2019

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

Contents
Directors report .  .  .  .  .  .  .  .  .  .  .  .
This is Atradius.................................................................................................................... 3
Our 2019 performance at a glance................................................................................ 6
Ten years in figures............................................................................................................ 8
A message from the Management Board.................................................................... 9This is AtradiusBusiness profile.........................................................................................................
Products and services...................................................................................................... 12
Global footprint...................................................................................................................15
Atradius Group organisation..........................................................................................17
Corporate governance ..............................................................................................
Report of the Supervisory Board................................................................................ 18
Shareholder structure...................................................................................................... 21
Corporate governance.....................................................................................................24

The global economic
environment

Consolidated management report .................................................................... 00
The global economic environment ........................................................................... 29
Business performance ................................................................................................... 33
Human resources ............................................................................................................ 42
Risk and capital management..................................................................................... 45
Corporate responsibility ............................................................................................... 47

Shaping tomorrow
together

Financial statements ............................................ 51
Consolidated financial statements 2019 ................................................................. 51
Company financial statements 2019 ..................................................................... 135

Other information .................................................. 143
Independent auditor’s report......................................................................................145
 Glossary .............................................................................................................................149
	Overview of subsidiaries, branches, associatedcompanies and minority shareholdings.................................................................152

Corporate social
responsibility
Click on the arrow2

to go straight to that section of the reportThis is Atradius
At Atradius, we want to focus our efforts on the things thatmatter to our customers and partners.

3

Atradius | This is AtradiusThis is Atradius
The world around us is changing. Tradeis undergoing a digital transformationand for Atradius to remain at theforefront of managing risk andenabling trade – we are continuing ourtransformation.
Atradius’ core principles are timeless. We believe in providing leading
credit insurance and credit management products that are tailored to theindividual needs of our customers. At the heart of our offering is the humantouch – developing customer relationships built on a deep understanding of
our customer’s business so that we work in partnership towards our mutual
growth and prosperity.
At the same time, we also see the need to transform the business so that
our offerings and interactions meet the expectations of our customers andbusiness partners in this hyper-connected and digital world.
Shaping Tomorrow Together has been an important call-to-action foreveryone in Atradius in 2019 and has shaped the way we interact with eachother, our customers and partners. It perfectly represents our ambition
and gives you insight into the Atradius culture. We see the need to ‘ShapeTomorrow’ because this is not happening in the future – it is happening now.
Our customers and partners are doing business in new and more digital
ways – which means we also need to provide innovative and efficient ways
to bring our value proposition to the market. More importantly, we want to do
this ‘together’. Together with our customers, business partners and with all
Atradius employees. At Atradius, we want to focus our efforts on the things
that matter to our customers and partners. This means taking the time tolisten to their views and investing in the things that will make a difference.
None of this would be possible without each and every Atradius employee
joining us on our transformation journey, sharing in our vision and being
open and adaptable to change.

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
Strong profit and growth across the Group•	Total revenue surpassed the EUR 2 billion milestone.
•	The result for the year grew to EUR 227.7 million, a 12.4% increase from 2018.
•	Insurance premium revenue increased 6.7% (6.1% at constant foreign exchange
rates) with favourable portfolio development in most countries.
•	Atradius achieved a claims ratio of 42.8%, maintaining balanced risk acceptance
while continuing to provide comprehensive coverage to our customers.
•	The expense ratio for the year was 35.9%, following substantial investment ininnovation and technological development.
•	The gross combined ratio was 78.7% (1)•	A positive EUR 25.9 million contribution to the result for the year from ourprudent investment portfolio despite constrained interest rates.
•	Our shareholder’s equity and subordinated debt position was further
strengthened by 8.7%.

Management Board
David Capdevila, Chairman (starting 1st of January 2020)
Isidoro Unda, Chairman (until 31st of December 2019)
Andreas Tesch
Christian van Lint
Claus Gramlich-Eicher
Marc Henstridge

Supervisory Board		
Ignacio Álvarez, Chairman
Francisco Arregui, Vice-Chairman
Bernd Meyer
Dick Sluimers (until 17th of April 2019)
Xavier Freixes
Hugo Serra
Désirée van Gorp
John Hourican
Carlos Halpern
José María Sunyer

Supervisory Board Committees
Audit Committee
Remuneration, Selection and Appointment Committee(1) he combined ratio is calculated using the insurance industry standard; the total sum of claimsTand expenses divided by insurance revenue.

6

Total Revenue

In EUR million

2019

2,012

2018

1,898

2017

1,837

2016

1,761

2015

1,718

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

Net Investment Result (1)In EUR million

2019

26

2018

22

2017

25

2016

23

2015

36
0

5

10

15

20

25

30

35

40

Gross Claims Ratio
2019

42.8%

2018

43.7%

2017

41.7%

2016

41.6%

2015

43.5%
20%

25%

30%

35%

40%

45%

50%

Expense Ratio
2019

35.9%

2018

35.5%

2017

35.7%

2016

36.4%

2015

37.1%
35%

36%

37%

38%

Result For The YearIn EUR million

2019

228

2018

203

2017

186

2016

212

2015

178
0

50

100

150

200

250

EquityIn EUR million

2019

2,009

2018

1,821

2017

1,753

2016

1,626

2015

1,500
0

500

1,000

1,500

2,000

(1)
Net Investment Result consists of net income from investments and share of associated companies (excluding
realised gains & losses, and impairments on associated companies).

7

2,500

Atradius | This is Atradius

Ten years in figures
Financial information(in EUR million)

2019

2018

2017

2016 (1)

2015

2014

2013

2012

2011

2010

Insurance premium revenue

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

1,345.6

Service and other income

252.5

249.5

249.1

203.1

180.8

169.0

166.4

161.8

150.5

155.1

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

1,500.7

25.9

22.1

24.7

22.8

36.0

37.8

35.1

30.3

31.1

22.7

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

1,523.4

227.7

202.7

186.2

211.8

178.2

161.2

134.5

113.6

129.8

124.9

Equity2,008.7

1,821.4

1,753.2

1,625.5

1,500.2

1,393.0

1,286.9

1,196.3

1,129.8

1,035.2

Total assets

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

3,285.2

Insurance contracts

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

1,311.8

Return on equity (3)

11.9%

11.3%

11.0%

13.6%

12.3%

12.0%

10.8%

9.8%

12.0%

12.9%

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)

91.8

83.9

76.7

71.2

64.9

53.8

43.5

43.5

25.3

--

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

Shareholders information

Technical ratios
Gross claims ratio (4)

42.8%

43.7%

41.7%

41.6%

43.5%

40.7%

45.6%

51.2%

49.7%

38.6%

Gross expense ratio

35.9%

35.5%

35.7%

36.4%

37.1%

36.6%

35.9%

35.0%

35.2%

35.4%

Gross combined ratio

78.7%

79.2%

77.4%

78.0%

80.6%

77.3%

81.5%

86.2%

84.9%

74.0%

Net claims ratio

43.3%

44.7%

41.4%

42.0%

42.0%

42.6%

46.4%

49.1%

50.3%

44.6%

Net expense ratio

30.0%

32.0%

34.2%

35.4%

35.9%

35.8%

37.4%

37.5%

34.2%

39.3%

Net combined ratio

73.4%

76.7%

75.5%

77.4%

77.9%

78.3%

83.8%

86.7%

84.5%

83.9%

3,531

3,545

3,596

3,586

3,161

3,139

3,107

3,143

3,149

3,171

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

A.M. BestA (excellent), outlook stable(6)

Including Graydon, Iberinform Portugal, Gestifatura and Informes Mexico since Q3 2016.

(1)	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.

(4) 019 Gross Claims Expenses and the Gross Claims Ratio shown in the management report exclude a single large claim of EUR 83.9 million which was
2
100% reinsured and had zero impact on the net insurance result(5)

In 2019 Moody’s reaffirmed the Insurance Financial Strength rating of the Atradius rated entities as ‘A2’ outlook stable.

(6)In 2019 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+”.

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.

Dear stakeholder,
Atradius continues to go from strength to strength with 2019 being anotheryear where everyone in the Atradius family has worked hard – together - toachieve results that we can be proud of. During these turbulent times, against
a backdrop of political uncertainty, trade wars and social unrest – Atradius
has proven that we can be trusted to manage risk and enable trade for ourcustomers.
Atradius’ financial results are a testament to the discipline, expertise andteamwork of our people. Our insurance premium revenue has grown 6.7%
compared to last year to a level of EUR 1,759.5 million – enabling us to breakthe EUR 2 billion total revenue milestone. Claims have remained stable with aratio of 42.8% and an expense ratio of 35.9% following substantial investment
in innovation and technological development. Once again, we are proud
to report that our customer retention is at an impressive 93.4% and we areexperiencing high demand for our products and services with excellent new
business levels. The overall result for the year is an impressive 12.4% higher
than 2018 – at EUR 227.7 million, and our capital base has grown to EUR
2,008.7 million making 2019 another very successful year.

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

The Atradius culture is pivotal to the success of our business and that is
why we pay particular attention to this. As a service business, living theright culture is a vital foundation for the quality of service we deliver to ourcustomers.
Shaping Tomorrow Together has been an important message in 2019.
This is a call-to-action for all employees to get involved in Atradius’ digitaltransformation. We are a global company spread across many locations andtime zones. We are investing in multiple transformation and innovation
projects as well as partnerships and we want everyone to be a part of thejourney, to understand the trends that are shaping the future of our businessand to learn about what is going on in the organisation. The focus has beenon supporting employees to shape their own personal development paths, toadapt to new systems and to learn about new technologies.
The transformation programmes for Atradius’ core systems continue to be amajor focus and we are pleased to be making good progress in these multiyear undertakings. This year we celebrated the first successes of developing
our new Credit Insurance systems by releasing the first functionalities. At
the heart of these transformation programmes is the ambition to enhance
our value proposition, streamline our processes and deliver the best digital
experience for our employees, clients and prospects. Innovation projects havecontinued in 2019 as an important aspect of Atradius’ digital transformation– particularly in the areas of Big Data and AI, connectivity, platforms,
ecosystems and blockchain.
Connectivity also continues to be a strategic focus area and is at the sametime a key enabler for many other innovation areas. In 2019 we started theroll out of Atradius’ new Application Programming Interfaces (APIs) offering
to existing customers. The service has been well received and provides amodern and quick way to securely connect to Atradius’ core services.
Atradius maintains strong ratings from both AM Best (A, excellent) andMoody’s (A2), both with a stable outlook. These ratings are a reflection of
Atradius being a financially strong, geographically well diversified company
with a solid growth and risk profile. The financial strength rating has neverbeen better, supported by our strong capitalisation, solid revenue growth andconsistent and strong profitability.  
The economic outlook for 2020 is one of moderating global growth. Trade
policy tensions will remain and this will create a significant drag on global
activity and trade along with the as yet unquantified impact of COVID-19.
Asia will continue to be the engine of global growth, although the slowdownof China will impact the region. Advanced markets are expected to see their
growth rate decline as trade measures weigh on economic activity. Eurozone
growth will remain subdued as economic growth in Germany remains low
and Brexit uncertainty continues to cloud the picture. Economic activity is
forecast to increase slightly in emerging markets with Brazil and Mexico
showing a recovery. US growth is projected to moderate as fiscal policy shifts
from expansionary in 2019 to more neutral in 2020. Business failures are
expected to increase in 2020 against the backdrop of weaker economic data.

10

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

We remain resolute in our ambition towards excellence within the industry
while continuing to pursue growth in new markets. We look forward to
the completion of the first wave of developments for our enhanced credit
insurance systems expected in 2020, along with new advancements in our
Bonding systems expected to commence rolling out in 2020 starting with
Italy. Our prudent investment portfolio will remain, with no material changes
planned. Atradius’ disciplined underwriting, excellent solvency position andreinsurance programme will remain in place, helping us mitigate potentiallyadverse eventualities.
Looking back on the past years the number of employees working at
Atradius has remained very stable, as we constantly managed to improve
our productivity. Looking forward, no substantive changes in workforce areplanned or expected.
Combined with our values, commitment to customers, human capital andinvestment in technological systems, we feel prepared to make 2020 anotheryear of solid performance and growth in both revenue and result.
We would like to extend our thanks to our customers, business partners,
brokers, agents, reinsurers and staff for helping us to achieve our excellent
results and being part of our journey to Shape Tomorrow Together.

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

11

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
political risks).
Our Credit Insurance products are based on a concept called ‘Modula’. This isa worldwide 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.
Atradius has 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 the market leader and pioneer with 20 years of experience inthis segment, Atradius Global has developed an excellent understanding of theneeds of multinationals. The structure of the cover is uniquely designed to meetthe requirements of the customer, whether they have centralized or local credit
management. This is supported by dedicated Global Account teams and Key
Account Underwriters situated around the world to provide extensive crossborder customer service and consistent high quality decision making on thebuyer portfolio of our Global customers.
For medium-size and large single market companies we offer policies tailoredto their 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 toadminister.
The added value of purchasing credit insurance from Atradius comes fromthe day to day credit management and risk assessment support that Atradiusprovide alongside a 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 navigate their policies and provide 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 and language skills to provide the best possible risk assessments on
your behalf.

12

Atradius  |  Business profile Atradius N.V.

Atradius’ on-line tool Atrium allows customers to perform administration
tasks for their policy such as applying for a credit limit or submitting a claim.
Atrium also includes additional credit management support services such as‘Insights’ which allows you to analyse the risk in your portfolio.
In addition to the more traditional credit insurance, which covers a customer’s‘whole turnover’, we also offer a range of structured credit risk solutions for
specific large and complex transactions. These solutions address a range ofcircumstances, 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.

Reinsurance: specialised solutions for credit
and bonding
Atradius Reinsurance DAC (Atradius Re) is the leading monoline credit andbonding reinsurer in the market, offering reinsurance solutions for credit
insurance and bonding business of primary insurers around the globe.
Through our team of underwriters in Dublin, Ireland, Atradius Re supports
126 clients in 61 countries. The strength of Atradius Re is the combination ofaccess to the Atradius underwriting skills in our key business lines of credit
and bonding, and highly specialised reinsurance skills that support the needsof small and mid-sized 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. We help ourcustomers do more than just manage risks and protect against worst-casescenarios. We provide tailor-made solutions that fit their needs and strategy.
Our long-standing bonding expertise and in-depth market knowledge has
allowed us to grow steadily in recent years. This allows us to work closely withmajor organisations, making us a leading bond supplier in Europe.

Instalment Credit Protection: risk protection for
instalment-based credit agreements
Atradius Instalment Credit Protection (ICP) covers short-term and mediumterm risks 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 to offer residential real estate insurance products forco-ownerships and for rental guarantees, as well as products for privatecar leasing arrangements. We offer the latest new product ‘B2C Protect’ tocustomers in the construction sector, to protect against payment default byhomeowners.

13

Atradius  |  Business profile Atradius N.V.

Debt Collection: Professional and reliable collections
backed by a global network
With worldwide expertise, and staff in 33 countries, Atradius Collections
helps businesses - both insured and uninsured - collect domestic andinternational trade debts, while maintaining sound business relationships
with their clients. We have built a strong reputation as a business-to-businessspecialist, based on the strength of the Atradius brand. We also have a fully
integrated international network of collectors, lawyers and insolvency
practitioners, as well as 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 ofservices for the financial industry, including back-up servicing, cross-bordercollection and invoice verification, allowing factoring companies and assetbased lenders to investigate whether the business transactions or invoicesfrom clients are acknowledged by the buyer.

Dutch State Business: the export credit agency of theNetherlands
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 investor. ADSB works on behalf of the Dutch state, making sure exporttransactions can be completed successfully.

Credit Information Services: business intelligence tosupport credit management decisions
Atradius offers information services through the following companies:
Iberinform in Spain and Portugal, Graydon in the Netherlands, Belgium andUK and Informes in Mexico. These companies support our customers withbusiness intelligence solutions that help them to manage risk and grow theirbusinesses by making smart decisions in their credit management, risk andcompliance management and marketing. They also support Atradius byproviding information to underwrite buyer risks for our core credit
insurance business.

14

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,
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

Luxembourg

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
IsraelTel Aviv (1)LebanonBeirut (1)Saudi Arabia

Riyadh (1)United ArabEmirates

Dubai (1)

Asia
China

Beijing, Guanzhou,
Nanjing, Shanghai (2)AmericasHong Kong

Hong Kong

India
Indonesia

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

Japan

Tokyo

Malaysia

Kuala Lumpur (1)AfricaArgentina

Buenos Aires (1)BrazilSão Paulo

CanadaMississauga (Toronto), Pointe Claire (Montreal)

Chile

Santiago de Chile (1)Philippines

Manila (1)MexicoMexico City, Guadalajara, Monterrey

Singapore

Singapore

Peru

Lima (1)South Korea

Seoul (2)USA altimore (Maryland), Indianapolis (Indiana),
B
Chicago (Illinois), Los Angeles (California), Morristown(New Jersey), New York (New York), Dallas (Texas)

TaiwanTaipei (1)Oceania

Thailand

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

DSB

Vietnam

Hanoi

New Zealand

AucklandReinsurance

15

(1)

Kenya

Nairobi (1)MoroccoCasa Blanca (2)South Africa

Johannesburg (1)Tunisia

Tunis (1)Credit Insurance
Collections
Information
Bonding
Instalment Credit16

 Associated company, minority
interest or co-operationagreement with local partner(1)

 Service establishment andco-operation agreement withlocal partner(2)

Atradius  |  Business profile Atradius N.V.

General Atradiusgroup organisation
General overview of the main holding andoperating companies as at 31 December 2019

Atradius Collections
Holding B.V.
The Netherlands
Office locations:
Australia
Italy
Belgium
MexicoNetherlands
BrazilCanadaPolandSpain
ChinaCzech Republic Singapore
Denmark
TurkeyUnited Kingdom
Dubai
FranceUnited ArabEmirates
Germany
USA
Hong Kong
Hungary
IrelandAtradius 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

Atradius Reinsurance DAC
IrelandBranches:
Australia
Japan
Austria
Luxembourg
Netherlands
Belgium
Bulgaria
New Zealand
NorwayCanadaCzech Republic Poland
Denmark
Portugal
Romania
FinlandFranceSingapore
Slovakia
Germany
SwedenGreeceHong Kong
Switzerland
Hungary
TurkeyUnited Kingdom
Ireland
Italy

Operating company:
BrazilAtradius Trade Credit
Insurance Inc. USA
Atradius Credit Insurance
Agency Inc. USA

Operating companies& branches:

Atradius Rus Credit
Insurance LLC Russia

Belgium
China
Denmark
FranceGermany
India
Indonesia
IrelandItaly
Japan
MexicoAtradius Information
Services B.V.
The Netherlands
Atradius Dutch StateBusiness N.V.
The Netherlands
Graydon Holding N.V.
The Netherlands
Operating companies:
Belgium
Netherlands

Atradius Seguros
de Crédito S.A. Mexico

United Kingdom

17

NorwayRussiaSouth Korea
Spain
SwedenSwitzerland
TaiwanThailand
United Kingdom
Vietnam

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

Atradius | Corporate Governance Atradius N.V.

