Leading the future
Annual Report 2016 Atradius N.V.

Contents
This is Atradius .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3Our 2016 performance at a glance . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 5Ten years in figures.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 7Leading the future. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 8

Leading the future

A message from the Management Board

10

Business profile .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14
Products, services and brand .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14
Global footprint.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 17
Atradius Group organisation . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 19

Corporate governance .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21
Report of the Supervisory Board. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 21

through innovation

Shareholder structure. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 23
Corporate governance. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26

Consolidated management report. .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 32
The global economic environment .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 32
Business performance . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 35
Human resources .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 43
Risk and capital management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 45
Corporate responsibility .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 47

through expansion

Financial statements . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 52
Consolidated financial statements 2016 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 53
Company financial statements 2016 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 136

Other information . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 144
Independent auditor’s report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 146
Glossary.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 149.
	 Overview of subsidiaries, branches, associatedcompanies and minority shareholdings .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 152

through commitment
Click on the arrow  

2

to go straight to that section of the reportAtradius | This is AtradiusThis is Atradius
Our aim is to lead our customers into the
future by strengthening their credit andcash management, supporting them ingrowing their business.
Everyone at Atradius, no matter what their role, lives and breathes ‘service’.
Certainly, our business is built on our credit insurance and the wide range of credit
management products and services we can deliver - such as credit insurance,
bonding, collections and reinsurance – but it is our people, working in unison, who
through their ingenuity and dedication deliver exceptional credit management
solutions. Our people come to work every day committed to providing the best
service, and all of them play their part in helping our partners achieve their goals.
Through this commitment we can lead credit management through the
21st Century.
Our information services are designed to guide our customers to well-informed
trade decisions. And this year our constantly updated company and financial
information on over 240 million companies worldwide has been strengthened
further by the acquisitions of Graydon Holding N.V. (Graydon) in the Netherlands
and IGNIOS Gestão Integrada de Risco S.A. (Ignios) in Portugal.
In order to lead one must anticipate. That’s why we not only support our customers‘on the ground’ in the markets where they currently do business, but also identify
and help them take advantage of future opportunities in new markets. For example,
in 2016 we expanded our coverage in South Korea and we are committed toacquiring a stake in Credit Guarantee Insurance Corporation of Africa Ltd., theAfrican trade credit insurance leader. We plan to continue improving our customers’
access to new markets around the world in 2017. We are now present in over 50
countries with more than 3,000 employees and numerous partners all focused onleading our customers to profitable business - while of course supporting themwhen their buyers don’t pay.
But leading also requires innovation. From our modular credit management approachto Atradius Insights we are leading through our investments in new technology.
This enables us to provide our customers with consistent products and services,tailored to their needs everywhere and in every language that we do business. For ourcustomers, innovation is the freedom to discover growth opportunities by having theability to analyse their buyer information at their fingertips.
We lead by being close to our customers’ businesses: geographically in their homemarkets and those of their buyers, intellectually by taking the time to get to know
their businesses and what they need to succeed, and emotionally by building real
relationships and partnerships. In this way, we do everything possible to help themsucceed. Our aim is to be the preferred partner in growing business.

3

Everyone at
Atradius lives
and breathes
service.

Atradius | This is Atradius

The evolution of Atradius
1925 –	NCM (Nederlandsche Credietverzekering Maatschappij) is foundedin the Netherlands, with the aim of improving trading conditions for
Dutch companies.
1929 –	In Spain, Crédito y Caución is founded. Since then it has grownorganically to become the dominant credit insurance and surety
company on the Iberian Peninsula.
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
established as 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 longstanding
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
on delivering tailor-made solutions in each of its markets.
2014 –	Grupo Catalana Occidente S.A. celebrates its 150th anniversary, andthe 10th anniversary of the Atradius brand.
2016 –	Atradius N.V. strengthen it’s information services by acquisitionsof Graydon Holding N.V. (Graydon) in the Netherlands and IGNIOSGestão Integrada de Risco S.A. in Portugal.

