominalvalue

Lenders

Interest
expense2020

Nominalvalue

Interest
expense2019

Plus Ultra, Seguros Generales y Vida, S.A. de Seguros y
Reaseguros
Seguros Catalana Occidente S.A. de Seguros y Reaseguros
Bilbao Compañía Anónima de Seguros y Reaseguros
Nortehispana, de Seguros y Reaseguros S.A.

40,00036,291
43,000
6,000

2,116
1,880
2,167
301

40,00036,291
43,000
6,000

2,110
1,871
2,158
299

Total

125,291

6,464

125,291

6,438

All relationships with related parties are at arm’s-length.

84

138

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2020 Atradius N.V.

Compensation of key current and former management personnel of Atradius
The following table provides details on the remuneration for members of the Management Board and Supervisory
Board.
Remuneration

2020

2019

Short-term employee benefits (1)

2,118

2,640

Long-term employee benefits

889

1,259

Post-employment benefits

293

344

3,300

4,243

5

5

Short-term employee benefits (1)

585

566

Total compensation paid to Supervisory Board members

585

566

9

9

Management Board

Total compensation paid to Management Board members
Number of members
Supervisory Board

Number of members
1) Short-term employee benefits include salaries, housing, social security, medical expenses, lease cars and other.

From the total compensation for Management Board members, EUR 2.4 million (2019: EUR 2.9 million) has been paid
at the end of the reporting period. The remaining balance payable is subject to meeting the variable pay conditions.
The Management Board and Supervisory Board members also participate in the Boards of some of the Company´ssubsidiaries. Apart from this they do not have other relationships with the Company or its subsidiaries.
If a member of the Management Board could have a conflict of interest with the Company, he must immediately report
this to the Chairman of the Management Board, who will determine whether the reported case qualifies as a conflict ofinterest. A member of the Management Board will not participate in any deliberations or decision-making of theManagement Board if that member has a direct or indirect personal interest that conflicts with the interest of theCompany or its business. In such a case, the other non-conflicted members of the Management Board will pass theresolution. In 2020 there has not been any conflict of interest.

35 Events after the reporting period
There are no events to report.

85

139

Atradius | Consolidated financial statements 2020 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedCompany financial statements 2020
Contents
Company financial
statements........................................................................................................................................................................
141
Company
financialstatements........................................................................................................................................ 141
Notes tofinancialstatements............................................................................................................................................... 144
Notes
tothe
thecompany
Company
financialstatements
1 General..................................................................................................................................................... 144
General information
information ...................................................................................................................................................................................
144
2
ofsignificant
significant
accounting
policies......................................................................................................... 144
2 Summary
Summary ofaccounting
policies.....................................................................................................................................
145
3
Investments
ingroup
companies.............................................................................................................................
145
3 Investments in group companies .......................................................................................................................................................... 145
4
andreserves
reserves.................................................................................................................................................... 145
4 Capital
Capital and...................................................................................................................................................................................
145
5
Other
liabilities.............................................................................................................................................................
146
5 Other liabilities ............................................................................................................................................................................................ 146
6
Contingencies ................................................................................................................................................................ 146
6 Contingencies ............................................................................................................................................................................................... 146
7 Personnel ........................................................................................................................................................................ 146
7 Personnel ....................................................................................................................................................................................................... 146
8 Auditor fees .................................................................................................................................................................... 146
8 Auditor fees ................................................................................................................................................................................................... 147
9 Remuneration of Management Board and Supervisory Board ...........................................................................147
9 Remuneration of Management Board and Supervisory Board ................................................................................................... 147
10 Proposed profit appropriation .................................................................................................................................. 148
10 Proposed profit appropriation ................................................................................................................................................................ 148
11 Events after the reporting period ............................................................................................................................. 149
11

Events after the reporting period .......................................................................................................................................................... 149

86

140

All
amountsin thousandsof Euro,unless otherwise
statedN.V.
Atradius| Company
financialstatements
2020 AtradiusCompany financial
statements
Company statement of financial position(before profit appropriation)
31.12.2020

31.12.2019

1,892,384

1,994,631

5

5

1,892,379

1,994,626

Current assets

60,516

39,595

Receivables from group companies

34,81525,572Current income tax assets

5,269

1,836

Cash and cash equivalents

20,432

12,187

1,952,900

2,034,226

79,122

79,122

Share premium reserve862,883

862,883

Legal reserve(71,066)(37,250)- Reserve intangibles assets

76,57573,649- Revaluation reserve

80,811

81,919- Pension reserve(166,607)(160,591)- Currency translation reserve(61,845)(32,228)

Retained earnings

998,186

876,263

Result for the year (unappropriated)

44,167

227,708

1,913,294

2,008,726

39,60625,50034,181

21,009

5,425

4,491

39,60625,5001,952,900

2,034,226

AssetsNote

Fixed assets
Property, plant and equipment
3

Investments in group companies

Total
EquityCapital and reserves attributable to the owners of the Company

4

Share capital

Total
Liabilities
Current liabilities
Payables to group companies
5

Other liabilities
Total
Total equity and liabilities

87

141

Atradius | Consolidated financial statements 2020 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedCompany income statement

Income after tax from group companies

2020

2019

47,273229,939

Other results after tax(3,106)(2,231)Result for the year

44,167

227,70888

142

All amounts in thousands of Euro, unless otherwise stated
Atradius
Atradius
Atradius
Atradius
Atradius
Atradius
Atradius| Atradius|Company
Atradius
Atradius|Company
Atradius|Company| Company| Company|CompanyCompany| financial| Company|financial
Company|CompanyfinancialCompany
financialfinancialfinancialfinancialstatements
statements
financialfinancialstatements
financialstatements
financialstatements
statements
statements
statements
2020
statements
2020
statements
2020
statements
2020
Atradius
2020
2020
Atradius
2020
Atradius
Atradius
2020
2020
Atradius
Atradius
2020
N.V.
Atradius
2020
N.V.
Atradius
Atradius
N.V.
Atradius
N.V.
Atradius
N.V.
N.V.
N.V.
N.V.
N.V.
N.V.
N.V.