Report of theSupervisory Board
2019 was a good year for Atradius.
We have made progress in our threestrategic pillars: growth, profitability
and solvency; we have consolidated
our strategy and continue to contributeto the commercial development ofour customers.
The environment in which we have carried out our activity has not been easy.
The world’s economies are suffering from a synchronized slowdown andbarriers to world trade are proliferating, causing a noticeable slowdown intheir growth. Despite this, Atradius has achieved its objectives regarding thethree strategic pillars of Grupo Catalana Occidente. The financial results forthe year amounted to an annual turnover of EUR 2,012 million, a businessgrowth of 6.0 %; a profit of EUR 227.7 million increased by 12.4% and solvency
strengthened by increasing the equity by 10.3% to overEUR 2 billion.
We remain focused on the development of our distribution networks, risk
management & prudent underwriting and customer approach.
In 2019, Atradius continued to develop its innovation projects as partof Atradius’ digital transformation, particularly in the areas of Big Data
and Artificial Intelligence, connectivity, platforms and Blockchain. The
Shaping Tomorrow Together programme has been an important call toaction for everyone within Atradius in 2019 and has shaped the interaction
within the organisation, our customers and partners. The programmes fortransforming Atradius’ core systems continue to be one of the important
areas to focus on. Moreover, Atradius continues to pay attention to innovationand entrepreneurship programmes, through initiatives like the Digital
Ambassador Programme and Innovation ‘tribes’ (for trends like Big Data,
Platforms and Blockchain).
Furthermore, Atradius enhanced its global footprint by establishing a new
Atradius Collections company in Dubai (United Arab Emirates).

18

Atradius | Corporate Governance Atradius N.V.

With regards to corporate governance, the Supervisory Board ensuresthat Atradius runs its business and manages risk for stakeholders in atransparent, ethical way. In 2019, the full Supervisory Board convened 5times. 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 2019, the Audit Committee convened
4 times and the Remuneration, Selection and Appointment Committee
convened 4 times.
Key topics discussed during the 2019 Supervisory Board meetings were
Atradius’ results, Atradius’ strategy, the main business risks and Atradius’risk management framework. In addition, digitalisation, the impact of new
regulations, as well as IT projects and the selection and recommendation toappoint the new Chief Executive Officer (CEO), were other topics that werediscussed during the Supervisory Board meetings. The Supervisory Board
was also updated on compliance and on the developments around IT security.
The budget for 2020 was approved and the reinsurance renewal programme
was discussed at the Supervisory Board in December 2019.
Key items discussed in the Audit Committee were Atradius’ quarterly results,
the Annual Report and auditor´s management letter, internal audit reports,
audit plan, the evolution and sufficiency of technical provisions and the(re) appointment of the external auditor. These topics were discussed in thepresence of the external auditor PwC.
During 2019, the Remuneration, Selection and Appointment Committee
discussed the performance of the members of the Management Board,evaluated the scope and composition of the Management Board andperformed the selection process of the new CEO. It also reviewed theRemuneration Policy, variable pay and targets set for the members of theManagement Board and Strategic Staff and made recommendations on the(re)appointments of members of the Supervisory Board.
The Supervisory Board, under the remit of the Remuneration, Selection andAppointment Committee, undertakes a self-assessment every year and an
external assessment takes place once every three years. At the end of 2018,
the Supervisory Board undertook an external assessment and the results
were discussed during a feedback session with the full Supervisory Board at
the beginning of 2019.
As in previous years, both the Management Board and the Supervisory Board
participated in Atradius’ annual Permanent Education Programme. In 2019,
this programme covered, amongst other topics: Using Machine Reading and
Learning in improving Automatic Underwriting and the Dutch Government
Pension Reform Plan.
At the end of 2019 Isidoro Unda stepped down as Atradius’ CEO, a position heheld for the past 12 years. His contribution has been outstanding. He led thecompany through the financial crisis of 2008/2009 and has been responsible
for the success and international expansion in the years that followed. Today,
Atradius is a growing, profitable, solvent company that provides quality
service to its customers and has cultivated a strong corporate culture. Isidoro
Unda’s contribution has been exceptional and we would like to expressly
thank him for his work.

19

Atradius | Corporate Governance Atradius N.V.

David Capdevila was appointed as Atradius’ new CEO with effect from 1
January 2020. For David this marks a return to Atradius. He has been with
Grupo Catalana Occidente since 1992 and was Chief Market Officer (CMO)
and a member of Atradius N.V.’s Management Board from 2008 to 2013. We
welcome the appointment of David Capdevila as Atradius’ new CEO and lookforward to our future collaboration.
Dick Sluimers stepped down as a member of the Supervisory Board on 17
April 2019. He had been a member of the Supervisory Board of Atradius N.V.
and its predecessors for over 20 years. The Supervisory Board wishes to thankDick Sluimers for his insight and commitment over many years.
Furthermore, in 2019 Messrs. Ignacio Álvarez, Xavier Freixes and Hugo Serra
were re-appointed as members of the Supervisory Board.
Atradius N.V.’s Annual Report contains the financial statements for thefinancial year 2019, 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 2019.
The Supervisory Board would again like to thank the Management Boardand all Atradius employees for the outstanding results achieved in 2019 as
well as all customers for continuing to entrust their business to us. Finally,
the Supervisory Board is confident that the Atradius management team,stakeholders as well as employees will contribute to us having anothersuccessful year in 2020.
The Supervisory Board,
Ignacio Álvarez
Chairman

20

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 Companía 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, 38% of its capital is floating and the main
shareholder is INOC, S.A., holding 62% 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)

2019

2018

% change
2018/2019

Long-term capital market value

4,584.8

3,908.6

17.3%

Equity3,851.20

3,204.10

20.2%

Subordinated debt

200.5

200.4

0.2%

Return on long-term capital

11.1%

12.3%

Funds under management

14,377.3

12,323.5

Total revenue

4,547.7

4,345.2

4.7%

Consolidated result

424.5

386.4

9.9%

21

16.7%

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 17,000
insurance brokers

More than
1,600 branches

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.

22

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 Jesus 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.

23

Atradius | Corporate Governance Atradius N.V.

Building trust
Atradius endorses the importanceof sound corporate governance.
Key elements of independence,accountability and transparency createa relationship of trust between Atradius
and all its stakeholders; customers,
shareholders, employees, suppliers andthe 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
and the business connected with it. The Supervisory Board supervises theCompany’s general affairs and the policy pursued by the Management Board,as well as the performance of the management duties by the Management
Board members, taking into account the interests of the Company and thebusiness connected with it.

The Management Board
Composition
The Management Board of Atradius N.V. currently consists of five members.
David Capdevila - Chairman and Chief Executive Officer (started 1 January 2020)
Isidoro Unda – Chairman and Chief Executive Officer (until 31 December 2019)
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,
background and experience are available on our website.

24

Atradius | Corporate Governance Atradius N.V.

Role and procedures
The Management Board as a whole is responsible for the management andthe general 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 an effective risk management system, internal control system
and internal audit function in place. It submits the annual business plan andbudget of Atradius to the Supervisory Board for approval. The Management
Board rules describe the allocation of duties and the decision-making processof 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 avacancy, the management of Atradius N.V. will be conducted by the remaining
members or sole 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 the recommendation of the Remuneration, Selection andAppointment Committee of the Supervisory Board and in accordance withthe remuneration policy adopted by the General Meeting. You can findinformation regarding the amount of remuneration received by Management
Board members in the explanatory notes to the consolidated financial
statements of the Annual Report 2019.
Conflict of interest
A member of the Management Board with a potential conflict of interest
with the Company will immediately report this to the Chairman of theManagement Board, who will determine whether the reported case qualifies
as a conflict of interest. A member of the Management Board will notparticipate 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 nonconflicted members of the Management Board will pass the resolution. If
all members of the Management Board are conflicted, then the Supervisory
Board will pass the resolution.

25

Atradius | Corporate Governance Atradius N.V.

The Supervisory Board
Composition
The Supervisory Board of Atradius N.V. currently consists of nine members.
Ignacio Álvarez, Chairman
Francisco Arregui, Vice-Chairman
Bernd H. Meyer
Dick Sluimers (until 17 April 2019)
Xavier Freixes
Hugo Serra
Désirée van Gorp
John Hourican
Carlos Halpern
José María Sunyer
CVs of each of the Supervisory Board members, showing their background andexperience are available on our website.
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
Board on the Company’s strategy, performance and risks inherent to its businessactivities; the design and effectiveness of the internal risk management andcontrol systems and the financial reporting process. The Supervisory Board rules
describe the decision-making process and the composition and committees of
the Supervisory Board.
The General Meeting has the authority to appoint the members of theSupervisory Board on the recommendation of the Remuneration, Selection
and Appointment Committee of the Supervisory Board. A Supervisory Board
member may be suspended 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 theSupervisory Board, by which each Supervisory Board member shall resign after
a maximum of four years after the date of appointment. A resigning Supervisory
Board member may be reappointed. A Supervisory Board member will resign
early in the event of inadequate performance or in other circumstances in which
resignation is deemed necessary by the other members 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 carryout its various responsibilities. The current members of the Supervisory Board
have extensive 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
the decision making of the Supervisory Board, draws up the agenda of theSupervisory Board meetings, chairs the Supervisory Board meetings and theGeneral Meetings of Shareholders. The Chairman also ensures the adequate
performance of the Supervisory Board and its committees, ensures the annual
evaluation of the functioning of the members of the Management Board andthe Supervisory Board, and acts on behalf of the Supervisory Board in serving
as the principal contact person for the Management Board. The Chairman of theSupervisory Board is assisted in his role by the Company Secretary.

26

Atradius | Corporate Governance Atradius N.V.

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 by the fullSupervisory Board, rather than 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 theCompany’s financial statements, the external auditor’s qualifications, andthe performance of internal and external auditors. The Audit Committeemonitors, independently and objectively, the financial reporting process
within Atradius and the system of internal controls. The Audit Committee
also facilitates the ongoing communication between the external auditor, theManagement Board, the internal audit department and the Supervisory Board
on issues concerning the Company’s financial position and financial affairs.
In 2019, the Audit Committee met four times. The Audit Committee currently
consists of Xavier Freixes (Chairman), Francisco Arregui and Bernd H. Meyer.
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 remuneration ofsenior management and other corporate governance matters. In 2019, theRemuneration, Selection and Appointment Committee met four times. 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 theSupervisory Board’s expenses are reimbursed. You can find information
regarding the amount of remuneration received by Supervisory Board
members in the explanatory notes to the consolidated financial statements of
the Annual Report 2019.
Conflict of interest
A member of the Supervisory Board with a potential conflict of interest
with the Company will immediately report this to the Chairman of theSupervisory 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 decision-making 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 othernon-conflicted Supervisory Board members will pass the resolution. If all
Supervisory Board members are conflicted as referred to above, then the
General Meeting will pass the resolution.

27

Atradius | Corporate Governance Atradius N.V.

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

The internal and external auditor
Internal auditor
The internal auditor fulfils an important role in assessing and testing theinternal risk management and control system. The Director of Internal Audit
reports to the Chairman of the Audit Committee and, with respect to day-today activities, to the Chief Executive Officer of Atradius.
External auditor
The General Meeting appoints the external auditor on the recommendationof 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 and permitted non-audit services to be performed by theexternal auditor. The Audit Committee ensures the external auditor is notappointed to render non-audit services that are listed explicitly as prohibited
services in the Atradius Compliance Policy on Auditor Independence.
The General Meeting appointed PricewaterhouseCoopers Accountants N.V. as
the Company’s external auditor for the financial year 2019.

28

The global economic environment
Global growth has decreased in 2019.

29

Atradius | Consolidated management report

The global economic
environment
Declining global growth
Global growth has decreased in 2019, amid weak global manufacturing
activity, with the broadening of tariffs between the US and China as the main
culprit. This created a soft patch for growth in both advanced and emerging
economies. In 2019 global output expanded at a rate of 2.6%, compared to 3.2%
in 2018.

Advanced markets
Major economies such as the United States and especially the eurozone saw
a decline of growth. Growth in the US declined in 2019 on the back of weakerbusiness confidence, unwinding of fiscal stimulus and the escalating trade
war with China. Domestic demand remained the main growth driver. Labour
market conditions continued to improve, with the unemployment rate
reaching 3.5% in December.
Weak exports have kept a lid on growth in the eurozone. In addition,
production lines in the car industry (especially in Germany) were adjusting
to comply with new emission standards. Domestic demand remained fairly
resilient as employment continued to expand and low inflation is providing
a boost to real incomes. The labour market continues to bring good news,
though the pace of job creation is cooling. The unemployment rate seems to
be bottoming out at around 7.4% (December 2019).
Financial conditions remained accommodative in 2019, despite monetary
tightening by the Federal Reserve (Fed) in 2018 and less monetary policy
stimulus by the European Central Bank (ECB). However, over the course of2019 both the Fed and the ECB took steps towards monetary loosening. The
Fed has implemented several policy rate cuts, whereas the ECB reduced its
deposit rate in September and resumed its bond-buying programme. Credit
growth in the eurozone continued to recover in 2019, with credit conditions
broadly unchanged over the year.

30

Global economic growth

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

Emerging markets
Emerging market economies also experienced weakening of growth in 2019.
Major emerging markets in Asia felt the negative spillover from rising tradetensions with the US. But economic woes were certainly not confined to
Asia alone. The trade war and a global decline in industrial output also haveaffected other emerging markets, like Eastern Europe and the metal exportersin Latin America.
Growth in China slowed due to regulatory efforts to rein in debt and theescalating trade tensions with the US. GDP growth slowed to 6.2%. A liftingof fiscal stimulus, targeted monetary easing and some easing of the pace ofregulatory strengthening in the financial sector initiated in the second halfof 2018 only partially compensated for weakening domestic demand andexport growth. In Latin America, growth almost stalled in 2019, as Argentina
was hit once again by a severe confidence crisis and remained in recession.
Growth in Brazil disappointed due to softening household consumption,
shrinking investments and the transitory drag from a mining disaster. In
Mexico slowing of private consumption and weakening business sentimentwere weighing on growth, reflecting policy uncertainty after the 2018 generalelections and uncertain trade relations with the US.

Global insolvencies ticking up
For the first time in a decade, the number of companies going insolvent
around the world was increasing in 2019. Rising insolvencies are to be
expected in line with the maturing business cycle, especially in developed
markets. But the global industrial downturn and US-China trade war arecompounding challenges for businesses. The rise in bankruptcies was visible
in all major regions. North America surpassed Europe in having the strongest
rate of insolvency growth. Credit conditions for businesses remained
favourable across advanced markets in 2019 as central banks shifted to amore accommodative stance.
In the eurozone, the insolvency picture was mixed across countries, but
decreased on average despite weakness in international trade and Brexitrelated uncertainty. Germany as the biggest eurozone economy saw a decline
in insolvencies, despite weak manufacturing output, particularly in the car
industry. Southern Europe had another year of strong economic performance,
causing insolvencies to decline in most countries, including Portugal andGreece. Insolvencies also declined in Italy in a context of low economic growthand political uncertainty caused by an early collapse of the government andtensions with the European Commission over budgetary targets. On the other
hand, there were also several countries with a rise in insolvencies. Spainsaw a rise in insolvencies despite another year of robust economic growth.
In Northern Europe, lower external demand led to subdued growth in the
Netherlands and Belgium, causing insolvencies there to rise.
In the US insolvencies rose due to the strong USD and unwinding of procyclical fiscal policy, compounded by trade policy uncertainty which isweighing on the business environment. The United Kingdom witnesseda sharp rise in insolvencies amid rising labour costs and Brexit-related
uncertainty which was weighing on business confidence. Several advanced
markets in Asia-Pacific, notably South Korea, Hong Kong and Singapore, felt
negative spillovers from the US-China trade war.

31

Global commodity prices
Price index, 2010 = 100

Atradius | Consolidated management report

The insolvency environment for emerging markets was also rather negative.
Of all major emerging economies, Turkey and Brazil were faced with a rise in
insolvencies, while the picture was more benign for Russia. Turkey’s economy
came to a near standstill in 2019, related to a loss of confidence in the liraaccompanied by a credit crunch in the year before and a sharp contraction
in fixed investments. Brazil’s economic recovery experienced a setback
due to low domestic demand and the lagged effects of a mining disaster.
Russia faced a slowing economy due to weakening consumer demand, thedepreciation of the rouble and the lower-than-expected oil price.

Outlook for 2020
In 2020 growth is likely to decelerate further to 2.3%. The continued
uncertainty from trade policies is compounded by the negative effects fromthe rapid spread of the coronavirus, which is affecting global supply chains.
Across emerging markets, growth is forecast to remain constant in 2020
compared to 2019. Latin America will continue to underperform, but growth isprojected to strengthen, which reflects expectations of recovery in Brazil and  
Mexico. Argentina’s economy is expected to contract again in 2020, but by lessthan in 2019. Eastern Europe is forecast to extend its 2019 growth rate next
year. A projected pick-up of growth in Russia and Turkey lift growth in theregion higher, but moderation of growth in several other Eastern European
countries cancels this out. Asia will show the highest growth rates, though thecoronavirus is exacerbating the underlying slowdown of domestic demand in
the Chinese economy. This is negatively impacting  tourism and trade flows
in Asia.
Advanced markets are expected to see their growth rates decline as trademeasures and the negative effects of the COVID-19 virus are weighing on
economic activity. Eurozone growth is slowing further in 2020 amid achallenging external environment. US growth is forecast to moderate as fiscal
policy shifts from expansionary in 2019 to broadly neutral in 2020.
In line with subdued growth, business failures in advanced markets are
expected to rise again in 2020. However, easing monetary policy should
provide some support for economic growth and corporate activity. In the
UK insolvencies are expected to rise again The downside risk of a no-deal
Brexit has reduced now that the UK and the EU have reached a withdrawal
agreement, however uncertainty will continue as the two parties begin tonegotiate a future trade agreement, clouding the growth outlook. Dependingon the final conditions of the withdrawal agreement, the number of UK
business failures could be higher than expected, prolonging the uncertainty.
This would also have negative spillovers on other EU countries.
Overall, the picture for 2020 is one of moderating global growth. Economic
conditions are expected to remain challenging in 2020 given trade policy
tensions as well as the potentially negative impact of the coronavirus on
supply chains, both affecting trade and investment. But we also expect that
relatively strong consumer spending will keep a recession at bay.

32

Atradius | Consolidated management report

Excellent performanceand solid results(EUR thousands)

2019

2018

1,896,024

1,781,037

6.5%(810,989)(778,337)(4.2%)

Gross insurance operating expenses(680,260)(632,561)(7.5%)

Reinsurance result

Gross Insurance revenue
Gross insurance claims and loss adjustment expenses(1) (2)(82,596)(105,632)

21.8%

Insurance result

322,179

264,50721.8%

Service income(1)

118,575

120,099(1.3%)

Service expenses(115,340)(116,297)

0.8%

(2)

Service result

3,235

3,803

(14.9%)Net investment result

17,682

22,145(20.2%)

Operating result before finance costs

343,096

290,455

18.1%

Result for the year (after tax)

227,708

202,655

12.4%

3,531

3,545

(0.4%)

Employees (FTE)(1)

  Overview includes inter-segment revenue and claims expenses  2019 Gross Claims Expenses, Gross Claims Ratio and the Reinsurance result shown in the management report exclude a single large claim of minus
EUR 83.9 million that was 100% reinsured and had no impact on the Insurance Result.