4

Atradius | This is Atradius

Our 2016 performanceat a glanceContinued strong contributions
across the Group.
• T otal income increased by 3.0% (3.3% at constant foreign exchange rates),
supported by growth in our core market in Europe.
• T otal revenue increased by 2.5% including service result (3.4% at constantforeign exchange rates), supported by growth in our core market in Europe.
• T he investment return contributed positively to the bottom line driven by the
positive performance of the investment portfolio.
• O ur risk acceptance remained high in 2016 delivering a solid 41.6% claims ratioby successfully managing claims costs in a deteriorating risk environment.
• The combined ratio ended at 78.0% (1).
• The result for the year was EUR 211.8 million.
• O ur shareholder’s equity and subordinated debt position was further
strengthened by 8.4%, resulting from profit generation and an additional
subordinated loan of EUR 75 million provided by the shareholders ofAtradius N.V.

Management Board
Isidoro Unda (Chairman)
Andreas Tesch
Christian van Lint
Claus Gramlich-Eicher
Marc Henstridge

The Supervisory Board		
Ignacio Álvarez (Chairman)
Francisco Arregui (Vice-Chairman)
Bernd Meyer
Dick Sluimers
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) The combined ratio is calculated using the insurance industry standard;
the sum of claims and expenses divided by insurance revenue

5

Atradius | This is Atradius

Our 2016 performance at a glance
Total revenue

In EUR million

2016
2015
2014
2013
2012

1,761
1,718

1,627
1,578
1,602

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

Net investment result

In EUR million

2016
2015
2014
2013
2012

45

36

10

20

38

35

30
0

1,800

30

40

50

Expense Ratio

In %

36.4%

2016
2015
2014
2013
2012

35.9%

35.0%

33.5%

34.0%

34.5%

35.0%

36.6%

35.5%

36.0%

36.5%

37.1%

37.0%

37.5%

Claims ratio

In %

41.6%
43.5%
40.7%
45.6%

2016
2015
2014
2013
2012

0.0%

10.0%

20.0%

30.0%

40.0%

51.2%

50.0%

60.0%

Combined Ratio

In %

78.0%

2016
2015
2014
2013
2012

80.6%

77.3%

72.0%

74.0%

76.0%

78.0%

81.5%
80.0%

82.0%

86.2%
84.0%

86.0%

Result for the year

In EUR million

2016
2015
2014
2013
2012

114

0

50

88.0%

100

135

161

178

150

212

200

Equity250

In EUR million

1,626
1,500
1,393
1,287
1,196

2016
2015
2014
2013
2012

0

500

1,000

1,500

6

2,000

Atradius | This is Atradius

Ten years in figures
Financial information(in EUR million)

2016

Insurance premium
revenue

1,557.6

2015

2014

1,537.0 1,458.2

2013

2012

2011

1,412.1 1,439.8 1,403.4

2010

2009

2008(1)2007

1,345.6 1,468.6

1,616.4

1,148.6

Service and other income

203.1

180.8

169.0

166.4

161.8

150.5

Total revenue

1,760.7

1,717.8

1,627.2

1,578.4

1,601.6

1,553.8

36.0

37.8

35.1

30.3

31.1

22.7

1,753.8 1,665.0

1,613.5

1,632.0 1,584.9

1,523.4

Net investment result (2)Total income
Result for the year

45.0
1,805.6
211.8

178.2

161.2

197.8

225.4

166.9

1,500.7 1,666.4

155.1

1,841.8

1,315.5

134.5

113.6

129.8

124.9

1,393.0 1,286.9

1,196.3

1,129.8

1,035.2

47.8

79.7

1,734.7 1,889.6

68.3

1,395.2(113.3)(193.4)164.2

905.0 1,005.5

854.0

Balance sheet information(in EUR million)
Equity1,625.5 1,500.2

Total assets

4,391.5 4,250.2 4,130.9

Insurance contracts

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)

13.6%

12.3%

12.0%

10.8%

9.8%

12.0%

12.9% (12.0%)

Outstanding ordinary
shares (at year-end)

79.1

79.1

79.1

79.1

79.1

79.1

79.1

Dividend paid

71.2

64.9

53.8

43.5

43.5

25.3

Gross claims ratio

41.6%

43.5%

40.7%

45.6%

51.2%

Gross expense ratio

36.4%

37.1%

36.6%

35.9%

35.0%

3,697.8

3,737.2 3,580.1 3,285.2

3,389.7 4,021.0 2,840.3
1,508.1 2,166.9

1,232.1

Shareholders information(17.0%)