Company
Company
Company
Company
Company
Company
Company
Company
Company
Company
Company
statement
statement
statement
statement
statement
statement
statement
statement
statement
statement
statement
ofofofchangesofofchangesofchangesofchangesofchangesofchangesofchangesofchangeschangeschangeschangesinin
inequityininequityinequityinequityinequityinequityinequityinequityequityequityequity
Legal
Legal
Legal
Legal
reserves
Legal
Legal
reserves
Legal
reserves
Legal
reserves
Legal
reserves
Legal
reserves
Legal
reserves
reserves
reserves
reserves
reserves

Retained
Retained
Retained
Retained
Retained
Retained
Retained
Retained
Retained
Retained
Retained
ResultResultResultResultResultforResultResultfor
for
ResultResultforResultfor
for
Resultforfor
for
for
for
Total
Total
Total
Total
Total
Total
Total
Total
Total
Total
Total
earnings
earnings
earnings
earnings
earnings
earnings
earnings
earnings
earnings
earnings
earnings
the
the
the
year
the
year
the
the
year
the
year
year
the
year
the
year
the
the
year
year
year
year

Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
Share
premium
premium
premium
premium
premium
premium
premium
premium
premium
premium
premium
Reserve
Reserve
Reserve
Reserve
Reserve
Reserve
Reserve
Reserve
Reserve
Reserve
Reserve
Currency
Currency
Currency
Currency
Currency
Currency
Currency
Currency
Currency
Currency
Currency
capitalcapitalcapitalcapitalcapitalcapitalcapitalcapitalcapitalcapitalcapital
Revaluation
Revaluation
Revaluation
Revaluation
Revaluation
Revaluation
Revaluation
Revaluation
Revaluation
Revaluation
Revaluation
PensionPensionPensionPensionPensionPensionPensionPensionPensionPensionPensionreserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserveintangibles
intangibles
intangibles
intangibles
intangibles
intangibles
intangibles
intangibles
intangibles
intangibles
intangibles
translationtranslationtranslationtranslationtranslationtranslationtranslationtranslationtranslationtranslationtranslation
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserveassetsassetsassetsassetsassetsassetsassetsassetsassetsassetsassetsreserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve

Balance
Balance
Balance
Balance
Balance
BalanceatBalanceatBalance
1Balance
at
Balance
1atBalance
1atat
1at
11at
1atat
11at
11
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122862,883
79,122862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
62,27762,27762,27762,27762,27762,27762,27762,27762,27762,27762,27725,50825,50825,50825,50825,50825,50825,50825,50825,50825,50825,508(144,396)(144,396)(144,396)(144,396)(144,396)(144,396)(144,396)(144,396)(144,396)(144,396)(144,396)(43,374)(43,374)(43,374)(43,374)(43,374)(43,374)(43,374)(43,374)(43,374)(43,374)(43,374)
776,747
776,747
776,747
776,747
776,747
776,747
776,747
776,747
776,747
776,747
776,747
202,638
202,638
202,638
202,638
202,638
202,638
202,638
202,638
202,638
202,638
202,638
1,821,405
1,821,405
1,821,405
1,821,405
1,821,405
1,821,405
1,821,405
1,821,405
1,821,405
1,821,405
1,821,405
January
January
January
January
January
January
January
2019
2019
January
January
2019
January
2019
January
2019
2019
2019
2019
2019
2019
2019
ChangeChangeChangeChangeChangeChangeinChangeinChangeinChangeChangeinin
Changeinin inininin
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
reserve,
reserve,
reserve,
reserve,
reserve,
reserve,
reserve,pensionpensionreserve,
reserve,pensionreserve,pensionreserve,pensionpensionpensionpensionpensionpensionpension- - - - - - - -- - -- - - - - - - -- - reserve
reserve
reserve
reserve
reserve
reserveandreserveandreserveandreserve
reserveandandreserve
and
and
and
and
and
and
currency
currency
currency
currency
currency
currency
currency
currency
currency
currency
currencytranslationtranslationtranslationtranslationtranslationtranslationtranslationtranslationtranslation
reservetranslation
reservetranslation
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve

56,411
56,411
56,411
56,411
56,411
56,411
56,411
56,411(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)- -51,362
51,362- 51,362
51,36251,36251,36251,36251,36251,36251,362- - - - - - - -- 56,411- 56,411- 56,411
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146- - - - - - - -- - - - - - - - - - -51,362

Net
Net
Net
incomeNet
incomeNet
Net
incomeNet
incomeincomeNet
incomeNet
Net
incomeNet
incomeincomeincomeincome- - - - - - - -- - -- - - - - - - -- - recognised
recognised
recognised
recognised
recognised
recognised
recognised
recognised
recognised
directly
recognised
directly
recognised
directly
directly
directly
directly
directly
directly
directly
directly
directlyininequityinequityinequityinin
equityequityinequityinequityinin
equityequityinequityequity- - - - - - - --56,411- 56,411- 56,411
56,411
56,411
56,411
56,411
56,411
56,411
56,411
56,411(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)(16,195)
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146
11,146- - - - - - - -- - - - - - - - - - -51,362- 51,362- 51,362- 51,362
51,36251,36251,36251,36251,36251,36251,362Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions - - - - - - - -- - -- - - - - - - -- - -- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- -33-333333
33
333333333333 - - - - - - - -- - - 33333333
33333333333333

Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
ofofofofofofofofofofof- - - - - - - -- - -- - - - - - - -- - prior
prior
prior
prior
year
prior
prior
year
prior
year
result
year
prior
prior
year
resultyear
prior
resultyear
prior
resultyear
resultyear
resultyear
resultyear
resultresultresultresult- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - -202,638-202,638
202,638--202,638-202,638-202,638
202,638
202,638
202,638
202,638
202,638(202,638)(202,638)(202,638)(202,638)(202,638)(202,638)(202,638)(202,638)(202,638)(202,638)(202,638) - - - - - - - -- - --year- - - - - - -- - -- - - - - - - -- - Result
ResultResultResultResultforResultResultforfortheResultResultfortheResultfortheforResult
year
the
for
year
the
for
the
year
for
the
year
for
year
the
for
year
the
year
the
the
year
year
year

- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- - -ChangeChangeChangeChangeChangeChangeinChangeinreserve
ChangeinChangereserve
ChangeinreserveinChangeinreserve
reserveinreserveinreserveinin
reserve
reserveinreserve
reserve- - - - - - - -- - -- - - - - - - -- 11,372- 11,372- 11,372
11,372
11,372
11,372
11,372
11,372
11,372
11,372
11,372
intangible
intangible
intangible
intangible
intangible
intangible
intangible
intangible
assetsintangible
assetsintangible
assetsintangible
assetsassetsassetsassetsassetsassetsassetsassets227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708- - - - - - - -- - - - - - - - - - -- - - - - - - - - -(11,372)-(11,372)-(11,372)- (11,372)-(11,372)(11,372)(11,372)(11,372)(11,372)(11,372)(11,372)- - - - - - - -- - - - - - - - - - -- - -- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- - - - - - - - - (91,782)- (91,782)--(91,782)-(91,782)-(91,782)(91,782)(91,782)(91,782)(91,782)(91,782)(91,782)- - - - - - - (91,782)--(91,782)-(91,782)-(91,782)(91,782)(91,782)(91,782)(91,782)(91,782)(91,782)(91,782)
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Balance
Balance
Balance
Balance
Balance
BalanceatBalanceatBalance
31
BalanceatBalance31
atBalance
31
atat
31
at
31
31
at
31
atat
31
31
at
3131
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122862,883
79,122862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
73,64973,64973,64973,64973,64973,64973,64973,64973,64973,64973,64981,91981,91981,91981,91981,91981,91981,91981,91981,91981,919(160,591)
81,919(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)
876,263876,263876,263876,263876,263876,263876,263876,263876,263876,263876,263
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
December
December
December
December
December
December
December
December
2019
December
December
2019
2019
December
2019
2019
2019
2019
2019
2019
2019
2019

Balance
Balance
Balance
Balance
Balance
BalanceatBalanceatBalance
1Balance
at
Balance
1atBalance
1atat
1at
11at
1atat
11at
11
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122862,883
79,122862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
73,64973,64973,64973,64973,64973,64973,64973,64973,64973,64973,64981,91981,91981,91981,91981,91981,91981,91981,91981,91981,919(160,591)
81,919(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(160,591)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)(32,228)
876,263876,263876,263876,263876,263876,263876,263876,263876,263876,263876,263
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
227,708
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
2,008,726
January
January
January
January
January
January
January
2020
2020
January
January
2020
January
2020
January
2020
2020
2020
2020
2020
2020
2020
ChangeChangeChangeChangeChangeChangeinChangeinChangeinChangeChangeinin
Changeinin inininin
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
revaluation
reserve,revaluation
reserve,revaluation
reserve,
reserve,
reserve,
reserve,
reserve,
reserve,
reserve,
reserve,
reserve,-(1,108)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)- - - - - - - -- - - - - - - - - - (36,740)
pensionpensionpensionpensionpensionpensionreservepensionreservepensionpensionreservepensionreservepensionreserve
reserveandreserveandreserveandreserve
reserveandandreserve
and
and
and
and
-and
-and
- - - - - -- - -- - - - - - - -- - - - - - - - - - -- -(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)--(36,740)-(36,740)-(36,740)(36,740)(36,740)(36,740)(36,740)(36,740)(36,740)(36,740)
currency
currency
currency
currency
currency
currency
currencytranslation
currencytranslation
currency
currencytranslation
currencytranslationtranslationtranslationtranslationtranslationtranslationtranslationtranslation
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
reserve
Net
Net
Net
incomeNet
incomeNet
Net
incomeNet
incomeincomeNet
incomeNet
Net
incomeNet
incomeincomeincomeincome- - - - - - - -- - -- - - - - - - -- - recognised
recognised
recognised
recognised
recognised
recognised
recognised
recognised
recognised
directly
recognised
directly
recognised
directly
directly
directly
directly
directly
directly
directly
directly
directlyininequityinequityinequityinin
equityequityinequityinequityinin
equityequityinequityequity- - - - - - - -- -(1,108)-(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(1,108)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(6,016)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)(29,617)- - - - - - - -- - - - - - - - - - (36,740)-(36,740)- -(36,740)-(36,740)(36,740)(36,740)(36,740)(36,740)(36,740)(36,740)(36,740)

Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions
Acquisitions - - - - - - - -- - -- - - - - - - -- - -- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- - -Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
Appropriation
ofofofofofofofofofofof- - - - - - - -- - -- - - - - - - -- - prior
prior
prior
prior
year
prior
prior
year
prior
year
result
year
prior
prior
year
resultyear
prior
resultyear
prior
resultyear
resultyear
resultyear
resultyear
resultresultresultresult- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - -227,708-227,708-227,708- -227,708
227,708-227,708
227,708
227,708
227,708
227,708
227,708(227,708)(227,708)(227,708)(227,708)(227,708)(227,708)(227,708)(227,708)(227,708)(227,708)(227,708) - - - - - - - -- - --year- - - - - - -- - -- - - - - - - -- - Result
ResultResultResultResultforResultResultforfortheResultResultfortheResultfortheforResult
year
the
for
year
the
for
the
year
for
the
year
for
year
the
for
year
the
year
the
the
year
year
year

- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- - -- - - - - - -44,167-44,167- -44,167-44,167
44,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,16744,167

ChangeChangeChangeChangeChangeChangeinChangeinreserve
ChangeinChangereserve
ChangeinreserveinChangeinreserve
reserveinreserveinreserveinin
reserve
reserveinreserve
reserve- - - - - - - -- - -- - - - - - - -- -2,926-2,926
2,926
2,926
2,926
2,926
2,926
2,926
2,926
2,926
2,926
intangible
intangible
intangible
intangible
intangible
intangible
intangible
intangible
assetsintangible
assetsintangible
assetsintangible
assetsassetsassetsassetsassetsassetsassetsassets- - - - - - - -- - - - - - - - - - -- - - - - - - - - -(2,926)-(2,926)- -(2,926)-(2,926)(2,926)(2,926)(2,926)(2,926)(2,926)(2,926)(2,926)- - - - - - - -- - - - - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - -- - - - - - - -- - -- - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- - - - - - - - - - -- - - - - - - -(102,859)- (102,859)- (102,859)--(102,859)-(102,859)(102,859)- (102,859)(102,859)(102,859)(102,859)(102,859)- - - - - - (102,859)- (102,859)--(102,859)- (102,859)-(102,859)(102,859)(102,859)(102,859)(102,859)(102,859)(102,859)
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Dividends
Balance
Balance
Balance
Balance
Balance
BalanceatBalanceatBalance
31
BalanceatBalance31
atBalance
31
atat
31
at
31
31
at
31
atat
31
31
at
3131
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122
79,122862,883
79,122862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
862,883
76,57576,57576,57576,57576,57576,57576,57576,57576,57576,57576,57580,81180,81180,81180,81180,81180,81180,81180,81180,81180,811(166,607)
80,811(166,607)(166,607)(166,607)(166,607)(166,607)(166,607)(166,607)(166,607)(166,607)(166,607)(61,845)(61,845)(61,845)(61,845)(61,845)(61,845)(61,845)(61,845)(61,845)(61,845)(61,845)998,186
998,186
998,186
998,186
998,186
998,186
998,186
998,186
998,186
998,186
998,186
44,16744,16744,16744,16744,16744,16744,16744,16744,16744,167
1,913,294
44,167
1,913,294
1,913,294
1,913,294
1,913,294
1,913,294
1,913,294
1,913,294
1,913,294
1,913,294
1,913,294
December
December
December
December
December
December
December
December
2020
December
December
2020
2020
December
2020
2020
2020
2020
2020
2020
2020
2020

8989
8989
89
89
8989
89
8989

143

Atradius| Consolidated
financialstatements
2020 Atradius
All amounts
in thousandsof Euro,unless otherwise
stated N.V.

Notes to the Company
financial statements
1

General information

Atradius N.V. (referred to as the “Company’) is based in Amsterdam (The Netherlands) and registered at the Dutch
Chamber of Commerce under number 34196963.
The Company financial statements are part of the 2020 consolidated financial statements, which are also included in
the annual report. The Company income statement is presented in abbreviated form in accordance with Article 402 ofBook 2 of the Dutch Civil Code.
The Company has applied the provisions of Article 379, Subsection 5 of Book 2 of the Dutch Civil Code. The list referred
to in this article has been included in the appendix and is filed at the offices of the Commercial Register in Amsterdam.
The Company has issued a statement of liability in accordance with Article 403, Book 2 of the Dutch Civil Code for thefollowing Atradius companies: Atradius Collections B.V., Atradius Collections Holding B.V., Atradius Credit
Management Services B.V, Atradius Dutch State Business N.V and Atradius Information Services B.V.
The Company financial statements have been authorised for issue by the Management Board on 3 March 2021.

2

Summary of significant accounting policies

2.1

Basis of presentation

The Company annual financial statements have been prepared in accordance with Part 9, Book 2 of the Dutch Civil
Code. In the preparation of the Company annual financial statements, the provisions of Article 362, Subsection 8 ofBook 2 of the Dutch Civil Code have been applied.
Group companies are accounted for using the equity method. Equity of group and associated companies is based on
IFRS accounting principles of Atradius N.V.
The Company has the power to govern the group companies . The equity method involves recognition of the groupcompany’s profit or loss in the income statement for the Company’s share in the result. The Company’s interest in thegroup companies is carried in the balance sheet at an amount that reflects its share in the net asset value of the related
subsidiary.
All amounts in the notes are shown in thousands of Euro (EUR), rounded to the nearest thousand, unless otherwise
stated.

2.2

Investments in group companies

Atradius companies are valued using the equity method in accordance with the accounting principles applied in the
consolidated financial statements.

2.3

Legal reserve

The legal reserve has to be created under Dutch legislation for the reserves established by subsidiaries that cannot be
distributed and relates to:- Reserve intangible assets;- Revaluation reserve;- Pension reserve;- Currency translation reserve90

144

All amounts in thousands of Euro, unless otherwise stated

Atradius | Company financial statements 2020 Atradius N.V.

3

Investments in group companies

The following table shows the changes in investments in group companies valued using the equity method:

Balance at 1 January

2020

2019

1,994,626

1,817,073

Investments in group companies

33

Share of profit/(loss)

47,273229,939

Dividends received(112,859)(103,782)(7,123)40,217(29,538)

11,146

1,892,379

1,994,626

Change in revaluation reserve and pension reserve
Foreign exchange reserve movements
Balance at 31 December

4

Capital and reserves

4.1

Share capital

The authorised share capital of Atradius N.V. amounts to EUR 250,000,000 and is divided into 250,000,000 ordinary
shares with a nominal value of EUR 1 each (equal to 2019) of which 79,122,142 ordinary shares were issued and fully
paid (equal to 2019). The fully paid ordinary shares carry one vote per share and carry the right to dividends.