(2)

Gross
2019

Net
2018

2019

2018

Claims ratio

42.8%

43.7%

43.3%

44.7%

Expense ratio

35.9%

35.5%

30.0%

31.5%

Combined ratio

78.7%

79.2%

73.4%

76.2%

Revenue by business segment
6.1%
7.0%

5.9%
81.1%

Credit Insurance (including ICP)
Reinsurance
BondingServices

33

Atradius | Consolidated management report2019 proved to be another year of strong performance for Atradius, with oursteadfast commitment to customers and best-in-class service continuing todrive positive results. Gross insurance revenue grew by 6.5%, substantiallymore than in 2018 (3.6%). The overall insurance result however grew an evenfurther 21.8% through effective risk management and the continued pursuit ofcost efficiencies. Despite changes in the valuation of minority participations,the investment result contributed positively to the bottom line thanks to thepositive performance of the investment portfolio. Gross claims ended at EUR
811.0 million, an increase of 4.2% driven by group-wide. Claims activity during
the year ultimately proved to be quite stable, and with a continued focus on
profitable growth the gross claims ratio ended slightly below that of 2018(42.8% in 2019, coming from 43.7% in 2018).
Brokerage fees increased by 9.4% driven by the overall growth in different
geographical regions and markets. Operating expenses rose by 6.6%, in linewith revenue growth due to increased investment in enhancing customer
experience by further developing internal systems and customer platforms
such as our award winning Atrium platform. Despite this increase, the Net
Combined Ratio for the year decreased slightly to an excellent 73.4%. Thisdecrease is partly due to the reinsurance programme, which while remaining
under a single quota share contract, retention increased by 2.0 percentage
points to 62.0% (up from 60.0% in underwriting year 2018). The reinsurance
result in 2019 was EUR 82.6 million (21.8% better than the previous year ),driven by the increase retention along with higher reinsurance commissions
in the year.
Overall 2019 saw the continuation of stable and consistent growth trends inmost of the regions across the group. While Spain, our largest market, faces
the pressures of an increasingly competitive environment and continued
price erosion, it continues to grow thanks to the volume of insured turnover.
Both our Global unit and our local business in the Asian markets continued todevelop well, contributing the most substantial revenue growth of the year.
Central & Eastern Europe and the Americas continued to grow and performconsistently, along with the UK & Ireland which saw a very stable androbust growth trend throughout the year, despite our prudent underwriting
approach in this region.
Our Special Products and Reinsurance units also developed well showing
even stronger growth than in 2018, while our Bonding unit developed
more moderately and the market in Italy struggled to grow within the very
challenging local competitive environment.

34

Atradius | Consolidated management report

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

2019

2018

1,496,618

1,397,309

7.1%

Information income

136,500

132,5103.0%

Insurance revenue

1,633,119

1,529,819

6.8%

Gross insurance claims and loss adjustment expenses (1)(688,292)(680,354)(1.2%)

Gross insurance operating expenses(563,226)(530,232)(6.2%)(1)

Result before reinsurance

381,600

319,234

19.5%

Reinsurance result(66,075)(80,109)

17.5%

Result after reinsurance

315,525

239,125

31.9%

42.1%

44.5%

2.4% pts

Total credit insurance and ICP gross claims ratio(1)

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

Credit insurance & ICP revenue by region
9.1%

8.4%

22.5%

Spain & Portugal
Northern & Central Europe

6.6%Western Europe
Southern Europe
Asia
21.6%

31.8%

Americas2019 was another positive year for our credit insurance business withpositive growth trends developing further across the group. Grossinsurance revenues grew by 6.8% (6.1% at constant foreign exchange
rates) while net claims expenses increased only moderately by 2.8%,
generating a result after reinsurance of EUR 315.5 million (32.0% higher
than in 2018).
With our commitment to excellence while keeping our customers at
the very heart of everything we do, 2019 proved to be another year of
exceptional customer retention with a record high retention rate of
93.4%. Our credit insurance portfolio showed solid growth with units
across the group generally reporting very favourable development, andcollectively generating EUR 1,633.1 million in revenue, a 6.8% increase
coming from 2018.

35

Atradius | Consolidated management report

In 2019 several competitive environments proved to be increasingly
challenging, however almost every one of our local credit insurance
units grew versus the previous year. Asia maintained its strong growthtrend in 2019 as we continue to pursue our ambition in this region andNorth America showed excellent growth of 14.5% despite strenuous pricepressure. Our markets in the UK and Ireland along with Central & Eastern
Europe showed strong and stable growth throughout the year (14.3% and9.5% respectively) along with Oceania (6.5%) and France (4.2%). The restof our European markets also showed positive development with the
exception of our local Italian market, which continues to persevere under
the strain of an exceptionally challenging competitive environment. Spain,
our largest market, also saw no relief from competition but nonethelesscontinued to grow as a result of strong retention and increased volumes of
insured turnover.
Gross claims expenses of local credit insurance were EUR 484.5 million
with a gross claims ratio 3.3% points lower than the previous year. Bothour Global and Special Products units on the other hand continued
growing while moderately improving their claims ratios.
Atradius Global once again surpassed its highest recorded revenue growth
rates to date. This was mainly generated by the existing customer basethrough the excellent retention of Global’s first class service.
Our Special Products Unit continued to maintain momentum contributing
stable and profitable growth while supporting the increasing demand
for non-cancellable credit limits, single situations and structured tradefinancings across the globe.

36

Atradius | Consolidated management report

Reinsurance(EUR thousands)

2019

2018

Insurance revenue

140,218

131,364

Gross insurance claims and loss adjustment expenses(75,426)(72,376)(4.2%)

Gross insurance operating expenses(57,447)(51,526)(11.5%)

7,344

7,462

(1.6%)(3,990)(4,306)

7.3%

Result before reinsurance
Reinsurance result

6.7%

Result after reinsurance

3,354

3,155

6.3%

Gross claims ratio

53.8%

55.1%

1.3% pts

Reinsurance revenue by region of cedent
16.6%

34.3%

Europe11.7%

Asia & Oceania
Africa & Middle East
South America

37.4%

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 126 clients over 61 countries,
maintaining a balanced diversity within the portfolio. The underlying
business consists of 61% credit insurance and 39% 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 32% 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 for 2019, of EUR 140.2 million, increased from EUR
131.4 million in 2018. The claims ratio decreased from 55.1% in 2018 to 53.8%
in 2019.

37

Atradius | Consolidated management report

Bonding(EUR thousands)

2019

2018

Insurance revenue

122,687

119,854

2.4%

Gross insurance claims and loss adjustment expenses(47,271)(25,607)(84.6%)

Gross insurance operating expenses(51,986)(42,679)(21.8%)

Result before reinsurance

23,431

51,568(54.6%)

Reinsurance result(12,530)(21,216)

40.9%

Result after reinsurance

10,90030,351(64.1%)

Gross claims ratio

38.5%

21.4%

(17.1% pts)

Bonding revenue by region
9.5%

2.6%

33.7%

24.8%

Italy
FranceNordic & Germany
Spain
Other
29.4%

As a leading bond and surety provider in Europe, Atradius Bonding holds
long-standing expertise and in-depth local market knowledge. Atradius
Bonding is currently active in twelve countries: Italy, France, Spain, Portugal,
Denmark, Finland, Norway, Sweden, Germany, Netherlands, Belgium
and Luxembourg. Our strategic focus is to develop new technologies tosupport and enhance the growth of our customers’ businesses while further
developing our domestic and international presence. Within just 1 year of
the introduction of our bonding offering in Portugal we have been able toconsolidate our strong position in the Iberian market, offering our current
bonding costumers in Spain the support to expend their business into
Portugal.
Innovation is essential to our business strategy. As the bonding market
becomes increasingly technologically advanced we have made providing upto-date products and tools to our customers a priority. Our local web portals
boost our customer service  through accessibility, speed and flexibility. They
enable our customers to access their policies and bond limit information ata click of a button, 24/7. Our web portals help our customers minimize theamount of time they spend on administration and enable them to always beon top of their business. They provide safety, efficiency and transparency.
A business transformation programme is currently on the way, aiming at
providing a modern state-of-the-art user journey and experience, by which
our customers and partners feel truly supported, and can fully relate to. It will
help us secure our performance and future profitability. Furthermore, it will
enable geographical expansion and enhancement of the flexible products andsolutions we offer to our customers.

38

Atradius | Consolidated management report

The business transformation programme will deliver a common platform
for the whole of our bonding business, which will further foster productivity,
capacity and efficiency of operations. We have already begun building theplatform following an intensive assessment of business requirements.
Bonding revenue in 2019 reached EUR 122.7 million, a 2.4% increase
compared to previous year. Several countries contributed to this performance,
most notably the mature markets such as Spain, Denmark and Italy. Whileclaims activity was on the whole moderate and contained in almost every
region, a single loss relating to a sizeable policy resulted in an increase inclaims expenses compared to the previous year.

39

Atradius | Consolidated management report

Services(EUR thousands)

2019

2018

Service income (1)118,575

120,099

Service expenses(115,340)(116,297)

0.8%

3,235

3,803

(14.9%)

Service result(1)

Overview includes inter-segment revenues.

Service revenue
57.0%

43.0%

Information
servicesC ollections & Other

Atradius’ services segment comprises our debt collection operations, theDutch State Business and our information service businesses.
In 2019 demand for the services Atradius offers beyond its insurance
products continued, and in some cases increased. Atradius collections saw aanother good year of commercial development, geographical expansion andrevenue growth. Our information service company Graydon generated further
cost efficiencies while facing the challenges of revenue growth in its highly
competitive market, and Atradius DSB continued to serve on behalf of the
Dutch state as the export credit agency of the Netherlands.

Debt Collection
Atradius Collections’ income increased 11.1% in 2019. Debt placements
increased 7%. Collected sums have also increased 14% in 2019, a result of
the improved quality and performance of our local teams. Our performancedeveloped positively despite uncertainty in some economies. Strong
foundations were forged by widening the customer base and establishinglong term relationships, providing a positive outlook for the years to come.
The USA-China trade war, the political challenges in Latin America andthe continued emergence of Southeast Asia contributed to an increase in
outstanding invoices and trusted debt placement. In Western Europe on theother hand, the instability brought on by Brexit has driven insolvencies andan upsurge of debt placement.
Continuing the strategy of further diversification and geographical coverage,
Atradius Collections was established in Dubai and started partnerships inRomania and South Africa. Geographical expansion and enhancing ourpresence where strategic opportunities present remain key alongside ourcommitment to excellence. Thinking globally and acting locally remains atthe very core of Atradius Collections’ strategy.

40(1.3%)Atradius | Consolidated management report

Atradius Dutch State Business
The technical results for the account of the Dutch state were positive
throughout 2019 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
in other countries.
ADSB also continues to cover development-relevant investments and export
contracts in medium-income and lower-income countries which benefit(local) SMEs. We provide this service under the Dutch Good Growth Fund.
The Dutch Trade and Investment Fund enables ADSB to provide cover oninvestments and export contracts up to EUR 5 million, for which financial
support by commercial banks is not available. By discounting bills of
exchange, ADSB can also finance these contracts.

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 show modest growth, with fierce competition at thelow-end segment and customers moving to value-added services. In thiscompetitive market the company was able to realize revenues that arealmost equal to 2018.
The company is moving towards more tailored solutions for its customers,
offering scalable products and services. During the year the company
launched a new solutions for (international) credit reports and monitoring.
Reactions of clients on the look and feel and the user experience of theplatform are very positive. In the UK the company launched Graydon
Onboarding & Detect, a decision support solution for customer onboarding
and fraud detection.
In the Iberian markets, Iberinform continued to support our insurance
business as well as our customers, showing both positive growth in revenue
and improved profitability. Additionally, Iberinform Portugal became fully
controlled by Atradius, with our participation increasing form 80% to 100%in 2019.

41

Shaping tomorrow together
Digital technologies are changing the landscape and thepace of change is rapid. To provide the best service, weare embracing these changes together as a company.

42

Atradius | Consolidated management report‘Shaping tomorrow
together’; a call to action
for our employees
Digital technologies are changing thelandscape and the pace of change is
rapid. To provide the best service, we areembracing these changes together as acompany.
Shaping Tomorrow Together, an on-going Atradius initiative, started with
an e-learning course focussed on the Atradius Business Transformation
programmes. It consists of three themes:
1.	‘Be part of it’; is about providing employees with the information andtools they need to own their personal development and adapting a growthmindset. Through this theme we invite staff to think about their own
development.
2.	‘Atradius Business Transformation is more than new systems’; looks at
the projects and programmes that will shape the future of the company
and embracing new ways of working and readying employees for the new
systems and important compliance projects that will be rolled out over time.
3.	Embrace new technologies’; is about the innovation topics that will also be
important for our future. It will support employees in building their skills
and knowledge about new technologies and provide ways for them to shareinnovation ideas.
The Atradius Academy supports an environment of continuous
learning and development. We invest in people by offering a wide choiceof development opportunities. At any time and from any place, employees
can connect to our Learning Management System to find a wide selection ofe-learning courses.
The 2019 e-learning course, “Shaping tomorrow together”, was followed by
all staff and more than 2,000 people gave feedback. Our employees rated thecourse on average very positive.
We organised three management development programmes: Stepping
Forward 1 and 2, and Moving Forward for country managers. All focusing on
the management aspects of business transformation.

43

Atradius | Consolidated management report

For our Management Board and Supervisory Board, we organised apermanent education session covering two topics: Dutch Government
Pension Reforms Plans and Using Machine Reading & Learning in improving
Automatic Underwriting.
We developed a training for our sales people that meets the requirementsof the Insurance Distribution Directive (IDD). When successfully fulfilling
the requirements of the directive a certificate will be granted. The training
activities are tracked in the Atradius Academy Learning Management System.

Evolve+ is a multi-year cultural change programme that focuses on
increasing innovation and maintaining our customer-focus. In 2019,several initiatives focused on spreading awareness and knowledge about
digitalisation. The Digital Ambassador Programme trained selected
representatives of various regions in concrete digital trends and associateddigital initiatives. The tribes, topic-specific communities, organised webinars
on selected topics to share information about individual initiatives.
Atradius Moves was a CEO sponsored company-wide step-challenge witha theme built around corporate responsibility and vitality. Employees
participated in teams and supported various environmental or social
causes, such as clean water access or climate action. Over 1,400 employees
participated and walked together in teams of five for their chosen causes.

Gender diversity
Dutch legislation, effective between 13 April 2017 and 31 December 2019,required large Dutch companies, when nominating or appointing members
to their Management Board or Supervisory Board, to take into account, as far
as possible, a balance in gender, so at least 30% of the positions are held by
women and at least 30% by men. In 2019, the composition of the Management
Board and the Supervisory Board deviated from these percentages.

Indicators

2019

2018

2017 2016 (1)

2015

2014

2013

2012

2011

2010

Headcount

3,692

3,707

3,756

3,758

3,333

3,298

3,257

3,315

3,304

3,318

Total average number of employees(full-time equivalent)

3,538

3,571

3,591

3,584

3,153

3,132

3,132

3,139

3,159

3,318

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

3,530

3,545

3,596

3,586

3,161

3,139

3,107

3,143

3,149

3,171

Retention rate

90.3%

91.1%

91.1%

92.3%

92.0%

94.9%

91.4%

92.6%

91.1%

85.8%

Sick leave

3.6%

3.8%

3.1%

2.9%

3.1%

2.8%

3.0%

3.1%

3.4%

3.6%

Expenses as % of salaries

2.0%

2.5%

1.8%

1.7%

1.6%

1.5%

1.2%

1.4%

1.3%

1.3%

Number of training attendees

9,844

9,722

9,228

7,680

6,366

5,646

5,283

1,656

1,952

1,236

Development and training(1)

Including FTEs from Graydon, Iberinform Portugal, Gestifatura and Informes since 2016.    

44

Atradius | Consolidated management report

Securing futurefinancial stability
As a global insurance company, Atradius
is exposed to many and varied risks
linked both to the nature of our 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.

Risk management
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 the RSMB. These
are in specific risk-related areas such as 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 ofrisk they can accept. This framework ensures we assume and manage risks
in a controlled way, and in line with the risk appetite of the company. For thedescription of the main risks and uncertainties and how these are managed
please refer to Note 4 Risk and Capital management of the consolidated
financial statements.
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 activities and risk profile
measurement and enhances Atradius’ ability to monitor and manage risk
levels within the organisation through the allocation of risk-based capital. In
addition, we use the model for calculating regulatory capital requirements
under Solvency II.

45

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 morestable business 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 businessconduct. 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 businessprocedures. For example, the Policy on Customer Due Diligence addresses
potential risks in areas such as sanctions regulations while the Policy
on Insurance Distribution outlines the Atradius rules and guidelines forcompliance with the EU Insurance Distribution Directive.
The compliance function supports the management of Atradius in meeting
its objective of being compliant with applicable laws, rules and external andinternal regulations. Within Atradius this is headed by the Group ComplianceManager. The Group compliance function is responsible for the maintenanceand overall effectiveness of 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. This helps us 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.
In 2019, all Atradius’ entities were able to meet their financial obligations
efficiently and to comply with local legal and regulatory requirements.
Shareholders’ funds and Subordinated debt
Shareholders’ funds at the end of 2019 amounted to EUR 2,008.7 million, an
increase of 10.3% from EUR 1,821.4 million at year-end 2018, mainly due to thestrong positive results after tax.
Subordinated debt of EUR 325 million (nominal value) at the end of 2019consisted of subordinated notes of EUR 250 million and a subordinated loanof EUR 75 million (both amounts unchanged versus 2018), which qualify as
Tier-2 basic own funds for Solvency II. For further details, please see Note 16of the consolidated financial statements of the Annual Report 2019.

Regulatory capitalAt the end of 2019, Atradius’ insurance companies collectively held a solvency
ratio well above 200% (1).
Atradius applies a partial internal model to calculate regulatory capitalrequirements under Solvency II. For further details on the main Solvency
II regulatory capital requirements, please see the Solvency and Financial
Condition Reports of Atradius’ European regulated entities.
(1) Subject to finalisation of any audit procedures.

46

Corporate social responsibility
We aim to manage the ethical, environmental and social
risks of the way we do business.

47

Atradius | Consolidated management report

Corporate social
responsibility
Corporate social responsibility isembedded in our culture and our
day-to-day operations. We recognize
the intrinsic value of insurance, which
contributes to the welfare of society byoffering companies and their people
protection from risks they face in theiractivities.
Managing risk enables trade, which is essential for economic development. It
makes companies grow, thereby creates long term value.
We follow the principles of responsibility, ethics, transparency andcommitment to the law in all our activities, and try to maximise thecreation of sustainable social value for stakeholders across the globe. We
will minimise and, if possible, prevent potential negative impacts on socialand environmental matters arising from our activities, by taking pro-active
measures. It is in the interest of our stakeholders and ourselves to safeguard
our reputation and, where possible, improve it further.