21.4%

79.1

79.1

56.6

-

-

25.3

-

49.7%

38.6%

85.2%

98.3%

39.4%

35.2%

35.4%

36.6%

34.1%

38.4%

Technical ratios

Gross combined ratio

78.0%

80.6%

77.3%

81.5%

86.2%

84.9%

74.0%

121.8%

132.4%

77.8%

Net claims ratio

42.0%

42.0%

42.6%

46.4%

49.1%

50.3%

44.6%

76.6%

96.9%

41.4%

Net expense ratio

35.4%

35.9%

35.8%

37.4%

37.5%

34.2%

39.3%

46.2%

32.3%

37.7%

Net combined ratio

77.4%

77.9%

78.3%

83.8%

86.7%

84.5%

83.9%

122.9%

129.2%

79.1%

3,169

3,161

3,139

3,107

3,143

3,149

3,171

3,488

3,863

3,366

Employees
Full-time equivalents (FTE),
at year-end (4)Credit ratings
A.M. BestA outlook stable

Moody’s

A3 outlook stable1) Including Crédito y Caución since January 2008
2) Consists of net income from investments and share of income of associated companies
3) Return on equity is defined as the result for the year divided by the time weighted average shareholders’ equity
4) Exclude FTEs from Graydon, Ignios and Gestifatura

7

Atradius | This is Atradius

Leading the future
All businesses operate in the ‘here and now’, but lasting success comes fromleading the future. So, while it’s vital that we provide our customers with credit
insurance, reinsurance, bonding, collections and information solutions today, ourconstant pursuit of improvement in how we interact with customers, brokers,
agents and the market in the years to come will guarantee that we continue
leading the market by building new ways of working together.
The world in which we do business is constantly evolving, which is why wedevelop new tools to help our customers stay ahead of the curve: creating new
solutions to meet their needs and thus increasing the value of the informationand services we deliver. Moreover, our expansion and new partnerships in world
markets that promise valuable future opportunities also ensure that we aremeeting those customers’ needs and giving them support to grow their business.
Our commitment to simplifying and improving our customers’ credit
management and helping them focus on genuine opportunities is evident fromour continued innovation in and enhancements to our products and services.
Put simply, our success is determined only by that of our customers. By helping
lead their success we ensure ours.

Leading the future through innovation
Every day, more data is recorded than was logged in the entire 20th century,and harnessing that data is essential to our customers’ future success. Business
management tasks that only a few years ago were handled manually can now be
automated, creating more efficient and effective operations. How business adapts
to this information-driven world will increasingly determine success and failure.
At Atradius we are constantly finding ways of advancing how we access, use andshare information and technology to make our customers’ credit management
programmes more effective. Through these innovations, we can not only improve
our customers’ risk protection but also help them grow their businesses.
Digitalisation is a trend that is gathering pace and impacting the dynamics ofglobal trade as we move towards a future state where almost all informationis readable by computers, where computers in separate organisations areconnected where businesses interact via digital flows. There has also been an
explosion in the volume and variety of data available and a rise in sophisticatedanalytical techniques to drill into and draw insight out of the data. These trends
are enabling new business models far greater efficiency and new ways of
producing value.

8

We are committed
to improving ourcustomers’ credit
management
and helping themfocus on genuine
opportunities.

Atradius | This is Atradius

Leading the future through expansion
Opportunities come in many forms, and every new opportunity is accompaniedby new risks. So, while filling a void with a new product or an innovation toan existing product can take business to new levels, entering new markets
potentially opens a business up to new hazards. Access to information aboutbuyers, their payment behaviour and protection against payment defaults
can make the difference between success and failure, which is why every year
we enter new agreements to improve our customers’ safe access to new andup-and-coming markets across the world. In this way, we can help lead ourcustomers to safer trade.