4.2

Share premium reserve

Balance at 1 January

2020

2019

862,883

862,883

Transfer between legal reserve and share premium reserve--

Dividends--

862,883

862,883

Balance at 31 December

4.3

Legal reserve

The total amount of equity in the Company financial statements equals shareholders’ equity in the consolidated
financial statements. Certain components within equity are different in the Company financial statements due to legal
reserves, established by subsidiaries of Atradius N.V., which in accordance with Book 2, Part 9 of the Dutch Civil Code,
Article 389, Subsection 6, cannot be distributed. In particular:-

costs for research and development to the extent they are capitalisedchanges in revaluation of group companies, which consists of unrealised revaluations withinconsolidated group companies presented in the revaluation reserve in the consolidated financial
statements, and actuarial gains and losses
effect of asset ceilings within consolidated group companies presented in the pension reserve in the
consolidated financial statements andforeign currency translations on consolidated group companies, presented in the currency translation
reserve in the consolidated financial statements

In addition to the legal and regulatory restrictions on distributing dividends from subsidiaries to Atradius N.V., there
are various other considerations and limitations that are taken into account in determining the appropriate levels ofequity in the Group’s subsidiaries. These considerations and limitations include, but are not restricted to, local
regulatory regulations and rating agency requirements, that can change over time. It is not possible to disclose areliable quantification of these limitations. Reference is made to paragraph 4.5 Capital Management in the
consolidated annual report.

91
145

Atradius | Consolidated financial statements 2020 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

4.4

Retained earnings
2020

2019

Balance at 1 January876,263776,747

Appropriation of prior year result

227,708

202,638(2,926)(11,372)(102,859)(91,782)

Transfer between legal reserve and retained earnings
Dividends
Acquisition minorities

33

Balance at 31 December

998,186

876,263

2020

2019

157

-

Long-term employee benefits

1,450

1,890

Other liabilities

3,818

2,596

Total

5,425

4,486

5

Other liabilities

Other taxes

6

Contingencies

The Company has contingent liabilities in respect of guarantees arising in the ordinary course of business. It was not
anticipated that any material liabilities will arise from the contingent liabilities. The Company gave guarantees tothird parties in the ordinary course of business amounting to EUR 0.6 million (2019: EUR 0.6 million).
Atradius N.V. is head of the Dutch fiscal unity for corporate income tax, consisting of Atradius N.V., Atradius Insurance
Holding N.V., Atradius Finance B.V., Atradius Crédito y Caución S.A. de Seguros y Reaseguros, Dutch branch, Atradius
Information Services B.V., Atradius Collections Holding B.V., Atradius Collections B.V., Atradius Credit Management
Services B.V., Atradius Dutch State Business N.V., and Graydon Holding N.V. (including its Dutch subsidiaries). Allcompanies included in the fiscal unity are jointly and severally liable for the corporate income tax payable in the
Netherlands by the fiscal unity.
The Company is subject to litigation in the normal course of business. The Company believes that such litigation will
not have a material effect on its profit or loss and financial condition.
The Company acts as the guarantor for the guaranteed subordinated loan, EUR 250 million, (2019: EUR 250 million)
issued by Atradius Finance B.V. (see Note 16 of the consolidated financial statements).

7

Personnel

The number of employees working for the Company:
2020

2019

Total average number of employees (headcount)

5

6

Total year end number of employees (headcount)

5

6

92

146

Atradius | Company financial statements 2020 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

8 Auditor fees
The following expenses were made for audit and non-audit services rendered by Atradius’ external auditor:
2020 Including VAT

PwC
Accountants
N.V.

Other PwC
Networkorganisations

Total PwC
Network

Audit financial statements

330

2,027

2,357

Other audit services

15

481

496

Fiscal advisory services

-

-

-

Non-audit services

-

7

206

345

2,515

3,059

PwC
Accountants
N.V.

Other PwC
Networkorganisations

Total PwC
Network

570

2,015

2,585

Other audit services

-

477

477

Fiscal advisory services

-

-

-

Non-audit services

-

13

13

570

2,504

3,075

Total
2019 Including VAT

Audit financial statements

Total

These amounts relate to the actual expenses incurred for the audit of the related financial year, and other services, onan accrual basis (expenses and non-recoverable VAT costs are included).

9 Remuneration of Management Board and Supervisory Board
For information on remuneration of the members of the Management Board and the Supervisory Board: see Note 34 of
the consolidated financial statements.

93

147

Atradius | Consolidated financial statements 2020 Atradius N.V.

All amounts in thousands of Euro, unless otherwise stated

10 Proposed profit appropriation
Proposed appropriation of result
The Management Board proposes to the General Meeting to allocate the result for the year to the retained earnings.

94
148

All amounts in thousands of Euro, unless otherwise stated
Atradius | Company financial statements 2020 Atradius N.V.

11 Events after the reporting period
There are no events to report.

95

149

Atradius | Consolidated financial statements 2020 Atradius N.V.

Other information

150

All amounts in thousands of Euro, unless otherwise stated

Statutory appropriation of result
In accordance with article 24 of the Articles of Association the result for the year is at the disposal of theGeneral Meeting.

151Atradius | Consolidated financial statements 2020 Atradius N.V.

Annual Report Atradius N.V.
3 March 2021
The Supervisory Board					The Management Board

Ignacio Álvarez, Chairman					David Capdevila, Chairman
Francisco Arregui, Vice-Chairman
Andreas Tesch
Xavier Freixes
Christian van Lint
Désirée van Gorp
Claus Gramlich-Eicher
Carlos Halpern						Marc Henstridge
John Hourican
Bernd Hinrich Meyer
Hugo Serra
José María Sunyer

152

All amounts in thousands of Euro, unless otherwise stated

Atradius | Annual Report 2020 Atradius N.V.