Atradius and Corporate responsibility
As a responsible global company, we aim to manage the ethical,
environmental and social risks of the way we do business. While endeavoring
to make a valuable contribution to successful world trade and our customers’
prosperity, we incorporate environmental aspects in our value chain andacknowledge 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 to take our responsibility in helping to secure growth
opportunities for future generations and look carefully after the planet welive on, Atradius continues to support and implement the ten principles of theUnited Nations Global Compact (UNGC) on human rights, labor conditions,the environment and anti-corruption. Every year we provide an update on
progress made.
Our Corporate Responsibility Policy is managed by our Corporate
Responsibility Team, which is joined by representatives from offices allover the world. The team coordinates group activities and addresses issues

48

Atradius | Consolidated management report

identified as most material by our stakeholders.  
The Corporate Responsibility Policy of Atradius is in line with the Corporate
Responsibility Plan of Grupo Catalana Occidente (GCO), our parent company.
An infographic added to this report shows that the GCO Plan is governedby four principles: integrity and honesty, impartiality, transparency andconfidentiality, and professionalism. It identifies three fundamental areas:
trust, excellence in service and innovation, and positive impact. There isalso one so-called parallel cross-cutting area: dissemination and reporting,underlining the aim to improve both internal and external communication

The Corporate Responsibility Team of Atradius evaluates the effectiveness ofthe company’s Corporate Responsibility Policy and suggests improvements to
the Management Board when applicable. The Team cooperates with Atradius’
Director Legal and Compliance and Data Protection Officer, to ensurethat relevant changes in legislation are incorporated into our Corporate
Responsibility policies.

49

Atradius | Consolidated management report

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

2019

2018

2018/2019

KPI

Total

Total

ChangeNumber of reporting countries

32

32

-

Number of offices

99

98

increase

102,629

102,491

increase

Electricity from non-renewable source (kWh)7,037,424

7,673,245

decrease

Electricity from renewable source (kWh)2,874,299

2,965,137

decrease

Total office space (m2)Energy (gas & electricity) usage

29.0%

27.9%

increase

Total electricity (kWh)% of renewable electricity

9,911,723

10,638,382

decreaseGas (m3)

401,971

410,955

decrease

13,455,503

14,624,645

decrease

Employee air travel (km)15,050,653

14,902,324

increase

Employee rail travel (km)2,648,104

3,131,502

decrease

Total energy
TravelCompany lease car travel (km)9,168,351

10,294,129

decrease

26,867,108

28,327,955

decrease

Energy (CO2)

6,578

8,577

decrease

Travel (CO2)

7,290

6,323

increase

Total (CO2)

13,86814,900decrease

Non-recycled paper (sheets A4)

11,823,839

13,761,563

decrease

Recycled paper (sheets A4)

3,876,649

3,744,505

increase

Total travel (km)CO2 footprint (tonnes of CO2)Paper used

% recycled paper
Total paper
Water usage (m3)

24.7%

21.0%

increase

15,700,488

17,506,068

decrease

38,48039,210decrease

5.7

5.0

increase

688.0

1,408.0

decrease

693.7

1,413.0

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.
In 2018, due to refurbishing old buildings, we show a high number of non-hazardous waste. 2019 shows normalised numbers.

50

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

Consolidated financial statements 2019
Contents
Consolidated
2
Consolidated financial
financial statements
statements .....................................................................................................................................................................
.................................................................................................................................................................. 52

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

General information.....................................................................................................................................................................................56
Summaryof significant
accounting policies ........................................................................................................................................... 6

32

Summaryof significant
accounting
policies .......................................................................................................................................56
Criticalaccounting
estimatesand judgements
in applying accounting policies..................................................................... 25

43

Criticalestimates ....................................................................................................................................................................
and judgements in applying accounting policies .................................................................... 27
74
Risk
andaccounting
capital management

54
65

Risk andinformation....................................................................................................................................................................................
capital management .................................................................................................................................................................. 47
76
Segment
Segment information...................................................................................................................................................................................96
Intangible
assets .............................................................................................................................................................................................
51

Intangible
assets..........................................................................................................................................................................................100
76 Property,
plant
and
equipment & investment property................................................................................................................... 53
7 Property, plant and equipment & investment property.................................................................................................................102
8 Subsidiaries ..................................................................................................................................................................................................... 56
8 Subsidiaries ................................................................................................................................................................................................... 105
9 Investments in associated companies .................................................................................................................................................... 56
9 Investments in associated companies ................................................................................................................................................. 105
10 Financial investments.................................................................................................................................................................................. 59
10 Financial investments ...............................................................................................................................................................................108
11 Receivables ....................................................................................................................................................................................................... 59
11 Receivables ....................................................................................................................................................................................................108
12 Deferred acquisition costs........................................................................................................................................................................... 60
12 Deferred acquisition costs ........................................................................................................................................................................109
13 Other assets and accruals ............................................................................................................................................................................ 60
13 Miscellaneous assets and accruals ........................................................................................................................................................109
14 Cash and cash equivalents ........................................................................................................................................................................... 61
14 Cash and cash equivalents ........................................................................................................................................................................110
15 Capital and reserves ....................................................................................................................................................................................... 61
15 Capital and reserves ....................................................................................................................................................................................110
16 Subordinated debt ......................................................................................................................................................................................... 63
16 Subordinated debt .......................................................................................................................................................................................112
17 Employee benefit assets and liabilities .................................................................................................................................................. 63
17 Employee benefit assets and liabilities ................................................................................................................................................112
18 Insurance contracts ....................................................................................................................................................................................... 69
18 Insurance contracts .....................................................................................................................................................................................118
19
provisions..............................................................................................................................................................................................12273
19 Other
Provisions......................................................................................................................................................................................................
2074
20 DeferredDeferred andand current
current income
income tax
tax ............................................................................................................................................................
.......................................................................................................................................................... 123
21
21 Payables
Payables.............................................................................................................................................................................................................76......................................................................................................................................................................................................... 125
22
22 Other
Other liabilities
liabilities................................................................................................................................................................................................76............................................................................................................................................................................................ 125
2377
23 NetNet premium
premium earned
earned.....................................................................................................................................................................................
.................................................................................................................................................................................. 126
2477
24 Service
Service andand otherother income
income............................................................................................................................................................................
......................................................................................................................................................................... 126

25 Net
Net income
income fromfrom investments
investments ...................................................................................................................................................................79................................................................................................................................................................ 128
25
26 Insurance
Insurance claims
claims ............................................................................................................................................................................................
.........................................................................................................................................................................................13026
81
27 NetNetoperating
operatingexpenses
expenses................................................................................................................................................................................
............................................................................................................................................................................130
27
81
28 Finance
Finance expenses
expenses..........................................................................................................................................................................................
.........................................................................................................................................................................................131
28
82
29 Income
Income tax
tax.......................................................................................................................................................................................................
......................................................................................................................................................................................................131
29
82
30 Dividends
Dividends perper shareshare .....................................................................................................................................................................................
................................................................................................................................................................................... 13230
83
31 Assets
Assetsnot
notfreely
freelydisposabledisposable.......................................................................................................................................................................
.................................................................................................................................................................... 132
3183
32 Capital commitments and contingencies ........................................................................................................................................... 132
32 Capital commitments and contingencies .............................................................................................................................................. 83
33 Personnel ....................................................................................................................................................................................................... 132
33 Personnel ......................................................................................................................................................................................................... 83
34 Related party transactions ....................................................................................................................................................................... 132
34 Related party transactions ......................................................................................................................................................................... 83
35 Events after the reporting period .......................................................................................................................................................... 134
35 Events after the reporting period ............................................................................................................................................................ 85

51

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

Consolidated financial
statements
Consolidated statement of financial position
AssetsNote

31.12.2019

31.12.2018

Intangible assets

6

257,701

253,297

Property, plant and equipment

7210,051

132,317

Investment property

7

13,988

9,641

Investments in associated companies

963,11063,428Financial investments

102,589,165

2,328,948

Reinsurance contracts

18

611,602597,716

Deferred income tax assets

20

35,61537,271

Current income tax assets

20

40,88948,935

Receivables

11

239,565

237,071

Accounts receivable on insurance and reinsurance business

192,782

180,503

Other accounts receivable

46,78356,568Other assets

601,443

570,315

Deferred acquisition costs

12

76,30071,743

Other assets and accruals

13525,143

498,572

Cash and cash equivalents

14404,244446,357

5,067,373

4,725,296

2,008,726

1,821,405-

33

2,008,726

1,821,438

323,982

323,790

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

16

Employee benefit liabilities

17

124,884

100,182

Insurance contracts

18

1,706,229

1,619,869

Other provisions

19

2,620

2,679

Deferred income tax liabilities

20

103,509

101,155

Current income tax liabilities

20

38,74747,992

Payables21

178,682

227,008

Accounts payable on insurance and reinsurance business

122,186

152,802

Trade and other accounts payable

56,496

74,206

Other liabilities

22579,994

480,847

Borrowings

14

-

336

Total

3,058,647

2,903,858

Total equity and liabilities

5,067,373

4,725,296

52

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

Consolidated income statement
Note
Insurance premium revenue

23

Insurance premium ceded to reinsurers

23

Net premium earned

2019

2018

1,759,523

1,648,527(685,288)(671,988)

1,074,235

976,539

Service and other income

24

252,497249,517

Share of income/ (losses) of associated companies

25(1,093)

4,652

Net income from investments

25

Total income after reinsurance

18,776

17,493

1,344,415

1,248,201

Insurance claims and loss adjustment expenses

26(892,311)(775,244)

Insurance claims and loss adjustment expenses recovered from reinsurers

26

370,095

282,938(522,216)(492,306)(479,103)(469,789)(1,001,319)(962,095)

343,096

286,106

Net insurance claims
Net operating expenses

27

Total expenses after reinsurance
Operating result before finance costs
Finance income
Finance expenses

28

Result for the year before tax
Income tax expense

29

Result for the year

2,629

5,858

(32,887)(14,599)

312,838

277,365(85,130)(74,710)

227,708

202,655

227,708

202,638

Attributable to:
Owners of the Company
Non-controlling interests-

17

Total result for the year

227,708

202,655

2019

2018

227,708

202,655

Consolidated statement of comprehensive income
Note
Result for the year
Other comprehensive income:Items that will not be reclassified to the income statement:
Effect of the asset ceiling on defined benefit pension plans

15.5

-

3,286

Actuarial gains/(losses) on defined benefit pension plans

15.5(21,023)(15,269)

4,829

4,909

75,516(47,569)--

11,723(7,201)

Income tax relating to items that may be reclassified(19,682)

11,248Other comprehensive income for the year, net of tax

51,363(50,596)

279,070

152,059

279,070

152,042

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

Total comprehensive income for the year

15.3

15.4

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

53

-

17

279,070

152,059

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

Consolidated statement of changes in equity
Attributable to the owners of the Company

Note

Share

Share

Revaluation

Currency

PensionRetained

capitalpremium

reservetranslation

reserveearnings

reserve

Total

reserve

Non-

Total

controlling

equityinterests

Balance at 1 January
2018
Acquisitions
Dividends

30

79,122

639,228

63,060(55,612)(137,323)

1,164,758

1,753,232

-

-

-

-

-

-

-

16

-

-

-

-

-

(83,869)(83,869)-

1,753,248(83,869)

Total
comprehensive
income for the year--

(37,552)(5,970)(7,074)

202,638

152,04217

152,059

Result for the year

-

-

-

-

-

202,638

202,63817

202,655

Other
comprehensive
income--(37,552)(5,970)(7,074)-(50,596)-(50,596)

79,122

639,228

25,508(61,582)(144,397)

1,283,527

1,821,405

33

1,821,438

79,122

639,228

25,508(61,582)(144,397)

1,283,527

1,821,405

33

1,821,438

-

-

-

-

-

33

33

(33)

-

-

-

-

-

-

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

income for the year--

56,411

11,146(16,194)

227,708

279,070-279,070

Result for the year

-

-

-

-

-

227,708

227,708-

227,708

Balance at 31
December 2018

Balance at 1 January
2019
Acquisitions
Dividends

30

Total
comprehensive

Other
comprehensive
incomeBalance at 31--

56,411

11,146(16,194)-

51,363-51,363

79,122

639,228

81,919(50,436)(160,591)

1,419,485

2,008,726-

2,008,726

December 201954

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

Consolidated statement of cash flows
Note

2019

2018

312,838

277,365(1,560)(157)

Dividends received from financial investments(9,431)(9,383)

Impairment loss

17,0795,347

I. Cash flows from operating activities
Result for the year before tax
Adjustments for:Realised capital (gains)/losses on investments

Share of income of associated companies

9

Depreciation, impairment and amortisation
Interest expense on subordinated debt

28

(7,126)(4,652)

68,46756,951

17,077

17,074

Net interest income(35,518)(38,975)

Other non-cash items

14,43010,410Changes in operational assets and liabilities:
Insurance contracts

18

86,35989,530

Reinsurance contracts

18(13,886)(11,829)

Deferred acquisition costs

12(4,557)(7,184)(42,896)

7,460

Accounts receivable and payable on insurance and reinsurance businessChanges in other assets and liabilities

19,08644,427Pensions and other long-term employee benefit net contributions(31,863)(34,444)

Cash generated from operations

388,500

401,940

Income tax paid

(98,605)(66,514)

Interest paid

(18,675)(18,780)

Net cash (used in)/generated by operating activities

271,220

316,646

-

-

-

-

II. Cash flows from investing activities
Investments and acquisitions (cash outflows):
Investment property
Investments in associated companies

9

Short-term investments
Financial investments available-for-sale

10

Property, plant and equipment and intangible assets(251,486)(235,035)(981,753)(484,342)(56,413)(55,830)

882

-

-

-

359,608

186,880

678,598

426,369

Divestments, redemptions and disposals (cash inflows):
Investment property
Investments in associated companies
Short-term investments
Financial investments available-for-sale

10

Financial investments fair value through profit or loss--

Property, plant and equipment and intangible assets

54

-

-

-

Net cash acquired in a business combination
Dividends received from associated companies

9

Dividends received from financial investments

9,431

9,383

Interest received

37,07841,489(204,001)(111,086)(91,782)(83,869)

Net cash (used in)/generated by investing activities
III. Cash flows from financing activities
Dividend paid

30

Interest paid on subordinated debt

(16,875)(16,888)

Net cash (used in)/generated by financing activities(108,657)(100,757)

Changes in cash and cash equivalents (I + II + III)(41,438)

104,803

446,021341,178(339)

40404,244446,021

Cash and cash equivalents at the beginning of the year

14

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).

55

All
All amounts
amounts inin thousands
thousands ofof Euro,Euro, unlessunless otherwise
otherwise statedstatedNotes 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 3,692 people as at 31 December 2019 (2018: 3,707). The parent is Grupo Compañía Española de Crédito y
Caución, S.L., which owns 64.23% (equal to 2018) 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 2018) 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 4 March
2020 and have been reviewed by the Supervisory Board. On 4 March 2020 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 2019 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 2019

The following relevant standards, amendments and interpretations have been adopted in 2019, but have had nomaterial effect on the consolidated financial statements unless otherwise mentioned:
IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of
Leases and requires lessees to account for all leases under a single on-balance sheet model similar to theaccounting for finance leases under IAS 17. At the commencement date of a lease, a lessee will recognise a liability
to make lease payments and an asset representing the right of use (“ROU”) of the underlying asset during the lease
term. Lessees will be required to separately recognise a depreciation expense on the right-of-use asset and an

56

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

-

interest expense on the lease liability, calculated against an incremental borrowing rate. The weighted averageincremental borrowing rate at transition was 2.7%. Lessor accounting under IFRS 16 is substantially unchanged
from accounting under IAS 17. Atradius has applied the modified retrospective implementation approach and assuch, the comparative information has not been restated. As per 1 January 2019 the group recognised ROU assets
and lease liabilities for its operating leases at an amount of EUR 102 million with no impact on equity.
In the transition to IFRS 16, i.e. the group has elected to use the following practical expedients permitted by thestandard.
The election not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, forcontracts entered into before the transition date the group relied on its assessment made applying IAS 17.
The option to exclude initial direct costs from the measurement of the ROU assets at the date of initial application.
The expedient to rely on the assessment of whether leases are onerous applying IAS 37 (Provisions, Contingent
Liabilities and Contingent Assets) at transition date.
The exemption options for short term- and low value leases.

For further information on the BS impacts generated by IFRS 16 please see note 7 and 22.
A reconciliation of the operating lease commitments at December 31, 2018, disclosed in the 2018 financial statements,
to the lease liabilities recognised in the statement of financial position at January 1, 2019 is provided below:
December31, 2018

-

-

-

-

-

Operating lease commitments as disclosed

109,119-

Impact discounting using the incremental borrowing rate

(9,300)

Impact short term/low value leases recognised on a straight line basis as expense(1,105)

Impact other, mainly components of contracts reassessed as service agreements

2,824-

Lease liability recognised as at January 1, 2019

101,538

Amendment to IAS 19 Employee benefits, on Plan amendment, curtailment or settlement (effective 1 January2019) specifies how companies determine pension expenses when changes to a defined benefit pension plan
occur. This amendment has not had a material impact on the consolidated financial statements.
Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures (effective 1 January 2019). These
amendments clarify that entities apply IFRS 9 Financial Instruments to long-term interests in an associate or joint
venture to which the equity method is not applied. Atradius applies the equity method and therefore theseamendments has not have a material impact on the consolidated financial statements.
Amendments to IFRS 9: Prepayment features with negative compensation (effective 1 January 2019). The
amendments clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance thatcauses the early termination of the contract and irrespective of which party pays or received reasonable
compensation for the early termination of the contract. The amendments have not have a material impact on thefinancial statements.
Annual improvements cycle 2015-2017 (effective 1 January 2019). The cycle introduces limited amendments tothe following standards: IFRS 3 Business combinations, IFRS 11 Joint arrangements, IAS 12 Income taxes and IAS
23 Borrowing costs. The amendments has not have a material impact on the consolidated financial statements.
IFRIC 23 Uncertainty over Income Tax Treatments (effective 1 January 2019). The interpretation provides
guidelines on the determination of accounting for uncertain tax events. The interpretation has not have a 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 2019and 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.

57

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

-

-

-

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 2022. 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 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. It is expected that theseamendments will not have a material impact on the consolidated financial statements.
Amendments to IFRS 9, IAS 39 and IFRS 7 relating to the Interest Rate Benchmark Reform (effective
1 January 2020). The amendments provide temporary relief for hedge relationships and its accounting during the
replacement process of benchmark interest rates (phase 1) and thereafter address issues once the existing interest
rates have been replaced. In the absence of any (significant) hedge relationships it is expected that theseamendments will not have a material impact on the consolidated financial statements.

The European Union have not yet endorsed the following relevant standards and amendments and as such have notbeen adopted by Atradius:-

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. It is expected that this standard will not have a material
impact on the consolidated financial statements.

-

IFRS 17 Insurance contracts (effective 1 January 2022). In November 2018, the IASB agreed to start the process toamend IFRS 17 to defer the mandatory effective date of IFRS 17 by one year (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 orafter January 1, 2022. 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
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.

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.