Leading the future through commitment
Atradius is a strong community in which everyone, through their actions – andtheir interactions - strives to have a positive influence on his or her colleagues.
But this community also embraces our customers, brokers and agents and has agenuine desire to help our customers and other business partners achieve theirgoals. That means travelling alongside them on their journey: experiencing
their milestones, celebrating their triumphs, standing alongside them throughtheir challenges and offering advice and support when plans go off course.
It is the closeness of these relationships that helps us anticipate our customers’
future needs so that we can help them achieve their aspirations by covering
their risks.
The strength of Atradius’ dedication is reflected in the loyalty of our customers,
and so it’s no surprise that we continue to lead the market in customer
retention. The positive energy we get from our customers, brokers, agentsand the market helps us to lead the future through innovation, expansion andcommitment.
Thank you for your trust.

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

A message from theManagement Board

Left to right: Christian van Lint, Andreas Tesch, Claus Gramlich-Eicher, Isidoro Unda, and Marc Henstridge

Dear stakeholder,2016 has been a successful year in which we have undertaken exciting
projects that position Atradius to continue leading the future in credit
management. Our ‘customer-first’ mind-set keeps us at the forefront of theindustry. This is evident from our financial results with a combined ratio of
78%, an 8.4% increase in shareholder’s equity to EUR 1,625 million, as well as
excellent customer retention levels of 93%.
As globalisation and digitalisation persist in transforming the face of world
trade, we continue to expand our business to make us even more responsive
to our customers’ needs and trading opportunities. One such tool focused onachieving this is Atradius Insights. An advanced online business intelligence
tool which can help our customers to manage their credit risk and portfolio.
The merger of the legal entities Crédito y Caución and Atradius Credit
Insurance into a single European Carrier is an important step in reducing
complexity within our organisation so that we can respond to our customers’
needs as a single streamlined organisation. This merger strengthens ourefficiency and the service we deliver as we operate as one legal entity within asimplified regulatory environment.

10

Our ‘customer-first’
mind-set keeps us
at the forefront of
the industry.

Atradius | A message from the Management Board

To boost our Credit Insurance business we opened an office in South Korea
in 2016, increasing our Asian footprint to 14 countries and enabling us
to support even more local and multinational businesses trading on thiscontinent. We also committed to acquire a 25% strategic equity stake in theCredit Guarantee Insurance Corporation of Africa Ltd. (CGIC). CGIC is theAfrican trade credit insurance leader with whom we have partnered withfor years to service our Global customers. This transaction will provide an
exciting opportunity to extend the market reach in South Africa and beyondfor both ourselves and CGIC.
Our Bonding business expanded operations into Belgium, Luxembourg and
the Netherlands, while our Collections business created a local presence inboth China and India. These expansions reinforce our strategy of being close
to our customers and delivering our service in the locations where they are
doing business.
Within a broader Credit Management context Atradius has made two
important acquisitions. We have increased our shareholding in Graydon
taking 100% control of the leading business information services provider
in the Netherlands, Belgium and the UK. We have also purchased an 80%
stake in Ignios – the Portuguese information company. Both acquisitions
will benefit our customers and Atradius through synergies that improve ourcredit management and collections services and strengthen our underwriting
capabilities. This move also provides opportunities for innovation in the areaof business analytics and insight.
With our eye on the future, we continue to harness digitalisation to improve
our customer experience. Digitalisation is a trend that is gathering paceand impacting the dynamics of global trade, as digital data flows enable themovement of goods and services. We are now doing business in a hyperconnected world where computers in separate organisations are connected
and businesses interact via digital flows. The digital age has also broughtwith it new types and vast quantities of data and given rise to the next level ofanalytics and artificial intelligence. Digitalisation offers many opportunities
to produce value, including greater efficiency, reduced costs, reduced errors,
new insight, innovation potential and new business models. We improved
our ability to do this through Atradius Insights, an advanced online businessintelligence tool that we developed together with our customers that can help
them manage their buyer portfolio and credit risks.
At Atradius, innovation has played a prominent role in our strategic agenda in2016 resulting in the design, development and pilot test of our new Customer
Portal – ‘Atrium’. This innovative platform will replace our current on-line tool
- Serv@Net - and transform the way that our customers and brokers interact
with us. ‘Atrium’ is based on streamlined, simplified and intuitive processes
designed from the customer’s point of view. It will be a single entry point for
all services that integrates key functionality such as credit limit and overdue
notification with analytics, insight, alerts and information. Feedback from themarket has already been extremely positive and we look forward to the rollout of Atrium in 2017.