Independent auditor’s report
To: the general meeting and the supervisory board of Atradius N.V.

Report on the financial statements 2020
Our opinion
In our opinion:• the consolidated financial statements of Atradius N.V. together with its subsidiaries(‘the Group’) give a true and fair view of the financial position of the Group as at
31 December 2020 and of its result and cash flows for the year then ended in accordance with International
Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the
Dutch Civil Code;• the company financial statements of Atradius N.V. (‘the Company’) give a true and fair view ofthe financial position of the Company as at 31 December 2020 and of its result for the year then ended inaccordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited
We have audited the accompanying financial statements 2020 of Atradius N.V., Amsterdam.
The financial statements include the consolidated financial statements of the Group and the company financial
statements.
The consolidated financial statements comprise:•the consolidated statement of financial position as at 31 December 2020;•
the following statements for 2020: the consolidated income statement, the consolidated statements ofcomprehensive income, changes in equity and cash flows; and•the notes, comprising significant accounting policies and other explanatory information.
The company financial statements comprise:•the company balance sheet as at 31 December 2020;•
the company profit and loss account for the year then ended;•
the notes, comprising the accounting policies applied and other explanatory information.
The financial reporting framework applied in the preparation of the financial statements is EU-IFRS and the relevant
provisions of Part 9 of Book 2 of the Dutch Civil Code for the consolidated financial statements and Part 9 of Book 2 of
the Dutch Civil Code for the company financial statements.

The basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing.
We have further described our responsibilities under those standards in the section‘Our responsibilities for the audit of the financial statements’ of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
We are independent of Atradius N.V. in accordance with the ‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms
supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assuranceopdrachten’ (ViO, Codeof Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence
regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels
accountants’ (VGBA, Dutch Code of Ethics).

153
99

Atradius | Consolidated financial statements 2020 Atradius N.V.

Atradius | Annual Report 2020 Atradius N.V.

Report on the other information included in the annual report
In addition to the financial statements and our auditor’s report thereon, the annual report contains other informationthat consists of:•the consolidated management report;•
the other information pursuant to Part 9 of Book 2 of the Dutch Civil Code;glossary and overview of subsidiaries, branches, associated companies and minority shareholdings.
Based on the procedures performed as set out below, we conclude that the other information:•is consistent with the financial statements and does not contain material misstatements;•
contains the information that is required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained in our audit of the financial
statements or otherwise, we have considered whether the other information contains material misstatements.
By performing our procedures, we comply with the requirements of Part 9 of Book 2 of the
Dutch Civil Code and the Dutch Standard 720. The scope of such procedures was substantially less than the scope of
those performed in our audit of the financial statements.
The management board is responsible for the preparation of the other information, including the consolidated
management report and the other information in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Responsibilities for the financial statements and the audit
Responsibilities of the management board and the supervisory board for the financial
statements
The management board is responsible for:• the preparation and fair presentation of the financial statements in accordance with EU-IFRS and with Part 9 ofBook 2 of the Dutch Civil Code; and for• such internal control as the management board determines is necessary to enable the preparation of the financial
statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, the management board is responsible for assessing theCompany’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, themanagement board should prepare the financial statements using the going concern basis of accounting unless the
management board either intends to liquidate the Company or to cease operations, or has no realistic alternative but todo so. The management board should disclose events and circumstances that may cast significant doubt on the
Company’s ability to continue as a going concern in the financial statements.
The supervisory board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements
Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain sufficient andappropriate audit evidence to provide a basis for our opinion. Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and toissue an auditor’s report that includes our opinion. Reasonable assurance is a high but not absolute level of assurance,
which makes it possible that we may not detect all material misstatements. Misstatements may arise due to fraud or
error. They are considered to be material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of the financial statements.
Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified
misstatements on our opinion.
A more detailed description of our responsibilities is set out in the appendix to our report. Rotterdam, 3 March 2021
PricewaterhouseCoopers Accountants N.V.
Original has been signed by M.D. Jansen RA

154
100

All amounts in thousands of Euro, unless otherwise statedAppendix to our auditor’s report on the financial statements
Appendix
to our auditor’sreport on the financial statements
2020 of Atradius
N.V.
2020 of Atradius N.V.
Atradius | Annual Report 2020 Atradius N.V.

In addition to what is included in our auditor’s report, we have further set out in this appendix our
responsibilities for the audit of the financial statements and explained what an audit involves.

The auditor’s responsibilities for the audit of the financial statements
We have exercised professional judgement and have maintained professional scepticism throughout the audit inaccordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit
consisted, among other things of the following:•
Identifying and assessing the risks of material misstatement of the financial statements,
whether due to fraud or error, designing and performing audit procedures responsive to those risks, andobtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the intentional override ofinternal control.
•
Obtaining an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control.
•
Evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management board.
•
Concluding on the appropriateness of the management board’s use of the going concern basis of accounting,and based on the audit evidence obtained, concluding whether a material uncertainty exists related to events
and/or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report and are made in
the context of our opinion on the financial statements as a whole. However, future events or conditions may
cause the Company to cease to continue as a going concern.
•
Evaluating the overall presentation, structure and content of the financial statements, including
the disclosures, and evaluating whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.
Considering our ultimate responsibility for the opinion on the consolidated financial statements,
we are responsible for the direction, supervision and performance of the group audit. In this context, we havedetermined the nature and extent of the audit procedures for components of the Group to ensure that we performed
enough work to be able to give an opinion on the financial statements as a whole. Determining factors are thegeographic structure of the Group, the significance and/or risk profile of group entities or activities, the accounting
processes and controls, and the industry in which the Group operates. On this basis, we selected group entities forwhich an audit or review of financial information or specific balances was considered necessary.
We communicate with the supervisory board regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.