58

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

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)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.
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 are59All amounts in thousands of Euro, unless otherwise stated
All amounts in thousands of Euro, unless otherwise statedrecognised, 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 recognized at cost, which includes positive goodwill arising on acquisition.
Negative goodwill is recognized in the income statement on the acquisition date. If associates are obtained insuccessive share purchases, 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.

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 thetransaction dates, in which case income and expenses are translated at exchange rates at the dates of the60

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

-

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 2019

1.175

0.890

0.625

1.173

0.911

0.616

At 31 December 2018

1.118

0.873

0.617

1.123

0.880

0.642

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. Software developed for strategic business developments can in some case be amortised in 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.

61

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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.
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.

2.7.2

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 ROU asset and a lease liability are recognised at the commencement date of the lease. The ROU asset is initiallymeasured 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 has not been restated. 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

62

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedassociated 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.

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 by independent real estate valuators
registered in the relevant countries and who have appropriate qualifications and experience in the valuation ofproperties.
See Note 4.3.1.1 for further details regarding the determination of the fair value of financial investments.

63

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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.

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.

64

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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 andequity 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 the65All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

asset (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.

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:66

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated-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 pensions 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.

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.

67

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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.
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.

68All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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.

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

69

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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 ofcontributions 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

70

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedvoluntary 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.

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,71All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

--

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.
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.

72All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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; andfinancing activities are activities that result in changes in the size and composition of the contributed equity andborrowings of Atradius.

73

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

3 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 is estimated as the part of insurance premium earned but not yet invoiced at the end of thereporting period. Although the calculation of the pipeline premium is derived from the core business systems andcalculated at policy level, considering all policy specific features that might impact the assessment, the calculation
does involve the use of management estimates. The main reason is that premiums for risks taken on depend on theamount of business insured during the reporting period, whereas at the end of the reporting period not all businesshas been declared yet. A secondary reason is that for part of the policies the final premium depends on claims related
to the policy. As the final performance of the policy is not known at reporting date, this also means that part of thepipeline premiums result from estimates. The assumptions are based on recent trends in insured business, client
specific information, knowledge of pending claims, and when relevant, macro-economic information.
Additional information is disclosed in Note 13.

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 3.1 million loss before tax (2018: EUR 10.4 million loss), being the transfer of the total revaluation
reserve for unrealised losses on equity financial investments to the income statement.

74

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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% - 3%
and the specific discount rate.
The projection period is 10 years, where the first 1-5 year projections are based on financial budgets and/or forecasts.
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.

75

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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.
Atradius’ current activities will continue without interruption post Brexit. Atradius is prepared for the regulatorychanges triggered by Brexit and with branches across the EEA and in the UK, is well placed to continue to issue
policies in all EU27 countries and in the UK.

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. Through76

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

its 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 in sight 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 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, 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
problems, 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 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. Almost 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 the policy. 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 the77All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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 forcover on a country or withdraw cover on a country altogether. These are important tools in 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 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.
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.
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.

78

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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 61% credit insurance and 39% 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 instalment credit protection.

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.
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 non-tacit
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.

79Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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 2018, Atradius decided to renew its reinsurance arrangements for 2019.This trend continued with therenewal of the reinsurance arrangements for 2020 in early 2019. On renewal, Atradius assesses the optimal structureof the treaties for the forthcoming period, including excess of loss, stop-loss and facultative treaties. A number of items
are taken into consideration during this review, including the forecast growth in the underlying business, economic
developments etc. In addition, the proposed structure is considered in the context of the Solvency II capitalrequirements and Atradius’ SCR appetite.
For the underwriting year 2019 one quota share reinsurance treaty is in place covering the majority of Atradius’
business. The retention under this treaty is 62% (2018; 60%).
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 the assumed and direct business of Atradius. The top of the excess of loss layers is chosen so that, in thejudgement of management, 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 underthe quota share treaties and excess of loss structure for any buyer group does not exceed EUR 25 million for Atradius.
Atradius Reinsurance DAC has also purchased additional lower level protection.
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.

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 2019 and 2018 in 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 on
any 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.
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.

80Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

The following tables, show aggregated TPE for credit insurance (including special products and assumed reinsurance.
Buyer country

TPE 2019(EUR million)%

TPE 2018(EUR million)%

Spain, Portugal

98,73914.7%

99,453

15.2%

Germany

93,024

13.8%

90,59913.9%Central and Eastern Europe

68,595

10.2%

63,935

9.8%

USA60,6029.0%

50,556

7.7%

France48,4077.2%

47,119

7.2%

United Kingdom

46,2196.9%

44,989

6.9%

Italy

43,661

6.5%

44,263

6.8%

Nordic31,748

4.7%

28,072

4.3%

The Netherlands

30,392

4.5%

29,650

4.5%

Other

151,132

22.5%

154,768

23.7%

Total

672,520100%

653,404100%

TPE 2019(EUR million)%

TPE 2018(EUR million)%

Chemicals

87,46613.0%

86,479

13.2%

Electronics

82,85812.3%

77,433

12%

Consumer durables

73,145

10.9%

69,881

11%

Metals72,285

10.7%

68,424

10.5%

Food

64,587

9.6%

63,001

9.6%

Transport

61,1289.1%

60,461

9.3%

Construction

51,495

7.7%

49,773

7.6%

Machines

41,225

6.1%

39,972

6%

Agriculture

33,9545.0%

33,876

5.2%

Construction materials

29,3894.4%

28,3604.3%

Services

27,1094.0%

27,837

4.3%

Other

47,881

7.1%

47,907

7.3%

Total

672,520100%

653,404

100%

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

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. For instance, assuming real outstanding exposure of 20% of TPE, then only buyers
with TPE in excess of around EUR 125 million could give rise to claim under an excess of loss treaty (equal to 2018).
TPE Value band

TPE 2019(EUR million)%(EUR million)

0 - 20357,231

20 - 100
100 - 250

TPE 2018%(EUR million)
53.1%

349,910

116,550

17.3%

113,52817.4%

68,958

10.3%

70,575

10.8%

250 - 500

53,3597.9%48,405

7.4%

500 - 1000

39,402

5.9%

37,1755.7%1000 - and more

37,021

5.5%

33,811

5.2%

672,520100%

653,404

100%

Total

81

53.6%

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

Exposure for bonding and for instalment credit protection has different characteristics and therefore not included inthese tables. The bonding exposure is EUR 25 billion (2018: EUR 24 billion). Exposure for instalment credit protection
amounts to EUR 3 billion (2018: EUR 2.6 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 status of the economy is a major driver of the frequency and severity of claims. Its effect may varyby country 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.
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. IBNR
is Atradius’ estimate for future claims payments that will result from risks taken on, but for which no claims
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 havestarted, in the sense that the underlying insured shipment has taken place. IBNR is the local business in Spain andPortugal’s estimate for future claims payments that will result from risks taken on, for which no claims
notification has been received and for which the underlying invoices are overdue at the end of 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

82

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedpayments 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 a payment;
the expected number of claims for risks taken on during the most recent months since very few claims will havebeen 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 complex and 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.
The most important assumption used in the main method for reserving for traditional credit insurance to set theestimate for the ultimate number of claims for the most recent months of shipment is that the claims inflow in early2020 will be around 20% above the level of end 2019. An indication of the sensitivity to projected ultimate number ofclaims would be the following: if the estimated ultimate number of claims for the most recent six months of risk wereto change by 10%, the claims provisions would change by EUR 27 million, gross of reinsurance (2018: EUR 25 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 claims size.
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.
Atradius is regularly reviewing how the Brexit might affect the defaults in the UK buyer portfolio. The impact onprovisions has been assessed by identifying a section of the UK buyer portfolio considered at a significantly increased
risk. To the exposure of this portfolio, stressed versions of the company’s probabilities of default and loss given default(parameters used in Atradius’ Internal Model) were applied. In addition, a margin of uncertainty has been added toreflect the possibility of buyers outside the UK being affected. This Brexit scenario resulted in an additional provisions
being set of EUR 29 million (2018: EUR 38 million).
Claims provisions are presented net of recoveries from salvage and subrogation. Realised recoveries can deviate fromexpected recoveries. Expected recoveries amount to EUR 429 million (2018: EUR 409 million). The largest twocomponents of the expected recoveries are the recoveries for standard credit insurance of EUR 193 million (2018: EUR
186 million), and for instalment credit protection of EUR 149 million (2018: EUR 142 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.

83All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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,
decrease or increase 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 are sensitive to movements in thoseprices. 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 fromthe credit assessment institutions and interest rate duration.
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).

84

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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.
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
Assets2019

2018

370,138

241,720

Government bonds

562,622563,834

Corporate bonds

1,504,007

1,267,474

2,436,767

2,073,028

Available-for-sale:
Equity securities
Debt securities:

Total

The Company has at 31 December 2019 and respectively 31 December 2018 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 minimize 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 out of EUR denominated large capitalisation equities. Per the end of December 2019, themarket value of these equities is EUR 137.1 million (2018: EUR 78.5 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.
Equity instruments issued by investment funds
The portfolio of equity instruments issued by investment funds are shown in the following table:

85All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

EUR million

Weight in % EUR million

Weight in %

2019

2018

Passive equities exchange traded funds

199,17385.5%

161,184

98.8%

Active money market funds

16,700

7.2%

2,008

1.2%

Real Estate funds
Total

17,097

7.3%

-

0.0%

232,970

100.0%

163,192

100.0%

Passive equities exchange traded funds
The portfolio of passive equities exchange traded funds mainly consists of 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 fund denominated in Brazilian real and one
money market fund denominated in GBP.
Real estate funds
The portfolio of real estate funds consists of 2 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 amountcarrying amount

2019

2018

2019

2018

Financial assets (1) (3)2,066,629

1,831,308

556,642702,277

Financial liabilities(323,982)(323,790)(43,529)(42,347)

1,742,647

1,507,518

513,113659,930

Total(2) (4)

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.
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 can be described as thepercentage change of a bond’s value when the underlying discount rate is parallel shifted by 100 basis points or 1.00%.
and is calculated as the weighted average of the discounted future cash flows to be received measured in years. The
duration for 2019 is (value at the end-of-2019) 2.3 years (2018: 2.0 years) and the average maturity for 2019 is 2.4
years (2018: 2.2 years).

86All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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 them 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

2019

EUR million% of themarket value

2018

Equity securities:
Shares (including funds)

119.6

33.8%

84.6

35.3%

Government bonds

9.5

1.7%

17.0

3.0%

Corporate bonds

24.1

1.6%

17.7

1.4%

124.9

4.8%

95.9

4.1%

Debt securities:

Structured debt
Total portfolio

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 that carryadditional credit risk above the risks that government bonds bring along. When individual securities are classified to theasset class that fits their actual risk profile, the volatility of that asset class is calculated using the volatility to the financial
markets of the underlying securities in that asset class. The volatility of each asset class as a whole serves as input for the
VaR calculation of that asset class. In case of an investment fund, the volatility of the fund (driven by the characteristics of
its underlying securities) serves as input for the calculation of the VaR on that specific investment fund and is subsequently
included in the VaR calculation of the asset class. Total portfolio VaR is less than the sum of the VaR of the individual
portfolio components because the correlation between these components is less than one and forms the basis of portfolio
diversification. The VaR percentage increased from 4.1% at the end of 2018 to 4.8% at the end of 2019 and the VaR value
increased from EUR 95.9 million at the end of 2018 to EUR 124.9 million at the end of 2019.

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 2019, the Euro weakened against most of the non-Eurofunctional currencies (see Note 2.5.3) resulting in a foreign currency gain in other comprehensive income of EUR 11
million, net of tax (2018: a loss of EUR 6 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.

87All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

Atradius exposure to foreign currency exchange rate risk, arising from monetary financial assets and liabilities
denominated in non-functional currencies as at 31 December 2019 and 31 December 2018, is presented in thefollowing table, in EUR:

FinancialassetsFinancialliabilities

Net position

Financialassets2019
EUR

237,983

Financialliabilities

Net position

2018

228,290

9,694

165,638

153,919

11,719GBP

14,35322,380(8,028)24,21725,559(1,342)

USD

347,882309,017

38,865

307,310

260,599

46,711

AUD

6,921

8,839

(1,918)

8,644

8,610

34

Other

117,619

213,144(95,525)

143,022

236,587(93,565)

Total
Sensitivity analysis

724,758

781,670(56,912)648,831685,274(36,443)

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 2018. 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

Assets2019

Liabilities

Net position

2018

EUR

3,708,155

2,060,116

1,648,039

3,487,135

2,000,708

1,486,427

GBP

214,218

134,698

79,521

163,861

112,692

51,169USD

479,557

312,857

166,700

432,628

296,766

135,862

AUD

96,97051,67345,29785,82342,73043,093

Other

568,472

499,304

69,169555,849

450,962

104,887

Total

5,067,373

3,058,647

2,008,726

4,725,296

2,903,858

1,821,438

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.

88Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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 to a minimum rating of BBB- atpurchase. 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.
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 2019 and as at 31 December
2018, are presented in the following tables:

At 31 December 2019

AAA

AA

A

BBB

Other andNon-rated

Total

Receivables, claims, commissions and deposits
arising from reinsurance:
Receivables, claims and commissions arisingfrom 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

39

14

40

35

-

128

-

32

302

52

19

405

Total

310

643

1,497

537

82

3,068

At 31 December 2018

AAA

AA

A

BBB

Other andNon-rated

Total

Receivables, claims, commissions and deposits
arising from reinsurance:
Receivables, claims and commissions arisingfrom reinsurance

-

209

245

1

23

478

Deposits received from reinsurers

-

(22)

(18)

-

(2)

(42)

Government bonds

255

227

57

8

17

564

Corporate bonds

14

171

1,002

79

1

1,267

Deposits withheld by ceding companies

-

7

8

4

7

26

Bank deposits under short-term investments

28

7

135

61

-

230

(EUR million)

Debt securities:

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

Debt securities:

Short-term investments:

Cash and cash equivalents
Total

(1)

-

34

343

51

19

447

297

633

1,772

203

65

2,969

89

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

The counterparty credit ratings and the credit rating of the 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 2019 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(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
2019, 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)
31-Dec-19

01-Jan-19

Debt securities:(Government bonds + Corporate bonds+ Structured debt)

2,067

1,831

236

SPPI

2,061

1,826

235

Other

5

5

-

370

242

128

SPPI

-

-

-

Other

370

242

128

Short-term investments:

152

256

(104)

SPPI

152

256

(104)

Other

-

-

-

Cash and cash equivalents

404

446

(42)

SPPI

404

446

(42)

Other

-

-

-

Total

2,993

2,775

218

Equity securities:

The credit ratings of the financial assets passing the SPPI test (Debt securities, Bank deposits under short-term
investments and cash and cash equivalents) which are above investment grade (rated BB or above) 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 2019.
For information on credit exposure for ‘Other accounts receivables’, please refer to note 11.

90

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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 (2018: 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.
Liquidity 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.

91

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

At 31 December 2019

Contractual cash flows (undiscounted)
Weighted
averageeffective
interest
rate %

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountInterest bearing liabilities
Subordinated 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

1,155,589

535,943(9,882)

1,706,229

Total
Non-interest bearing liabilities
Insurance contracts
Payables-178,682--

178,682

Total-

1,334,271

535,943(9,882)

1,884,911

At 31 December 2018

Contractual cash flows (undiscounted)
Weighted
averageeffective
interest
rate %

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountInterest bearing liabilities
Subordinated note

5.35%

--

13,12552,500259,529

248,790

Subordinated loan

5.00%

--

3,750

79,870-75,000Bankoverdraft

0.00%

336

--

--

--

336

Deposits received fromreinsurers

0.30%

-

42,011--42,011336

58,886132,370259,529

366,137

Insurance contracts-

1,096,725

498,825(114)

1,619,869

Payables-

227,008--

227,008

Total-

1,323,733

498,825(114)

1,846,877

Total
Non-interest bearing liabilities

92All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

At 31 December 2019

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

0.21%

--

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-

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

At 31 December 2018

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

0.46%

- --

387,9431,436,020

37,2591,831,308

0.12%

75,808180,252--

255,894

Cash: Cash and bank deposits(0.14%)

441,352

5,005

-

-

446,357

517,160

573,200

1,436,020

37,2592,533,559-

241,746--

241,746

410,878

186,880(42)

597,716

Interest bearing assets

Total
Non-interest bearing assets
Other financial assets
Reinsurance contracts
Receivables-

237,071--

237,071

Total-

889,695

186,880(42)

1,076,533

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 Management (ORM) 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 ORM 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.

93

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

The ORM 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 ORM 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 ORM 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 Solvency II purposes; the resulting ‘in control’ sign-off process is overseen by acommittee 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.

4.4.1.3

Compliance

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.
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 addresses potential risks in areas such as sanctions regulations
while the Policy on Insurance Distribution outlines the Atradius rules and guidelines for compliance with the EU
Insurance Distribution Directive.
The Compliance Function supports the management of Atradius in meeting its objective of being compliant withapplicable laws, rules and external and internal regulations. The Compliance Function within Atradius is headed by
the Group Compliance Manager and consists of the Group Compliance Function – responsible for the maintenance andoverall effectiveness of the compliance framework- and, the Local Compliance Function–, which monitors regulatory
and compliance developments at local country level.

94Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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
Atradius manages capital worth more than two billion euro. Per year-end 2019, the capital includes shareholders’funds of EUR 2.0 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 to ensure capital
adequacy. The Company operates with a solvency ratio ambitions with the aim to maintain a A rating and an
additional buffer to ensure rating capital in an adverse scenario.
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.

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.

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 2019, the capital of Atradius has been managed according to the Atradius guidelines and in close cooperation withthe units involved in managing the different factors related to capital. The Atradius entities were able to meet theirfinancial 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.