11

We continue
to harness
digitalisation
to improve
our customer
experience.

Atradius | A message from the Management Board

People are our most important asset and during 2016 we continued to invest
in strengthening our corporate culture to foster a feeling of pride in what
we do throughout the organisation. The ‘I am Atradius’ campaign invited
Atradius staff from across the Group to say how they embody our Corporate
Values, while the ‘Do you know?’ campaign shared information and quotes
from key customers about why they value our service. This approach is crucial
to further cultivating our ‘customer-first’ mind-set ensuring that we always
deliver top-class customer experiences so that our customers see us as a true
business partner.
Our sound financial position is reflected in the strong credit ratings assigned
to the Atradius Group by A.M. Best (‘A-excellent, outlook stable) and Moody’s(‘A3’, outlook stable), an indication of our strong competitive position within
the global credit insurance market, very good financial performance, robust
capitalisation and low financial leverage.

Outlook
The outlook for 2017 is that the rate of global economic development will
increase but growth figures are still below historical averages. Economic
conditions will remain challenging as a result of political uncertainties andinsolvency forecasts remain subdued, especially in the context of rising
uncertainty surrounding Brexit. Balancing these factors to manage risk will
be demanding and at Atradius we will use our wealth of expertise to guide ourcustomers toward profitable trade and business growth.
As well as guiding our customers we will continue to focus on our own
business to ensure we maintain our strong capital position and wellcapitalised operating entities so that we can withstand financial stress, meet
our financial obligations and ultimately deliver shareholder value. We willcontinue on our journey to transform and ensure our business is future-proof
as we invest in projects that will take our global IT systems to the next level
and we will – as always – dedicate thought, time and effort to providing thebest service for our customers.
The Management Board would like to thank our customers, brokers, agents,
reinsurers, business partners, and employees for contributing to our strong
results in 2016 and we look forward to working with you, helping you growyour business and leading the future for years to come.

The Atradius Management Board
Isidoro Unda (Chairman)
Andreas Tesch
Christian van Lint
Claus Gramlich-Eicher
Marc Henstridge

12

Global economic
development
will increase but
below historical
averages.

Leading the future

13

Atradius  |  Business profile

Products, services
and brand
At Atradius we understand that every
business is unique. That’s why we design
our products in a flexible modular
format, being tailored to meet eachcustomer’s specific needs and mirror theway they do business.
Expanding our credit insurance offering withresponsible underwriting
Our product - credit insurance - provides cover for financial losses arisingwhen a customer’s buyer can’t or won’t pay for goods and services boughton credit.
Our strategy is to focus on a range of business segments: offering credit
insurance tailored to the needs of small and medium-sized enterprises(SMEs), medium-sized and large local companies, and multinational
corporations.
For multinationals we offer a sophisticated and tailored credit management
solution in the form of our Global policy. As a market leader and pioneer with
20 years of experience in this segment, Atradius Global has developed an
excellent understanding of the needs of multinationals.
Customers can choose between a credit insurance policy with standard terms
and conditions, serving both the parent company and all its subsidiaries,
stand-alone policies that accommodate varying performance levels andcountry conditions, or a combination of both.
Our dedicated global account teams are situated across the world, providing
extensive cross-border customer service. Dedicated underwriters ensure
consistent high quality decision making on the buyer portfolio of ourglobal customers.
For our large and medium-size customers we offer a flexible modular credit
insurance policy that gives protection against non-payment and allows theterms of cover to be adapted to each customer’s needs. In this way, covercan be adapted to fit all kinds of businesses, large and small, doing businessdomestically or across the world.

14

Our strategy is
to focus on a
range of businesssegments:
offering credit
insurance
tailored to theneeds of ourcustomers.

Atradius  |  Business profile

To meet the many different demands of SMEs we have created a range of SME
products, all of which are characterised by their simplicity.
We realise that traditional credit insurance cover, on a ‘whole turnover’ basis,
may not be the right solution for every company. That is why we offer a range ofstructured credit risk solutions for specific large and complex transactions. These
solutions address a range of circumstances, from enhanced credit protection for
single contracts or buyers to pre-export finance, and can be combined to meet
multiple needs.