155
101

Atradius  |  Glossary Atradius N.V.

Glossary
Atradius Atrium
Credit management portal giving customers and brokers access to all the information they need to manage theirpolicies and apply for credit limits in one place, in real time.

Bonding (product)
The activity of providing guarantees that protect the beneficiary if the supplier fails to meet the agreed performancelevel. Bonding is also known as surety.

Buyer
A customer of our insured customer (i.e. the holder of the credit insurance policy). Buyers carry a credit risk such as
protracted default, insolvency and bankruptcy. This could lead to a financial loss for our customer and/or policyholder.
Buyer underwriting is related to the assessment of this credit risk.

Buyer underwriting
The activity related to the risk acceptance of credit risk of buyers. Buyer underwriting determines the credit limits thatare attached to the credit insurance policy and determines the amount for which shipments are insured. Buyers areassessed on financial and non-financial criteria, including financial status, profitability, liquidity, size, region, trade
sector and payment experience.

Claim
An application by an insured customer for indemnification of a loss under the policy.

Claims ratio
A performance indicator that is defined as total claims including claims handling expenses divided by total insurance
revenue.

Combined ratio
The combined ratio is a performance indicator calculated using the general insurance standard; the sum of the claims
and the expenses divided by total insurance revenue.

Credit Insurance (product)
Commercial and/or political risk insurance whereby the customer is protected against non-payment of tradereceivables due to insolvency or default.

Credit limit
The maximum exposure specifically approved or otherwise authorised by the insurer in respect of a buyer.

Debt collection
Activity to collect monies owed by a company. Atradius offers this service to both insured customers and third parties.

156

Atradius  |  Glossary Atradius N.V.

Economic capital
The amount of risk capital, assessed on a realistic basis, required by a company to cover its risks assumed underinsurance contracts.

Eurozone
Refers to the European Union member states that have adopted the Euro as their currency.

Expense ratio
A performance indicator that is defined as total insurance expenses divided by total insurance revenue.

Exposure
Total amount underwritten by the insurer as cover on a buyer, a country, under a policy or under all policies.

Financial year
A period used for calculating annual financial statements but which does not require that the period reported on
constitutes a calendar year.

GlobalAtradius’ product and service offering to multinational customers, which provides tailored credit management
solutions for customers worldwide in several languages and currencies.

Atradius Insights
An advanced online business intelligence tool to support our customers with a detailed analysis of their debtor
portfolio and help them in managing their buyer portfolios and credit risks.

Insolvency
Legally recognised inability of a debtor to meet its commitments and pay its debts.

Instalment credit protection
Atradius’ offering to financial and corporate policyholders in Belgium and Luxembourg, that protects against
short and medium-term risks involved in multiple instalment agreements with private individuals and businesses(business-to-consumer).

Insurance revenue
The total of gross earned premium and information income (i.e. credit checking fees).

Medium-term businessBusiness (capital goods and major projects) transacted on credit terms of between two and five years.

Policyholder
Our insured customer; the party that purchases an insurance policy for protection against the risk of non-payment by(foreign or domestic) buyers and assumes responsibilities and obligations under that policy.

Policy underwriting
The activity related to establishing the terms and conditions of the insurance policy designed to mitigate
unacceptable risks. These terms and conditions include premium rate, maximum credit periods, the insurer’s
maximum liability, the customer’s own retention and other risk sharing and mitigation aspects.

Political risk
The risk that a government or a country prevents the fulfilment of a transaction, or fails to meet its payment
obligations, or the risk that is beyond the scope of an individual buyer or falls outside the individual buyer’s
responsibility.

157

Atradius  |  Glossary Atradius N.V.

Premium
Amount paid by an insured customer to the insurer in return for risk coverage.

Reinsurance
A risk-sharing operation, whereby the insurer obtains cover from a third party (the reinsurer) for part of the credit
risks that it has guaranteed, in exchange for the payment of a premium.

Reinsurance business
The activity whereby Atradius acts as a reinsurance company for credit insurance and bonding business of primary
insurers. This activity is performed by a dedicated team of underwriters at Atradius Reinsurance DAC.

SME
Small and medium-sized enterprises.

Solvency II
An EU Directive that codifies the EU insurance regulation. The Solvency II Directive aims to create a harmonised, riskorientated solvency regime resulting in capital requirements for (re) insurance companies that are more reflective of
the risks they run. Its objectives are to deepen the integration of the EU insurance market, to improve the protectionof policyholders and beneficiaries, to improve the international competitiveness of EU insurers and to instil better
regulation of the EU insurance markets.

Underwriter
Person charged with risk acceptance, control of that risk and the setting of cover conditions on buyer/credit limits,
including any country-specific terms of cover.

Underwriting year
The year in which a risk is accepted for a shipment from a customer/policyholder to its buyer. The underwriting
year performance provides management with important insight into the buyer (risk) underwriting performance. In
addition, it gives information about the most recent underwriting year performance without any impact from previous
underwriting years.

UN Global Compact
A United Nations strategic policy initiative for Businesses that are committed to aligning their operations andstrategies with ten universally accepted principles in the areas of human rights, labour, environment andanti-corruption.

158

Atradius  |  Annual Report 2020 Atradius N.V.