95

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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 2019 the eligible own funds under SII for the Company amounts to EUR 2,277 million (2018: EUR
2,059 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:96All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

Business segment

CreditBonding

Reinsurance

insurance

Inter-

Group

insurance

Total

Servicessegment

costs

business

elimination

Total

2019
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)--1,633,118

122,687

140,218

1,896,023

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

reinsurers(608,553)(50,892)(25,843)(685,288)---(685,288)

Total segment income after

1,024,56
5

71,795

114,375

1,210,735

119,387(3,390)-1,326,732(772,192)(47,271)(75,426)(894,889)

-

2,578

-

(892,311)

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)(116,386)

813(7,601)(795,600)

business 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)

325,413Inter-segment revenue
Total revenue
Insurance premium ceded toreinsurance
Insurance claims and loss
adjustment expenses
Insurance claims and loss
adjustment expenses

Commission received for

Share of income/ (losses) of
associated companies(1,093)

Net income from investments

18,776

Finance income

2,629

Finance expenses(32,887)

Result for the year before tax

312,838

Income tax expense(85,130)

Result for the year

227,708

Business segment

CreditBonding

Reinsurance

insurance

Total

Services

Inter-

insurance

segment

business

eliminati

Total

on
2019
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

-

-

-

-

-

-

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

387,3849--

1,706,229

Payables142,332

33,240778

176,350

18,363(16,030)

178,682

-

-

-

-

-

-

1,173,736

1,133,135

361,282

388,162918,363(16,030)

3,058,647

2,708

149

28

2,884

646

-

3,530

Unallocated assets

1,706,22

Unallocated liabilities

1,882,57
Total liabilities
Total year end number of employees(full-time equivalent)97Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

Business segment

CreditBonding

Reinsurance

insurance

Inter-

Group

insurance

Total

Servicessegment

costs

business

elimination

Total

2018
Insurance premium revenue

1,397,309

119,854

131,364

1,648,527---

1,648,527

Service and other income

132,511--

132,511

117,006--

249,517

-

-

-

-

3,742

(3,742)--

1,529,820

119,854

131,364

1,781,038

120,748(3,742)-

1,898,044(594,218)(52,400)(25,370)(671,988)---(671,988)

935,60267,454

105,994

1,109,050

120,748(3,742)-

1,226,056(680,354)(25,607)(72,376)(778,337)

-

3,093

-

(775,244)

recovered from reinsurers

254,318

11,70816,912282,938---

282,938

Net insurance claims(426,036)(13,899)(55,464)(495,399)

-

3,093

-

(492,306)

(1)

649

(8,123)(753,207)

Inter-segment revenue
Total revenue
Insurance premium ceded toreinsurers
Total segment income after
reinsurance
Insurance claims and loss
adjustment expenses
Insurance claims and loss
adjustment expenses

Gross operating expenses(530,082)(42,679)(51,526)(624,287) (121,446)

business ceded to reinsurers

259,791

19,475

4,152

283,418---

283,418

Net operating expenses(270,291)(23,204)(47,374)(340,869)(121,446)

649(8,123)(469,789)

Operating segment result

239,275

30,351

3,156

272,782(698)-(8,123)263,961

Commission received for

Share of income/ (losses) of
associated companies

4,652

Net income from investments

17,493Finance income

5,858

Finance expenses(14,599)

Result for the year before tax

277,365

Income tax expense(74,710)

Result for the year

202,655(1)

Gross Operating Expenses Service Segment: includes EUR 4.3 million from Trade name amortisation (not considered for management reporting purposes).

Business segment

CreditBonding

Reinsurance

insurance

Total

Services

Inter-

insurance

segment

business

elimination

Total

2018
Reinsurance contracts

397,473

151,591

48,652597,716--

597,716

Receivables

205,215

23,314

4,978

233,507

6,745(3,181)

237,071

-

-

-

-

-

-

3,890,509

Total assets

602,688

174,905

53,630831,223

6,745(3,181)

4,725,296

Insurance contracts

944,516

292,785

382,568

1,619,869--

1,619,869

Payables

188,204

38,889334

227,427

18,943(19,362)

227,008

-

-

-

-

-

-

1,056,981

1,132,720

331,674

382,902

1,847,296

18,943(19,362)

2,903,858

2,703

150

28

2,881

664

-

3,545

Unallocated assets

Unallocated liabilities
Total liabilities
Total year end number of
employees (full-time equivalent)98Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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 61% credit insurance contracts andapproximately 39% bonding (2018: 58% and 42% respectively), based on premium volume.

99

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

6

Intangible assets

2019

Goodwill

Software

Other 1)Total

At cost at 1 January

151,284

258,984

30,440440,708

Additions146

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

At cost at 31 December
Accumulated amortisation and impairments at 1 January
Amortisation charge for the year
Disposals

-

6,216

-

6,216

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

+
+ +

++

++

++

2018

Goodwill

Software

Other 1)Total

At cost at 1 January

151,292

218,831

30,342400,465

Additions-45,63750

45,687

Disposals-(4,667)-(4,667)

Effect of movements in foreign exchange rates

(8)

(817)

48

(777)

151,284

258,984

30,440440,708(736)(142,984)(20,326)(164,046)

Amortisation charge for the year-

(17,200)(5,484)(22,684)

Disposals
Impairment

-

4,181
(5,347)-

4,181(5,347)(736)

533(160,817)(48)(25,858)

485(187,411)

150,556
150,548

75,847
98,167

10,016
4,582

236,419
253,297

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

Effect of movements in foreign exchange rates
Accumulated amortisation and impairments at 31 December
Balance at 1 January
Balance at 31 December

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

Goodwill
If applicable, impairment of goodwill is recognised as a separate item in the income statement. 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 10 million). In 2018 there was no impairment charge.

100Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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

2019

2018

ACyC 1)

98,797

98,797

Graydon Holding N.V.

20,93130,931

Atradius Trade Credit Insurance Inc.

4,750

4,750

Atradius Collections B.V.

6,426

6,426

ACyC. (France)

2,767

2,767

ACyC (Nordic bonding)

2,568

2,563

Other

4,450

4,314

Total

140,689

150,5482)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 discount 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-cycle performance, where
the first 1-5 year projections are based on financial budgets and/or forecasts. 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 6.4% and 7.6% and the growth rate
between 1% and 2%. The terminal value is calculated based on the dividend flows of the normalised period through aperpetuity which applies a long-term growth rate of 1%-2% (2018: 1%) and the specific discount rate. Any profits, after
fulfilling minimum capital requirements, are assumed to be distributable dividends. Minimum capital requirements
are calculated based on the Solvency II Partial Internal Model and minimum shareholders equity required (nondistributable).
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 goodwills by the percentages
shown below (Other CGU are not included due to immaterial impacts):

Discount rate

Cash-Generating Units

-50bp
ACyC

7.1%

Graydon Holding
Atradius Trade Credit Insurance Inc.

Growth rate Combined ratio (1)
-50bp

-50bp

(1.1%)

3.6%

9.2%(5.9%)(12.0%)

7.0%(5.8%)

2.8%

Atradius Collections B.V.

34.2%

(20.2%)

0.0%

ACyC (France)

24.8%(15.5%)

5.7%

ACyC (Nordic bonding)

12.0%(7.9%)

4.2%(1)

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

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 7.1 million (2018 EUR 5.3 million) of self-developed software
since it did not satisfy all set requirements. During 2019 Atradius has capitalised EUR 42.5 million mainly due to
Atradius Business Transformation project (ABT) (2018: EUR 38.1 million).

101

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

7

Property, plant and equipment & investment property

2019

Land &
buildings

Fixtures &fittings

IT hardware

Right of Use
assetsTotalproperty,plant &
equipment

Investment
property

At cost at 1 JanuaryFirst time adoption as per 1st
January 2019

111,608

63,65652,826-228,090

14,609---101,692

101,692-

Additions

-

4,653

3,374

5,694

13,721-

Disposals-(3,504)(1,661)(689)(5,854)(1,135)(4,685)---(4,685)

4,685

87

679

1,002

1,154

2,922

36

At cost at 31 December

107,01065,48455,541

107,851

335,886

18,195

Accumulated depreciation andimpairments at 1 January(12,506)(42,989)(40,278)-(95,773)(4,968)Depreciation charge for the year

(1,115)(4,399)(5,486)(22,698)(33,699)

(134)

-

3,506

1,651

176

5,333

457

69

-

-

-

69

42

(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

10,72985,216210,051

13,988

Reclassification
Effect of movements in foreignexchange rates

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

102All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

2018

Land &
buildings

Fixtures &fittings

IT hardware

At cost at 1 January

Right of Use
assetsTotalproperty,plant &
equipment

Investment
property

112,11260,93051,481-

224,523

14,581

Additions

-

4,118

6,024

-

10,143-

Disposals(566)(1,261)(4,439)-(6,265)-

Reclassification
Effect of movements inforeign exchange rates

-

(9)

2

-

(8)

-

62

(122)

(242)

-

(303)

28

At cost at 31 December

111,608

63,65652,826-228,090

14,609(11,540)(40,308)(39,230)-(91,078)(4,893)(1,102)(4,054)(5,554)-(10,710)(118)

Disposals

49

1,261

4,358

-

5,668

-

Impairment loss

95

-

-

-

95

45

-

9

-

-

9

-

Accumulated depreciationand impairments at 1 January
Depreciation charge for theyear

Reclassification
Effect of movements inforeign exchange rates
Accumulated depreciationand impairments at 31
December

(8)

103

148

-

243

(2)

(12,506)(42,989)(40,278)-(95,773)(4,968)

Balance at 1 January

100,572

20,622

12,251-

133,445

9,688

Balance at 31 December

99,102

20,667

12,548-132,317

9,641

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

2019

2018

2019

2018

Spain and Portugal

89,024

92,634

12,713

9,104

Italy

21,02020,620681

675

Mexico

4,463

3,927

1,488

1,309

-

-

-

475

Other

1,001

998

-

-

Total

115,507

118,179

14,882

11,563

The Netherlands

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 2018). Valuation techniques used are: Market (comparison) approach, Income
approach (discounted cash flow method) and Cost approach. Significant valuation inputs used to determine the fairvalue measurements based on techniques used are construction features, location (and/or conditions) and transportutilities.

103

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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: 90% office (2018: 89%) and 10% retail (2018: 11%).
Direct operating expenses incurred (including repairs and maintenance) arising from investment property are EUR 77
thousand (2018: EUR 400 thousand). During the year an amount of EUR 607 thousand (2018: EUR 735 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 557 thousand for
non-cancellable contracts (In 2018, expected rental income for next year was 593 thousand for non-cancellable
contracts).
Leases: Right of Use Assets
Right of Use assets consist of office space (90%), 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:
2019
Lease liability included in statement of financial position at 31 December

85,038Amounts recognised in income statement :Interest expenses on lease liabilities(2,552)

Expenses relating to short-term leases(118)

Expenses relating to low-value assets(17)

Amounts recognised in the statement of cash flows :Total cash outflow for leases

16,094104

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated8

Subsidiaries

The following table sets forth, as at 31 December 2019 and 2018, 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

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.

The Netherlands

100%

Holding

Atradius Participations Holding B.V.

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

Atradius Collections B.V.
Atradius Crédito y Caución S.A. de Seguros y Reaseguros

Graydon Holding N.V.

9

Investments in associated companies
2019

2018

63,42863,538--

Share of income of associated companies

7,126

4,652

Dividends received
Impairment of associated companies
Revaluations
Effect of movements in foreign exchange rates(631)(8,219)
1,166
240

(968)
(213)
(3,581)

Balance at 31 December

63,11063,428

Balance at 1 January
AdditionsNone of the associated companies are listed. All information from the associated companies, unless otherwise stated,
is based on balance sheet dates between 30 September 2019 and 31 December 2019.
Atradius assessed the goodwill for impairment of associated companies. Based on this assessment Atradius decided to
fully impair the goodwill (EUR 6.9 million) of Credit Guarantee Insurance Corporation of Africa Limited since the longterm economic outlook of South Africa deteriorated compared to this outlook at acquisition date and the uncertainties
remain.
Atradius has entered into negotiation to sell The Lebanese Credit Insurer s.a.l.. The net carrying amount has
accordingly been reduced to fair value.

105

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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
South Africa% interest
held
25.00%

Type of business

Israel20.00%

Credit insurance

Chile

50.00% (1)Credit insurance

48.90%

Credit insurance

Lebanon(1) Minus one share106

Credit insuranceAtradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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

2019

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

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)

(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

6,927

380

1,611

-

-

8,918

Net assets

14,991

11,34026,9971,182-

54,510Carrying amount
Share of income of associatedcompanies

21,918

11,72028,6081,182-

63,428

1,454

1,390

2,154

(346)

-

4,652

(253)

-

(715)

-

-

(968)

Goodwill

Dividends received(8,219)

Associated companies

2018
Atradius 's interest

Dividends received
Associated companies
Assets120,944

85,363

121,2139,445-

336,965

Liabilities

60,97728,66362,1397,027-

158,806

Revenue

53,781

13,070

9,793

2,742

-

79,386

Net assets

59,96756,70059,074

2,418-

178,159

Result for the year

5,814

6,951

4,309

(708)

-

16,366(1)Figures for Compañía de Seguros de Crédito Continental S.A. are related to non-consolidated statements.

107All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

10 Financial investments
Financial investments classified
by measurement category andnatureAvailable-for-sale
2019

2018

2019

2018

2019

2018

Equity securities

370,138

241,720--

370,138

241,720

Debt securities

2,066,629

1,831,308--

2,066,629

1,831,308

Loans

-

-

8

26

8

26

Short-term investments--

131,442

205,514

131,442

205,514

Cash held for investments--

20,94850,38020,94850,3802,436,767

2,073,028

152,398

255,920

2,589,165

2,328,948

Total

Loans and receivables (1)Total(1) There are no bank deposits tacitly renewable in 2019 and 2018.

Movements in available-for-salefinancial investments

Equity securities

Debt securities

Total

2019

2018

2019

2018

2019

2018

Balance at 1 January

241,720

293,976

1,831,308

1,788,607

2,073,028

2,082,583

Additions

78,333

7,930

903,420

476,412

981,753484,342

Disposals(12,225)(20,375)(666,373)(405,994)(678,598)(426,369)--(21,448)(23,304)(21,448)(23,304)

61,993(39,954)

12,089(7,756)74,082(47,710)

317

143

7,633

3,343

7,950

3,486

370,138

241,720

2,066,629

1,831,308

2,436,767

2,073,028

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

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

11 Receivables
2019

2018

Accounts receivable on insurance and reinsurance business

192,782

180,503

Amounts owed by policyholders and direct insurance operations

137,038

130,031

Receivables arising out of reinsurance

55,74450,472Other account receivable

46,78356,568

Total

239,565

237,071

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 108.9 million (2018: EUR 77.7 million) relates to past due receivables on insurance and reinsurance
business for which no impairment loss has been recognised, 93.1% (2018: 91.9%) relates to receivables ageing less than
three months.
All receivables are considered for impairment testing. As of 31 December 2019, receivables of EUR 27.5 million (2018:
EUR 24.9 million) were considered to be partially impaired. The amount of the impairment taken related to these108

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedreceivables was EUR 13.2 million (2018: EUR 12.8 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 2019 is EUR 2.7 million (2018: EUR 3.3 million)
Movements on the provision for impaired receivables are presented in the following table:

2019

2018

Balance at 1 January

12,743

14,693

Impairment of receivables

7,825

3,057

Receivables written off during the year as uncollectable(6,402)(4,710)

Unused amounts reversed

(948)

(297)

Balance at 31 December

13,21812,743The 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
2019

2018

Balance at 1 January

71,74369,441

Deferred in the year

27,241

27,945

Amortisation change for the year

(23,540)(26,817)

856

1,174

Balance at 31 December

76,30071,743Current
Non-current

44,40031,90042,03829,7052019

2018

Pipeline and return premium ceded

404,028

389,275

Prepayments and accrued interest

33,63236,009Net pension plan asset

53,39338,440Reimbursement rights

9,725

13,525

Effect of movements in foreign exchange rates

13 Other assets and accruals

Other

24,363

21,323

Total

525,143

498,572

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.
The other assets and accruals are substantially all current and consequently the fair values of these assets do notmaterially differ from their carrying amounts.

109

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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 2019 is EUR 53.3
million ( 2018: EUR 38.4 million) (see Note 17).

14 Cash and cash equivalents
2019

2018

Cash at bank and on hand399,308441,353

Short-term bank deposits

4,936

5,004

Cash and cash equivalents

404,244446,357

Cash and cash equivalents

404,244446,357-(336)

404,244446,021

Borrowings
Cash and cash equivalents in the statement of cash flows

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. Therefore, in thestatement of financial position, the related bank overdrafts that do not qualify for offsetting are presented separately
as liabilities under borrowings.

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 (2018: the same) of which 79,122,142 ordinary shares were issued and fully
paid (2018: 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 2019 were of EUR 2.9 per share.

15.2

Share premium reserve
2019

2018

Balance at 1 January639,228

639,228

Balance at 31 December

639,228

639,228110

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

15.3

Revaluation reserve
2019

2018

Balance at 1 January

25,50863,060Change in revaluation reserve - gross

76,872(47,367)

Change in revaluation reserve - tax(19,432)

10,039Net (gains)/losses transferred to net profit on disposal - gross(1,356)(202)

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

327

(22)

81,91925,50820192018

Balance at 1 January(61,582)(55,612)

Change in currency translation reserve - gross

11,723(7,201)

Change in currency translation reserve - tax

(577)

1,231

(50,436)(61,582)

Balance at 31 December

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
2019

2018

Balance at 1 January(144,397)(137,323)

Recognised actuarial gains/(losses)(16,194)(4,609)Change in pension reserve - gross(21,023)(8,697)

Change in pension reserve - tax

4,829

4,088

Effect of the asset ceiling-(2,465)

Change in pension reserve - gross-(3,286)

Change in pension reserve - tax-

822(160,591)(144,397)

2019

2018

1,283,527

1,164,758

33-

Dividends(91,782)(83,869)

Result for the year

227,708

202,638

1,419,485

1,283,527

Balance at 31 December

15.6

Retained earnings

Balance at 1 January
Acquisitions

Balance at 31 December

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.

111

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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).

16 Subordinated debt
2019

2018

Balance at 1 January323,790323,614

Accretion of interest

192

176

323,982

323,790

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 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 288 million (2018: EUR 260 million). The
fair value estimate of the subordinated loan issued by Atradius Reinsurance DAC is EUR 82 million (2018: 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

2019

2018

118,242

94,647

6,642

5,534

124,884

100,182

There has been a reclassification in 2018 figures due to contributions from Other long term employee benefits to Retirement benefits.

17.1

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% (2018:89%) 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.

112

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedWithin 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 11.6 million in 2019 (2018: EUR 11.4 million).
Pension 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
assetsAsset ceiling

Net defined benefit(asset) liability

2019

2018

2019

2018

2019

2018

2019

2018

Balance at 1 January
Included in the income
statement:

838,533

845,838

743,886

775,244-(3,286)

94,64773,880

-

-

-

-

-

-

-

-

Current service cost

12,42813,154----

12,42813,1540(3,877)

-

-

-

-

0

(3,877)

Interest cost / income

17,294

17,342

17,055

16,963

-

(66)

239

445

Administration costs

580

528

-

-

-

-

580

528

-

4,402

-

-

-

-

-

4,402

(1,176)

459

882

75

-

-

(2,058)384

29,12632,00817,937

17,038-(66)

11,18915,036- demographic assumptions(11,421)(12,275)

-

-

-

-

(11,421)(12,275)- financial assumptions

Past service cost

Cost of Termination Benefits
Effect of movements inforeign exchange rates
Total included in the income
statement
Included in OCI:
Remeasurement loss (gain):
Actuarial loss (gain) arisingfrom:

112,844

8,459

-

-

-

-

112,844

8,459- experience adjustments

770(2,228)

-

-

-

-

770

(2,228)Return on plan assets
excluding interest income--

83,032(21,471)--(83,032)

21,471

Change in Irrecoverable
Surplus other than Interest

--

-

-

-

3,352

-

(3,352)

Effect of movements inforeign exchange rates

16,056(2,554)

16,179(2,588)

-

-

(123)

34

Total included in OCI

118,249(8,598)99,211(24,059)-

3,352

19,038

12,109Other:
Contributions paid by theemployerPlan participants
contributions(3,817)(3,450)16,12820,554--(19,945)(24,004)

2,023

2,160

2,023

2,160

-

-

-

-

Benefits paid

(24,192)(29,425)(24,192)(29,425)

-

-

-

-

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

-

-

-

-

-

(1,640)----(14,953)(17,626)--

14,953

17,626

Total other(27,626)(30,715)(20,994)(24,337)--(6,632)(6,378)

Balance at 31 December

958,282

838,533

840,040

743,886--

118,242

94,647-113

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 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 16.3 million (2018: 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 35.3
million of financial investments (2018: EUR 28.7 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 2019 is EUR 53.4 million (2018: EUR 38.4 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 9.2 million (2018: EUR 13.1
million). At the end of 2019, the defined benefit obligation related to the reimbursement rights amounts to EUR 19.6
million (2018: EUR 21.9 million). This same defined benefit obligation has in addition plan assets of EUR 14.6 million(2018: EUR 15.5 million).