Insuring the insurers
Atradius Reinsurance DAC (Atradius Re) is the leading specialised credit andbonding reinsurer in the market, offering reinsurance solutions for the credit
insurance and bonding business of primary insurers around the world, throughits dedicated team of underwriters. The combination of the skills of a reinsurer
with the experience of a leader in credit insurance and bonding reinforces
Atradius Re’s most developed proposition to the market. The reinsurance
business is underwritten by a dedicated team of specialist underwriters based in
Dublin at Atradius Re.

An extensive range of bonding products
A bond protects a beneficiary if the supplier - our customer - fails to meet its
contractual obligations. Our range of bonding products puts customers in astronger financial position when dealing with their business partners. We are
currently offering administrative (i.e. excise, customs and authorisation bonds)
and market bonds (i.e. bid, performance and maintenance bonds) in traditional
sectors like construction, engineering and travel. There is also a growing
demand for bonds in new sectors such as environmental services and Atradius
is innovating in the issuing of electronic bonds. Atradius Bonding has business
units active in Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg,
the Netherlands, Norway, Spain and Sweden and is also issuing bonds from avariety of other countries.

Covering the risks of multiple instalment agreements
Atradius Instalment Credit Protection (ICP) covers short and medium-termrisks involved in multiple instalment agreements with private individuals andbusinesses. Consumer credit, leasing and renting have always been part of our
product offering, while more recently we have added residential real estate
insurance products for co-ownerships and for rental guarantees. Since 2014
we have seen rapid growth in the market for private car leasing while our new
product - B2C Protect - will be offered to customers in the construction sector toprotect against payment default by home owners. These services are offered tofinancial and corporate policyholders in Belgium and Luxembourg.

15

Atradius isinnovatingin the issuingof electronicbonds.

Atradius  |  Business profile

Skilled and sensitive debt collections
Atradius Collections helps businesses - both insured and uninsured - to collectdomestic and international trade debts while maintaining sound business
relationships with their clients. It has built a strong reputation as a dedicatedbusiness-to-business specialist, leveraging the strength of Atradius Credit
Insurance, combined with its own integrated international network of collectors,
lawyers and insolvency practitioners as well as its online capabilities.
Since 2015 Atradius Collections has also offered a first party collections service,so that customers can outsource their reminder process immediately after due
date. A range of services has been created for the financial industry, including
back-up servicing, cross border collection and invoice verification, allowing
factoring companies and asset based lenders to investigate whether the business
transactions and/or invoices from their client are acknowledged by the buyer
and that the buyer intends to pay. Clients benefit from Atradius Collections’worldwide expertise, with local staff in 25 countries.

Working with the Dutch State
Atradius Dutch State Business (ADSB) is the Export Credit Agency of The
Netherlands. ADSB provides credit insurance and guarantees to Dutch exporters
and to banks financing Dutch exports. On behalf and for the account of the Dutch
State, ADSB provides cover for risks related to infrastructure projects and theexport of capital goods that are not covered by the private market ADSB is awareof and welcomes the initiative of the Dutch State to improve the coordination of
the Dutch Export activities.

Business Intelligence
Atradius offers business intelligence services through several companies
including: Iberinform in Spain, Graydon in the Netherlands, Belgium and UK,
Informes in Mexico and Ignios in Portugal. The strategies of these companies isclosely aligned with Atradius in that they collect and manage large volumes ofdata, add value through sophisticated analytics and expertise and use this to help
customers to enable trade, manage risk and grow their business.
Through these companies we are able to offer our customers a range of businessinformation solutions which can help them to make smart business decisions
in several areas of their business including: credit management, risk andcompliance and marketing.

16

We are able
to offer ourcustomers businessinformation
solutions which canhelp them makesmart businessdecisions.