Overview of subsidiaries,
associated companies andminority shareholdings
The following table sets forth, as at 31 December 2020*, the name and jurisdiction of establishment of the subsidiaries,
branches, associated companies and minority shareholdings of Atradius N.V. All companies are, directly or indirectly,
wholly owned unless otherwise indicated. The companies are listed in alphabetical order.
Name
Accento Services S.A.
African Trade Insurance Agency
Atradius Collections B.V.
Belgium branch
Czech Republic branch
Denmark branchFrance branch
Germany branch
Hungary branch
Ireland branch
Italy branch
Poland branch
Turkey branch
Atradius Collections DMCC
Atradius Collections Holding B.V.
Atradius Collections Limited
Atradius Collections Limited
Atradius Collections Limited
Atradius Collections Pte. Limited
Atradius Collections Pty. Limited
Atradius Collections Serviços de Cobranças de Dívidas Ltda
Atradius Collections, S.A. de C.V.
Atradius Collections S.L.
Atradius Collections, Inc.
Atradius Corporate Management Consulting (Shanghai) Co., Ltd.
Atradius Credit Insurance Agency, Inc.
Atradius Credit Management Services B.V.
Atradius Credit Management Services (RUS) LLC
Atradius Crédito y Caución S.A. de Seguros y Reaseguros
Australia branch
Austria branch
Belgium branch
Bulgaria branch
Canada branch
Czech Republic branch
Denmark branch
Finland branchFrance branch
Germany branch
Greece branch
Hong Kong branch
Hungary branch
Ireland branch
Italy branchJapan branch
Luxembourg branch
Netherlands branch
New Zealand branch
Norway branch
Poland branch
Portugal branch
Romania branch
Singapore branch
Slovakia branch
Sweden branch
Switzerland branch
Turkey branch
United Kingdom branch

Country
Ownership
BelgiumKenya
1 shareNetherlands
Belgium
Czech Republic
Denmark
FranceGermany
Hungary
Ireland
Italy
PolandTurkeyUAE
Netherlands
CanadaHong Kong
United Kingdom
Singapore
Australia
BrazilMexico
Spain
USA
China
USA
Netherlands
RussiaSpain
Australia
Austria
Belgium
Bulgaria
CanadaCzech Republic
Denmark
FinlandFranceGermany
GreeceHong Kong
Hungary
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
NorwayPolandPortugal
Romania
Singapore
Slovakia
SwedenSwitzerland
TurkeyUnited Kingdom

Name
Atradius Crédito y Caución Seguradora S.A.
Atradius Dutch State Business N.V.
Atradius Enterprise Management Consulting (Shanghai) Co., Ltd.
Atradius Finance B.V.
Atradius Information Services B.V.
Belgium branch
Denmark branchFrance branch
Germany branch
Ireland branch
Italy branchJapan branch
Norway branch
Spain branch
Sweden branch
Switzerland branch
Taiwan branch
Thailand branch
United Kingdom branch
Atradius Information Services Vietnam Company Limited
Atradius India Credit Management Services Private Ltd.
Atradius Insurance Holding N.V.
Atradius Investments Limited
Atradius Italia Intermediazioni S.R.L.
Atradius Participations Holding S.L.U.
Atradius Pension Trustees Ltd.
Atradius Reinsurance DAC
Atradius Reinsurance DAC Escritório de Representação no Brasil Ltda.
Atradius Rus Credit Insurance LLC
Atradius Seguros de Crédito, S.A.
Atradius Trade Credit Insurance, Inc.
Atradius Trade Insurance Brokerage Yuhan Hoesa
CLAL Credit Insurance Ltd.
Compagnie Tunisienne pour l'Assurance du Commerce Exterieur S.A.
Compania de Seguros de Crédito Continental S.A.
Credit Guarantee Insurance Corporation of Africa Ltd
Crédito y Caución do Brasil Gestao de Riscos de Crédito e Serviços LTDA
Gestifatura S.A.
Giant-net B.V.
Graydon Holding N.V.
Graydon Nederland B.V
Graydon Belgium N.V.
Graydon UK Ltd.
Hotel Maatschappij de Wittenburg B.V.
Iberinform Internacional S.A.U.
Portugal branch
Iberinmobiliaria, S.A.U.
Iberinform Portugal S.A.
Informes Mexico, S.A. de C.V.
B2B SAFE S.A.
Nederlandse Financieringsmaatschappij voor Ontwikkelingslanden N.V.
OpenCompanies B.V.
PT Atradius Information Services Indonesia
Starzyński i Wspólnicy Kancelaria Prawna spółka komandytowa
The Lebanese Credit Insurer s.a.l.
Verenigde Assurantiebedrijven Nederland N.V.

Country
Ownership
BrazilNetherlands
China
Netherlands
Netherlands
Belgium
Denmark
FranceGermany
Ireland
Italy
Japan
NorwaySpain
SwedenSwitzerland
TaiwanThailand
United Kingdom
Vietnam
India
Netherlands
Ireland
Italy
Spain
United Kingdom
Ireland
BrazilRussiaMexicoUSA
South Korea
Israel20%
Tunisia
3.92%
Chile
50%**
South Africa
25%
BrazilPortugal
Netherlands
Netherlands
Netherlands
Belgium
United Kingdom
Netherlands
2.7%
Spain
PortugalSpain
PortugalMexicoSpain
Netherlands
0.5%
Netherlands
Indonesia
Poland99.99%
Lebanon
48.9%
Netherlands
0.65%* DAP Holding N.V., Netherlands (2.37% share), was dissolved on 31 December 2020** Minus one share

159

Atradius  |  Annual Report 2020 Atradius N.V.

Disclaimer
The information in the chapter ‘The global economic environment’ is for general guidance on matters of interest only.
While we have made every attempt to ensure that the information contained in this report reflects careful analysis
and investigations on our side before publication of this Annual Report, we are neither responsible for any errors oromissions nor for the results obtained from the use of this information.
The information in this Annual Report does not contain nor imply a warranty as to the completeness, accuracy,
timeliness or otherwise. Atradius, its related companies, or the directors, agents or employees thereof will in no event
be liable to you or anyone regarding any decision made or action taken in reliance on the information in this Annual
Report or for any consequential, special or similar damages.

Produced and publishedThis Annual Report is published by Atradius N.V.
Your contact
Christine Gerryn – Director Group Communication & Commercial Development
Phone: +31 20 553 2047
Email: christine.gerryn@atradius.com

160