114

Atradius | Consolidated financial statements 2019 Atradius N.V.
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

130 active members (2018: 135
active members).
520 inactive members (2018: 525
inactive members).
EUR 287 million (2018: EUR 257
million).
EUR 341 million (2018: EUR 296
million).

496 active members (2018: 485
active members).
456 inactive members (2018:452 inactive members).
EUR 149 million (2018: EUR 129
million).
EUR 83 million (2018: EUR 74
million). Assets of EUR 16.3
million (2018: EUR 16.3 million)
are recognised as part of thefinancial investments.
EUR 10.5 million – loss (2018:
EUR 11.1 million - loss).

Defined benefit
obligation
Plan assets

Remeasurement
gain (loss) through
OCI
Fundingarrangement

EUR 6 million - gain (2018: EUR
13.5 million - gain).

Employeecontributions

In 2019 contributions amounted
to 7.1% (2018: 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).
289 active members (2018:307 active members).
1,361 inactive members (2018:
1,363 inactive members).
EUR 407 million (2018: EUR
343 million).
EUR 382 million (2018: EUR
326 million).

EUR 8.6 million - loss (2018:
EUR 17.9 million - gain).
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 20197.5% (2018: 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.

115

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 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 2019
Belgium
Germany
MexicoNorwaySpain
SwedenSwitzerland
The Netherlands
United Kingdom
Total

Plan assets 2018
Belgium
Germany
MexicoNorwaySpain
SwedenSwitzerland
The Netherlands
United Kingdom
Total

Cash and cash
equivalents
2,130
2,574
10,06429,93923369
154,413-51,2881,081
1,761
266,521

Insurance
contracts
Real estate Total 201945,15045,15083,357
1,104
3,663
3,663
14,573
14,573
370
341
2,841
3,141
3,141
225,249
382,236
13,85813,532
303,975

14,768

184,744

320,651

239,477

Equityinstruments

Debt
instruments

Investment
funds

Cash and cash
equivalents

Equityinstruments

Debt
instruments

1,711
-

23,22723

49,424
1,031

19,7381,033
22,482257
123,929
147,436

1,944
244,977
297,376

Investment
funds

66,527

13,873840,040

Insurance
contracts
Real estate Total 201840,261
40,261
74,363
1,054

314
182,433
14,905
197,652

3,372
16,604
4,976
65,213343
13,383
13,726

3,372
16,6042,858
4,976
326,100
274,298
743,886

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 98.3 million – gain (2018: EUR 4.2 million - loss).
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:

116All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

Principal actuarial
assumptions

United Kingdom
2019

2018

2019

2018

2019

2018

Discount rate

2.00%

2.75%

1.00%

1.75%

1.00%

1.75%

Price inflation rate
Expected increase of futuresalaries

3.00%

3.50%

1.75%

1.75%

1.75%

1.75%

2.25%

2.65%

2.30%

2.30%

1.75%

1.75%

Expected increase of future
benefit levels
Mortality table

Germany

The Netherlands

2.85%

3.19%

1.50%

1.50%

0.88%

0.88%

CMI 2018(1.5% LTR)

CMI 2017(1.5% LTR)

Heubeck
Richttafeln
2018 G

Heubeck
Richttafeln
2018 G

Prognosetafel
AG2018+ adjusted
experience

Prognosetafel
AG2018+ adjusted
experience

20

19

17

16

21

20

Duration in years

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

2019

2018

Increase

Decrease

Increase

Decrease

Discount rate (1% movement)(151,496)

202,141(124,531)

163,185

Price inflation rate (1% movement)

128,264(109,091)

87,371(80,472)

Future salary growth (1% movement)

20,232(19,275)

17,253(16,404)

Future pension growth (1% movement)

159,985(126,183)

130,557(103,926)

Future mortality (+1 year)

34,651n/a

25,555n/a

17.2

Defined benefit costs

A total defined benefit cost of EUR 13.9 million (2018: EUR 14.3 million) is recognised in the income statement undernet operating expenses (see Note 27). EUR 13.3 million (2018: EUR 14.2 million) relates to pension plans and EUR 0.6
million (2018: EUR 0.1 million) to other long-term employee benefits.

117

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

18 Insurance contracts
Credit insurance

Gross

Reinsurance
asset
2019

Net

Gross

Reinsurance
asset
2018

Net

Claims reported and loss adjustment
expenses

246,401(121,494)

124,907229,635(119,443)

110,192

Claims incurred but not reported

593,922(225,339)

368,583

592,305(230,085)

362,220

Claims provisions

840,323(346,833)

493,490

821,940(349,528)

472,412

Provision for unearned premium

332,904(101,679)

231,225

308,226(96,596)

211,630

Total

1,173,227(448,512)

724,715

1,130,166(446,124)

684,042

Claims reported and loss adjustment
expenses

198,008(68,230)

129,778

198,143(69,416)

128,727

Claims incurred but not reported

96,082(15,554)

80,52871,216(7,104)

64,112Claims provisions

294,090(83,784)

210,306

269,359(76,520)

192,839

Bonding

Provision for unearned premium

238,912(79,306)

159,606

220,344(75,072)

145,272

Total

533,002(163,090)

369,912489,703(151,592)

338,111

Total insurance contracts

1,706,229(611,602)

1,094,627

1,619,869(597,716)

1,022,153

Current

1,172,479(420,278)

752,200

1,113,521(410,878)

702,642

Non-current

533,750(191,324)

342,426

506,348(186,838)

319,511The 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
2010-2019 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 2019. Underwriting year here means the year in which the risks were
accepted; for reinsurance business it is the treaty year.

118

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

Credit Insurance – Gross
Claims development per underwriting year – (EUR million)

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

2010

2011

2012

2013

2014

2015

2016

2017

2018

515.2

739.7

809.6

682.1

753.0

829.6

755.7

770.4

833.8

2019

Total

858.5
(1)

one year later

500.3

694.4

764.0

586.0

734.6

780.7

669.6

735.3

890.7

-

two years later

451.2

670.4

704.9

554.6

734.9

744.5

638.5

679.9

-

-

three years later

437.4

663.5

696.3

543.8

732.4

715.0

627.4

-

-

-

four years later

438.9

649.7

684.3

540.9

724.5

701.7

-

-

-

-

five years later

432.1

642.9

685.4

533.2

713.3

-

-

-

-

-

six years later

425.7

636.7

678.1

522.2

-

-

-

-

-

-

seven years later

419.1

630.5

683.2

-

-

-

-

-

-

-

eight years later

414.8

623.9

-

-

-

-

-

-

-

-

nine years later
Current estimate of
cumulative claims
Cumulative
payments to date
Claims provision at
31 December 2019
in respect of 2010 2019
In respect of prioryears (before 2010)

410.0

-

-

-

-

-

-

-

-

-

410.0-

623.9

683.2

522.2

713.3

701.7

627.4

679.9

890.7

858.5

6,710.7

412.0

625.0

662.9

530.7

690.5

705.5

653.7

680.1

727.5

194.8

5,882.7

(1.9)

(1.1)

20.3

(8.6)

22.7

(3.8)

(26.3)

(0.2)

163.2

663.7

828.0
12.3

Total

840.3

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 2016-2018 in thecurrent financial year for these blocks of business was EUR 132.1 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 41.3%. Risk mitigation forgross claims incurred as shown in this table varies between 37% and 47%. These differ from the quota share treaties
due to the private instalment credit protection which are not ceded and the inward reinsurance business which iscovered by Excess of loss treaties.
(1)

2019 claims development table includes a single large claim of 83.9m which was 100% reinsured and had zero impact on the net insurance result.

119All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

Bonding - Gross
Claims development per underwriting year – (EUR million)

Year when risk
was taken

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Total

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

10.2

19.3

19.0

21.7

19.0

21.0

16.8

13.6

10.6

31.7

one year later

25.7

48.8

48.6

32.6

34.6

26.8

22.8

32.0

36.1

-

two years later

36.4

60.8

53.7

39.1

43.6

31.5

32.9

36.6

-

-

three years later

43.4

62.8

58.4

42.0

45.8

38.2

37.4

-

-

-

four years later

43.4

57.4

58.7

41.0

41.6

44.0

-

-

-

-

five years later

42.4

60.7

58.5

40.2

39.3

-

-

-

-

-

six years later

42.1

64.2

58.1

45.7

-

-

-

-

-

-

seven years later

42.3

64.6

56.2

-

-

-

-

-

-

-

eight years later

42.3

65.8

-

-

-

-

-

-

-

-

nine years later
Current estimate of
cumulative claims
Cumulative
payments to date
Claims provision at
31 December 2019
in respect of 2010 2019
In respect of prioryears (before 2010)

42.1

-

-

-

-

-

-

-

-

-

42.1

65.8

56.2

45.7

39.3

44.0

37.4

36.6

36.1

31.7

434.9

31.9

53.7

42.1

24.6

20.5

11.4

16.6

8.9

13.1

4.1

226.8

10.2

12.0

14.1

21.1

18.8

32.6

20.8

27.8

23.0

27.6

208.0
86.0

Total

294.1

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 2016-2018 in the current financial year was EUR 75 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 28.5%. Risk mitigation forgross claims incurred as shown in this table varies between 19% and 30%.

120

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

18.2

Insurance liabilities and reinsurance assets

18.2.1 Changes in insurance liabilities and reinsurance assets
Credit insurance

Gross

Reinsurance
asset
2019

Net

Gross

Reinsurance
asset
2018

Net

Balance at 1 January

821,940(349,528)

472,412

777,406(342,904)

434,503

Claims paid in the year
Increase/(decrease) in liabilities
arising from claims
Foreign exchange rate and othermovements(773,560)

357,442(416,118)(639,597)

263,355(376,242)

779,651(351,921)

427,730

683,421(269,438)

413,983

12,293(2,826)

9,467

709

(541)

168

Balance at 31 December

840,323(346,833)

493,490

821,940(349,528)

472,412Claims reported and loss adjustment
expenses

246,401(121,494)

124,907229,635(119,443)

110,192

Claims incurred but not reported

593,922(225,339)

368,583

592,305(230,085)

362,220

Total

840,323(346,833)

493,490

821,940(349,528)

472,412

Balance at 1 January

269,359(76,520)

192,839

250,752(74,094)

176,658

Claims paid in the year
Increase/(decrease) in liabilities
arising from claims
Foreign exchange rate and othermovements(45,270)

10,657(34,613)(30,117)

10,085(20,032)

72,276(18,174)

54,102

52,730(13,500)

39,230(2,275)252(2,023)(4,006)990(3,016)

Balance at 31 December

294,090(83,785)

210,305

269,359(76,520)

192,840

Claims reported and loss adjustment
expenses

198,008(68,230)

129,778

198,143(69,416)

128,727

Claims incurred but not reported

96,082(15,554)

80,52871,216(7,104)

64,112

Total

294,090(83,784)

210,306

269,359(76,520)

192,839

Claims provisions

1,134,413(430,617)

703,796

1,091,299(426,048)

665,251

Bonding121

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

18.2.2 Provision for unearned premium
Credit insurance

Gross

Reinsurance
asset
2019

Net

Gross

Reinsurance
asset
2018

Net

308,226(96,596)

211,630

287,072(94,938)

192,134

21,358(4,584)

16,775

18,548(1,118)17,430

3,320

(499)

2,821

2,606

(540)

2,066

332,904(101,679)

231,225

308,226(96,596)

211,630

220,344(75,072)

145,272

215,108(73,950)

141,158

Movement in the period
Foreign exchange rate and othermovements

17,069(4,156)

12,913

5,202(1,395)

3,807

1,499

(79)

1,421

34

273

307

Balance at 31 December

238,912(79,306)

159,606

220,344(75,072)

145,272

Provision for unearned premium

571,817(180,985)

390,832

528,570(171,668)

356,902

Balance at 1 January
Movement in the period
Foreign exchange rate and othermovements
Balance at 31 December
Bonding
Balance at 1 January

19 Other provisions
2019

Restructuring

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

1,485

-

1,485

-

1,135

1,135

Restructuring

Litigation

Total

Balance at 1 January

1,131

1,903

3,034

Additional provisions

485

784

1,269

Unused amounts reversed

(180)

(249)

(429)

Utilised

(856)

(339)

(1,195)

Balance at 31 December

580

2,099

2,679

Current

580

-

580

--

2,099

2,099

Unused amounts reversed
Utilised
Effect of movements in foreign exchange rates

Non-current
2018

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

122

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise statedprovision 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
2019

2018

Current income tax assets

40,88948,935Current income tax liabilities

38,74747,992

Net

2,142

943

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.
Deferred income tax
2019

2018

Deferred income tax assets before set-off

167,958

136,080

Set-off of deferred tax positions(132,343)(98,809)35,61537,271

Deferred income tax liabilities before set-off

235,852

199,964

Set-off of deferred tax positions(132,343)(98,809)

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

103,509

101,155

2019

2018

Balance at 1 January(63,884)(94,864)

Credit (charge) to other comprehensive income for the year

(14,276)

14,926Charge to the income statement for the year

11,18815,955

Effect of movements in foreign exchange rates

(922)

99

(67,894)(63,884)

Net deferred tax assets 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

123All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

The movement in the deferred tax assets and liabilities is presented in the following table:
2019

Balance at 1
JanuaryTax losses carried forward

12,662

Technical balances
Pensions

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

Effect ofmovements
in foreignexchange

Balance at 31
December

7

8,836

-

(3,833)33,810-10,122

114

44,047

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)

(22,964)

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)2018

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

12,171-489

2

12,662

Technical balances

13,120-20,667

23

33,810Pensions

22,4204,909(5,852)

73

21,5507,285-(2,573)80

4,792

Financial investments(12,772)

10,017(1,603)89(4,268)Equalisation provisions(113,567)

-

8,315

129

(105,123)

Property, plant and equipment(13,545)

-

(175)

(30)

(13,750)

Other(9,976)-(3,313)(267)(13,556)

Total(94,864)

14,926

15,955

99(63,884)

Fiscal goodwill

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 2019, EUR 1.2
million deferred tax assets on the losses carried forward and deductible temporary difference were written down or
not recognised (2018: EUR 1.4 million). This is offset by the reversals of the impairments, prior year adjustments andforeign exchange, resulting in a net reversal of these deferred tax assets.
Atradius has unrecognised tax losses carried forward balances amounting to EUR 56.0 million (2018: EUR 54.1
million). The expiration of these unrecognised tax losses carried forward is included in the following table:
Expiration unrecognised tax losses carried forward

2019

2018

1 - 3 years

4,222

6,199

4 - 9 years

6,219

6,427

Indefinite

45,571

41,452

Total

56,01254,078The increase of unrecognised tax losses is mainly due to the tax loss of this year in loss making countries with arestriction on the carry forward of losses.

124

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

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

Deferred tax

2019

Current tax

2018

Revaluation reserve in shareholders equity related to:
Available-for-sale financial investments(19,105)-

10,017

-

4,829

-

4,909

-

-

(577)

-

1,231

(14,276)(577)

14,926

1,231

2019

2018

Accounts payable on insurance and reinsurance business

122,186

152,802

Payables arising out of reinsurance operations

68,61098,723

Amounts due to policyholders

35,00335,877

Amounts due to intermediaries and current account Dutch State

18,574

18,202

Trade and other accounts payable

56,496

74,206

Accounts payable

22,72342,850

Other accounts payable

33,77331,356

Total

178,682

227,008

2019

2018

Ceded pipeline premium and return premium

205,231203,621

Deposits received from reinsurers

43,52942,011

Unearned reinsurance commission

64,16559,503

Payroll and bonus accruals

51,19850,056

Reinsurance accruals

28,173

27,571Other accruals

92,69084,569Other taxes

9,971

13,516

Lease liabilities

85,038-

Total

579,994

480,847

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

21 Payables

The payables are substantially all current.

22 Other liabilities

125All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

Lease liability maturity analysis

2019

Lease liability maturity analysis (undiscounted cash flows)
Less than one year

22,092

Between one and five years

50,943More than five years

20,079

Total

93,11423 Net premium earned
Credit insurance

Gross

Reinsurers'
share

Net

Gross

Reinsurers'
share
2018

2019
Written premiumNet

1,604,428(638,189)

966,239

1,500,202(620,852)

879,351

Change in provision for unearned
premium(21,358)

4,584(16,775)(18,548)

1,118(17,430)

Other movements(1,060)

419

(641)

197

(173)

24

1,582,010(633,186)

948,823

1,481,853(619,907)

861,945

Written premium

194,766(56,324)

138,441

171,908(53,486)

118,422

Change in provision for unearned
premium(17,069)

4,156(12,913)(5,201)

1,395(3,806)

(183)

67

(116)

(33)

10

(23)

177,514(52,102)125,412

166,674(52,081)

114,593

1,759,523(685,288)

1,074,235

1,648,527(671,988)

976,539

2019

2018

Debt collection services

52,55046,657

Credit information services

136,500

132,511

Business information and other service income

63,44770,349

Total

252,497249,517

Total
Bonding

Other movements
Total
Total premium earned

The written premium and change in provision for unearned premium contain reinsurance business.

24 Service and other income

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.
Around 16.5% of total service income relates to variable consideration. In all cases, the conditions for variable

126

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated-consideration are explicitly stated in the contract.
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.

127All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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

2019

2018

15,524

12,150910Equity securities available-for-sale

9,435

11,772Other investments

1,640

965

Total income from financial investments

26,60824,897813

520

27,421

25,417

IncomeDebt securities available-for-sale
Loans

Investment property
Total investment income
Expenses
Debt securities available-for-sale

(132)

(524)

Equity securities available-for-sale(4,114)(3,230)Handling expenses(4,307)(4,097)

Total expenses from financial investments(8,553)(7,851)

(92)

(73)

Total investment expenses(8,645)(7,924)

Net income from investments

18,776

17,493

Share of income/ (losses) of associated companies(1,093)

4,652

Net income from investments including associated companies

17,68322,145Investment property

128

All amounts
in thousandsof Euro,unless otherwise
stated N.V.
Atradius| Consolidated
financialstatements
2019 Atradius

Net investment income by nature of income/(expense)

2019

2018

Interest

14,382

11,946

Dividends

9,431

9,383

Realised gains

2,994

3,567

614

521

27,421

25,417

Handling expenses(4,307)(4,097)

Realised losses(1,434)(3,410)

Impairment loss

(2,770)

(299)

(134)

(118)

Total

(8,645)(7,924)

Net income from investments

18,776

17,493

Share of income of associated companies

7,126

4,652

Impairments of associated companies(8,219)-Realised gains

-

-

Other

-

-

Total

(1,093)

4,652

Net income from investments including associated companies

17,68322,145

IncomeRental income from investment property
Total
Expenses

Depreciation of investment property

In interest income and expenses reported above, the component related to financial investments available-for-sale is
net EUR 12.7 million (2018: EUR 11 million); this is derived from government and corporate bonds.

Net gains/(losses) by category

Impairments

Realised
gains/(losses)
2019

Investment property

Impairments

Realised
gains/(losses)
2018

42

206

45

-

Financial assets classified as available-for-sale(2,812)

1,354

(344)

157

Total

(2,770)

1,560

(299)

157

129

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

26 Insurance claims
Credit insurance

Claims paid in the year
Change in claims provisions

Gross

Reinsurers'
share
2019

Net

Gross

Reinsurers'
share
2018

Net

773,560(357,442)

416,118

639,597(263,354)

376,243

6,091

5,521

11,612

43,826(6,084)37,742Claims handling expenses

38,836-

38,836

37,463-

37,463

Total

818,487(351,921)

466,566

720,885(269,438)

451,447

Claims paid in the year

45,270(10,657)

34,61330,117(10,085)

20,032

Change in claims provisions

27,006(7,517)

19,48922,612(3,415)19,197

Claims handling expenses

1,548

-

1,548

1,630

-

1,630

Total

73,824(18,174)

55,65054,359(13,500)

40,859Total insurance claims

892,311(370,095)

522,216775,244(282,938)

492,306

2019

2018

Total administrative expenses

565,821543,083

Acquisition costs

233,480

211,252

Bonding

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

27 Net operating expenses

Change in deferred acquisition costs(3,701)(1,128)Gross operating expenses

795,600

753,207

Commissions received for business ceded to reinsurers(316,497)(283,418)

Total net operating expenses

479,103469,789

2019

2018

Insurance and information expenses

482,218

452,607

Recoveries and collections expenses

52,43247,585

Other service expenses

63,95473,861

Group costs

7,601

8,123

606,205

582,176

Administrative expenses by type of businessTotal gross administrative expenses
Claims handling expenses allocated to insurance claims(40,384)(39,093)

Total administrative expenses

565,821543,083

In the gross administrative expenses are included:- Depreciation, amortisation and impairment charges for intangible assets and property, plant and equipment amount to
EUR 78.5 million (2018: EUR 38.9 million).
- Short term and low value leases amount to EUR 0.1 million

130

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

Employee benefit expenses

2019

2018

333,288

321,422

Restructuring costs and termination benefits

1,176

305

Pension costs - defined contribution plans

11,607

11,382

Pension costs - defined benefit plans

13,91814,268359,989

347,377

Salaries and wages (including social security costs)

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

28 Finance expenses
2019

2018

Impairment of goodwill

10,000-Interest and fees on the subordinated debt

17,077

17,074

Net interest on the net defined benefit liability

134

323

Other interest expense

1,833

1,961

Foreign exchange (income)/expense

1,292(4,759)Interest expense on Right of use

2,552

-

Total

32,888

14,599The subordinated debt costs include the periodic interest expenses of EUR 16.9 million (2018: EUR 16.9 million) andthe accretion of interest on the debt in the amount of EUR 0.2 million (2018: EUR 0.2 million).

29 Income tax
2019

2018

Current tax

96,31890,665

Deferred tax(11,188)(15,955)

Income tax expense/(income) for the year

85,13074,710

The reconciliation from the expected tax rate to the actual tax rate is provided in the following table:
2019

2018

Result before tax

312,838

277,365

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

76,541

69,767

Tax exempt (income)/loss

1,561(2,012)

Write down/(reversal) of deferred tax assets

168

(506)

Reassessment of prior year local tax positions

3,363

80

Impact of change in tax rate

(1,650)(1,975)

Other

5,148

9,356

Income tax expense/(income) for the year

85,13074,710The weighted average applicable tax rate was 24.5% (2018: 25.2%).
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’.

131All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

The impact of the change in tax rate in 2019 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 2019 and 2018 were EUR 91.8 million (EUR 1.16 per share) and EUR 83.9 million (EUR 1.06 pershare) respectively.

31 Assets not freely disposable
The financial assets not freely disposable in 2019 are EUR 290,8 million (2018: EUR 226.4 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 84.4 million (2018: EUR 79.3 million).

32 Capital commitments and contingencies
Capital commitments of EUR 21.1 million (2018: EUR 15.8 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 1.2 million (2018: EUR 1.2 million).

33 Personnel
The number of employees working for Atradius is included in the following table:
2019

2018

Total average number of employees (full-time equivalent)

3,538

3,571

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

3,530

3,545

Total year end number of employees (headcount)

3,692

3,707

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)2019
Sales to related parties

15,539Purchases from related parties
Amounts owed by related parties
Amounts owed to related parties(1) Subsidiaries of Grupo Catalana Occidente, S.A.
(2) For comparative purposes 2018 figure has been amended.

132

Associatedcompanies

Parent (1)

2018
775

17,668

2,423

2,808

3,526

755
1403 (2)983

12,502

60

13,116

67

334

1

383

All amounts in thousands of Euro, unless otherwise stated
Atradius | Consolidated financial statements 2019 Atradius N.V.

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.
Terms and conditions of transactions with related parties
No guarantees have been provided or received for any related party receivables for 2019 or 2018. For the years ending
31 December 2019 and 2018, Atradius has not raised any provision or expenses for doubtful debtors relating toamounts 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 2019 theinterest expense relating to this portion was EUR 3.0 million (2018: EUR 2.9 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 2019 the interest expense relating to this subordinate loan was EUR 3.4 million.
The related party share for the subordinated debt is as follows:
Lenders

Nominalvalue

Interest
expense2019

Nominalvalue

Interest
expense2018

Plus Ultra, Seguros Generales y Vida, S.A. de Seguros y
Reaseguros

40,0002,110

40,0002,098

Seguros Catalana Occidente S.A. de Seguros y
Reaseguros

36,291

1,871

36,291

1,872

Bilbao Compañía Anónima de Seguros y Reaseguros

43,0002,158

43,0002,162

Nortehispana, de Seguros y Reaseguros S.A.
Total

6,000

299

6,000

300

125,291

6,438

125,291

6,432

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

133

Atradius | Consolidated financial statements 2019 Atradius N.V.
All amounts in thousands of Euro, unless otherwise stated

Remuneration

2019

2018

Short-term employee benefits (1)

2,640

2,158

Long-term employee benefits

1,259

773

Post-employment benefits

344

354

4,243

3,285

5

5

Short-term employee benefits (1)

566

595

Total compensation paid to Supervisory Board members

566

595

9

10

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 2.9 million (2018: EUR 2.5 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/she must immediately
report this to the Chairman of the Board, who will determine whether the reported case qualifies as a conflict ofinterest. A member of the Board will not participate in any deliberations or decision-making of the Board if thatmember 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 Board will pass the resolution. In 2019 there has not been any
conflict of interest.

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

134

Atradius | Company financial statements

Company financial statements 2019
Contents
Companyfinancial
financialstatements
statements......................................................................................................................................................................... 87
Company........................................................................................................................................................................136
Notestotothe
thecompany
Company
financialstatements................................................................................................................................................ 89
Notes
financialstatements................................................................................................................................................138
1

General information
Generalinformation....................................................................................................................................................................................138...................................................................................................................................................................................... 8922

Summary ofpolicies......................................................................................................................................138
Summary
ofsignificant
significantaccounting
accounting
policies........................................................................................................................................ 89

3

Investments in group companies ...........................................................................................................................................................139

3

Investments in group companies ............................................................................................................................................................. 90

4

Capital and reserves...................................................................................................................................................................................... 90

5
6

Other
liabilities ................................................................................................................................................................................................ 91
Contingencies ............................................................................................................................................................................................... 140

76

Contingencies...................................................................................................................................................................................................
91
Personnel .......................................................................................................................................................................................................
140

8
7

Auditor fees.................................................................................................................................................................................................... 141
Personnel...........................................................................................................................................................................................................
91

4
5

Capital and reserves ....................................................................................................................................................................................139
Other liabilities ............................................................................................................................................................................................ 140

9Remunerationof Management Board and Supervisory Board .................................................................................................... 141
8 Auditor
fees .......................................................................................................................................................................................................
92
10 Proposed profit appropriation ................................................................................................................................................................. 141

9 Remuneration of Management Board and Supervisory Board ....................................................................................................... 92

11

Events after the reporting period ...........................................................................................................................................................142

10 Proposed profit appropriation................................................................................................................................................................... 92

11 Events after the reporting period .............................................................................................................................................................. 93135

All amounts in thousands of Euro, unless otherwise statedCompany financial statements
Company balance sheet(before profit appropriation)
AssetsNote

Fixed assets
Property, plant and equipment
3

Investments in group companies

31.12.2019

31.12.2018

1,994,631

1,817,083

5

10

1,994,626

1,817,073

Current assets

39,59539,046

Receivables from group companies

25,572

9,265

Current income tax assets

1,836

7,304

Cash and cash equivalents

12,18722,4772,034,226

1,856,129

Total
EquityCapital and reserves attributable to the owners of the Company

4

Share capital

79,122

79,122

Share premium reserve862,883

862,883

Legal reserve(37,256)(100,056)- Reserve intangibles assets

73,64862,210- Revaluation reserve

81,91925,508- Pension reserve(160,595)(144,400)- Currency translation reserve(32,228)(43,374)

876,269

776,818

Retained earnings
Result for the year (unappropriated)

227,708

202,638

2,008,726

1,821,405

Current liabilities

25,50034,724

Payables to group companies

21,006

29,837

4,494

4,887

25,50034,7242,034,226

1,856,129

2019

2018

229,939

207,068

Total
Liabilities

5

Other liabilities
Total
Total equity and liabilities

Company income statement
Income after tax from group companies
Other results after tax
Result for the year

136

(2,231)(4,430)227,708

202,638

Atradius | Company financial statements

Company statement of changes in equity
Legal reserves

SharecapitalSharepremium
reserve

79,122862,883

45,262

63,060(137,326)(37,404)

691,360

186,275

1,753,232---(37,552)(7,074)(5,970)--(50,596)---(37,552)(7,074)(5,970)--(50,596)

Appropriation ofprior year result

-

-

-

-

-

-

186,275

Result for the
year

-

-

-

-

-

-

Change in reserve
intangible assets--

16,948

-

-

-

-

-

-

-

79,122862,883

62,21025,50879,122862,883

62,21025,508---56,411

-

-

-

-

-

-

Balance at 1
January 2018
Change inrevaluation
reserve, pension
reserve andcurrencytranslation
reserve
Net income
recognised
directly in equity

Dividends
Balance at 31
December 2018
Balance at 1
January 2019
Change inrevaluation
reserve, pension
reserve andcurrencytranslation
reserve
Net income
recognised
directly in equity
Acquisitions
Appropriation ofprior year result
Result for theyear
Change in reserve
intangible assets
Dividends
Balance at 31
December 2019

Reserve
Revaluatio
intangibles
n reserve
assetsCurrency Retained Result fortranslation earnings the year
reserve

Pensionreserve(186,275)

Total

-

202,638

202,638- (16,948)--- (83,869)-(83,869)(43,374)

776,818

202,638 1,821,405(43,374)

776,818

202,638

1,821,405(16,195)

11,146--51,36256,411(16,195)

11,146--51,362

-

-

-

-

33

-

33

-

-

-

-

- 202,638 (202,638)

-

-

-

-

-

-

-

-

-

11,438

-

-

-

-

-

-

-

-

79,122862,883

73,64881,919 (160,595)

137(144,400)(144,400)

227,708

227,708(11,438)---(91,782)-(91,782)(32,228)

876,268

227,708

2,008,726

All amounts in thousands of Euro, unless otherwise statedNotes 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 2019 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. and Atradius Information Services B.V.
The Company financial statements have been authorised for issue by the Management Board on 4 March 2020.

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. The valuation principles for assets and liabilities and the method ofdetermining the result are identical to those applied in the consolidated financial statements. Reference is made to thenotes thereto.
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 reserve.

138

Atradius | Company financial statements

3

Investments in group companies

The following table shows the changes in investments in group companies valued using the equity method:
2019

2018

1,817,073

1,751,470

33--

Share of profit/(loss)

229,939

207,068

Dividends received(103,782)(90,869)

Change in revaluation reserve and pension reserve

40,217(44,626)

Foreign exchange reserve movements

11,146(5,970)1,994,626

1,817,073

Balance at 1 January
Investments in group companies

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 2018) of which 79,122,142 ordinary shares were issued and fully
paid (equal to 2018). The fully paid ordinary shares carry one vote per share and carry the right to dividends.

4.2

Share premium reserve
2019

2018

Balance at 1 January862,883

862,883

Balance at 31 December

862,883

862,883

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 within consolidated
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 reservein 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.

139

All amounts in thousands of Euro, unless otherwise stated

4.4

Retained earnings
2019

2018

Balance at 1 January

776,818

691,360

Appropriation of prior year result

202,638

186,275

Transfer between legal reserve and retained earnings(11,438)(16,948)

Dividends(91,782)(83,869)33-

876,269

776,818

2019

2018

Long-term employee benefits

1,890

1,460

Other liabilities

2,604

3,427

Total

4,494

4,887

Acquisition minorities
Balance at 31 December

5

6

Other liabilities

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 (2018: 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 Credit Management Services B.V., Atradius
Dutch State Business N.V., and Graydon Holding N.V. (including its Dutch subsidiaries). All companies included in thefiscal unity are jointly and severally liable for the corporate income tax payable in the Netherlands by the fiscal unity.
As per 21 October 2019 the conversion of Atradius Participations Holding B.V. to Spain was completed, after which thename of the company was changed into Atradius Participations Holding S.L. With retroactive effect to 1 January 2019
this company is taxable in Spain and is no longer included in the Dutch fiscal unity headed by Atradius N.V.
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, (2018: 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:
2019

2018

Total average number of employees (headcount)

6

6

Total year end number of employees (headcount)

6

6

140

Atradius | Company financial statements

8 Auditor fees
The following expenses were made for audit and non-audit services rendered by Atradius’ external auditor:
2019 Including VAT

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

PwC
Accountants
N.V.

Other PwC
Networkorganisations

Total PwC
Network

576

1,694

2,271

-

493

493

Fiscal advisory services

34

18

52

Non-audit services

69

545

614

Total

679

2,751

3,430

Audit financial statements

Total
2018 Including VAT

Audit financial statements
Other audit services

These amounts relate to the actual expenses incurred for the audit of the related financial year, and other services, on an
accrual basis (expenses and non-recoverable VAT costs are included). The amounts reported on non-audit services andfiscal advisory service lines are related services performed in previous years but paid in 2019.

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.

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 andto make, in 2020, a distribution of EUR 102.9 million out of the retained earnings.

141

All amounts in thousands of Euro, unless otherwise stated

11 Events after the reporting period
There are no events to report142Atradius | Other information

Other information

143

Atradius | Other information

Statutory appropriation of result
In accordance with article 24 of the Articles of Association the result for the year is at the disposal of the General
MeetingAnnual Report Atradius N.V.
Amsterdam, 4 March 2020
The Supervisory Board

The Management Board

Ignacio Álvarez, Chairman
Francisco Arregui, Vice-Chairman
Bernd H. Meyer
Xavier Freixes
Hugo Serra
Désirée van Gorp
John Hourican
Carlos Halpern
José Maria Sunyer

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

144

Atradius | Other information

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

Report on the financial statements 2019
Our opinion
In our opinion:−−

the consolidated financial statements of Atradius N.V. together with its subsidiaries (‘the Group’) givea true and fair view of the financial position of the Group as at 31 December 2019 and of its result andcash 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 of thefinancial position of the Company as at 31 December 2019 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 2019 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 2019;−the following statements for 2019: 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 2019;−the company income statement 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 therelevant provisions of Part 9 of Book 2 of the Dutch Civil Code for the consolidated financial statements andPart 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 havefurther 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

145

Atradius | Other information

assuranceopdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect toindependence) and other relevant independence requirements in the Netherlands. Furthermore, we havecomplied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).

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 otherinformation that consists of:−the directors report;−
the other information pursuant to Part 9 of Book 2 of the Dutch Civil Code.
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 thefinancial 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 Codeand 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 andwith Part 9 of Book 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 to do 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.

146

Atradius | Other information

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 sufficientand appropriate audit evidence to provide a basis for our opinion. Our objectives are to obtain reasonableassurance about whether the financial statements as a whole are free from material misstatement, whether
due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highbut 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 theaggregate, they could reasonably be expected to influence 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 ofidentified misstatements on our opinion.
A more detailed description of our responsibilities is set out in the appendix to our report.
Rotterdam, 4 March 2020
PricewaterhouseCoopers Accountants N.V.

Original has been signed by M.D. Jansen RA147

Atradius | Other information

Appendix to our auditor’s report on the financial statements 2019 of
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
in accordance 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 not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theintentional override of internal 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 the effectiveness 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 ofaccounting, 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 tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures 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 aremade 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 and events in a manner that achieves fair presentation.

Considering our ultimate responsibility for the opinion on the consolidated financial statements, we areresponsible 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 the geographic 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 for which an audit or review of financial information or specific balances wasconsidered necessary.
We communicate with the supervisory board regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

148

Atradius | Glossary

Glossary
Atradius Atrium
online 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 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.

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.

149Atradius | Glossary

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 andmedium-term risks involved in multiple instalment agreements with private individuals and businesses (business-toconsumer).

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 unacceptablerisks. These terms and conditions include premium rate, maximum credit periods, the insurer’s maximum liability, thecustomer’s own retention and other risk sharing and mitigation aspects.

Political risk
The risk that a government buyer 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.

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.

150

Atradius | Glossary

SME
Small and medium-sized enterprises.

Solvency II
An EU Directive that codifies the EU insurance regulation. It introduces a new regulatory framework and has comeinto effect on January 2016. The Solvency II Directive aims to create a harmonised, risk-orientated 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 protection of policyholders andbeneficiaries, 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 and strategies
with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption.

151

Overview of subsidiaries,
associated companies andminority shareholdings
The following table sets forth, as at 31 December 2019, 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 LTDADAP Holding N.V.
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.
Iberinmobiliaria, S.A.U.
Iberinform Portugal S.A.
Informes Mexico, S.A. de C.V.
Invercyca, S.A.U.
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.

* Minus one share

152

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%
BrazilNetherlands
2.37%
Portugal
Netherlands
Netherlands
Netherlands
Belgium
United Kingdom
Netherlands
2.7%
Spain
Spain
PortugalMexicoSpain
Netherlands
0.5%
Netherlands
Indonesia
Poland99.99%
Lebanon
48.9%
Netherlands
0.65%Disclaimer
The information in the chapter ‘The global economic environment in 2018’ is for general guidance on matters ofinterest only. While we have made every attempt to ensure that the information contained in this report reflects carefulanalysis and investigations on our side before publication of this Annual Report, we are neither responsible for any
errors or omissions 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 partnerships or corporations, or the directors, partners, agents or
employees thereof will in no event be liable to you or anyone regarding any decision made or action taken in relianceon 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

153