Atradius  |  Business profile

Global footprint
EuropeAustria
ViennaBelgium
Namur, Antwerp
Czech Republic Prague
Denmark
Copenhagen, Århus
FinlandHelsinkiFrance	Paris, Bordeaux, Compiègne, Lille, Lyon, Marseille,
Rennes, Strasbourg
Germany	Cologne, Berlin, Bielefeld, Bremen, Dortmund,Düsseldorf, Frankfurt, Freiburg, Hamburg, Hanover,
Kassel, Munich, Nuremberg, Stuttgart
GreeceAthensHungary
Budapest
Iceland
Reykjavik
IrelandDublinItaly
Rome, Milan
Luxembourg
Luxembourg
Netherlands
Amsterdam, Ommen
NorwayOslo
PolandWarsaw, Krakow, Poznan, Jelena Gora
Portugal
Lisbon, Porto
RussiaMoscow
Slovakia
Bratislava
Spain	Madrid, Alcalá de Henares, Alicante, Barcelona, Bilbao,
Castellón, A Coruña, Girona, Las Palmas de Gran
Canaria, Málaga, Murcia, Oviedo, Pamplona, Sevilla,
Tarragona, Terrassa, Valencia, Zaragoza
SwedenStockholm
Switzerland
ZurichTurkeyIstanbul
United Kingdom	Cardiff, Belfast, Birmingham, London, Manchester
Middle East
IsraelLebanonSaudi Arabia
United ArabEmirates

Tel Aviv (1)Beirut (1)Riyadh (1)Asia

Dubai (1)China	Beijing, Guanzhou, Nanjing,
Shanghai (2)Hong Kong
Hong Kong
India
Mumbai, New Delhi, Kolkata (2)Indonesia
Jakarta (2)
Japan
Tokyo
Malaysia
Kuala Lumpur (1)Philippines
Manila (1)Singapore
Singapore
South Korea
Seoel (2)TaiwanTaipei (1)Thailand
Bangkok (2)VietnamHanoi (1)Americas
Argentina
Buenos Aires (1)BrazilSão Paulo
Canada	Almonte (Ontario), Mississauga(Ontario), Pointe Claire (Quebec)
Chile
Santiago de Chile (1)MexicoMexico City, Guadalajara, Monterrey
Peru
Lima (1)USA	Baltimore (Maryland), Chicago(Illinois), Dallas (Texas), Los Angeles(California), Morristown (New
Jersey), New York (New York)17

AfricaKenya
South Africa
Tunisia

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

18

(1)

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

 ervice establishment and co-operation
Sagreement with local partner

Atradius  |  Business profile.

Atradius Group
organisation
General overview as at 31 December 2016

Atradius N.V.
The Netherlands

Atradius Collections
Holding B.V.
The Netherlands

Atradius Insurance
Holding N.V.
The Netherlands

Atradius Collections
operating companies
and branches

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

Office locations:
Australia
Hungary
Belgium
Ireland
BrazilItaly
CanadaMexicoNetherlands
China
Czech Republic Poland
Denmark
Spain
FranceSingapore
Germany
United Kingdom
Hong Kong
USA

Atradius Finance B.V.
The Netherlands

Crédito y Caución Seguradorade Crédito e Garantias S.A.
Brazil
Iberinform Internacional S.A.u.
Spain

Atradius Investments Ltd.
IrelandBranches:
Australia
Japan
Austria
Luxembourg
Netherlands
Belgium
CanadaNew ZealandCzech Republic Norway
Denmark
PolandFinland
Portugal
Singapore
FranceGermany
Slovakia
SwedenGreeceSwitzerland
Hong Kong
Hungary
TurkeyIrelandUnited Kingdom
Italy

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

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

Atradius Rus Credit
Insurance LLC Russia

Belgium
China
Denmark
FranceGermany
India
Indonesia
Ireland
Italy
Japan

Atradius Information
Services B.V.
The Netherlands
Atradius Dutch StateBusiness N.V.
The Netherlands

MexicoNorwayRussiaSouth Korea
Spain
SwedenSwitzerland
Thailand
United Kingdom

Graydon Holding N.V.
The Netherlands
Office locations:

Graydon operatingcompanies

Belgium
Netherlands
United Kingdom

19

Atradius Participations
Holding B.V.
The Netherlands
Atradius
Participations

Leading the future
through innovation

20

Atradius | Corporate Governance

Report of theSupervisory Board
The global economy in 2016 did not pick up the pace as expected in 2015
with difficult economic conditions in particular in emerging markets
and stagnating growth among advanced markets. Compared to 2015, theEurozone growth slowed slightly, although all member states except Greece
were growing in 2016. Growth in emerging markets also weakened further
in 2016. This was mainly driven by a slowdown in the Chinese economy
and difficulties in the economic situation in Brazil and some other Latin
American countries. The lower growth rates in advanced markets resulted
in more or less the same level of insolvencies in 2016 as in 2015 although astrong improvement could be seen in the Eurozone including Spain and theNetherlands. Other advanced markets showed stable or worsening conditions.
For 2017, however an improvement of global growth is expected but
compared to historical averages still remains low. As commodity prices areslightly picking up, so will the emerging markets growth. For advanced
markets in general the business environment is expected to improve slightly
and no significant changes to insolvencies are expected.
Atradius in 2016 achieved an excellent profit of EUR 211.8 million: 18.8%
more than in 2015, with a notable contribution from the Spanish market, ourmain region. Total Revenue grew by 2.5%, strengthening our presence bothin Western Europe as well as in the new markets. Also our risk acceptancerose resulting in a 4.3% increase of the total potential exposure allowing us to
support our customers’ growth. Atradius also managed to further strengthen
its shareholders’ equity to EUR 1,625.5 million, growing by EUR 125.3 million.
These good figures are the result of the activities developed by Atradius. This
year Atradius further progressed in projects focusing on growth and customer
service, such as the “Trade Finance Project”, that aims to enable financing,particularly of SMEs. Furthermore, Atradius focused on supporting andmonitoring the new agent models and other alternative distribution channels
and “WEBond”, which is a multi-year project to deliver a single IT platform forthe bonding business. With an eye for the future Atradius, also in 2016, wasfocused on innovation and digitalisation; in that regard it has designed andimplemented an innovative Customer Portal, providing a state of the art way
for customer interaction incorporating our customers’ demands.
In 2016 Atradius took a major step in streamlining its organisation byeffectuating the cross border merger of its two European credit insurance
entities, Atradius Credit Insurance N.V. (ACI) and Compañia Española deSeguros y Reaseguros de Crédito y Caución, S.A. (CyC) into one: Atradius
Crédito y Caución S.A. de Seguros y Reaseguros (ACyC). This merger will
strengthen the efficiency and service to our customers, working as one entity
within a simplified regulatory environment, without impacting the successful
existing business model.

21

Our risk acceptancerose resulting ina 4.3% increase of
the total potential
exposure.

Atradius | Corporate GovernanceAtradius enhanced its Asian credit insurance footprint to 14 countries by
setting up a South Korean office to further support local and multinational
business demand. Atradius also committed to acquire a 25% stake in Credit
Guarantee Insurance Corporation of Africa Ltd., based in South Africa, tofortify and expand its presence on the African continent. Furthermore
Atradius has taken full control over Graydon Holding N.V., the leadingbusiness information service provider in the Netherlands, Belgium andthe UK and acquired an 80% stake in Ignios Gestão Integrada de Risco
S.A. and Gestifatura Ltda., respectively, a Portuguese information andcollections company. These acquisitions will further enhance Atradius’ credit
management, information services and collections offerings to our customers.
With regards to the Solvency II regulation, Grupo Catalana Occidente (GCO),
as parent company of Atradius, has formally submitted the partial internal
model for credit and suretyship line of business for approval to the Collegeof Supervisors, and following the merger between ACI and CyC an amended
partial internal model for credit and suretyship line of business has been
submitted for approval to the College of Supervisors at the beginning of 2017.
The full Supervisory Board convened five times during 2016 and the Audit
Committee 4 times, while the Remuneration, Selection and Appointment
Committee convened 3 times.
As in previous years, both the Management Board and the Supervisory Board
participated in Atradius’ annual Permanent Education Programme. In 2016
this programme covered, amongst other topics: Bonding, Spanish Corporate
Governance Framework, IFRS Status 4 including comparison of current IFRS
and Solvency II and Atradius’ Global unit.
The Supervisory Board and in particular the Audit Committee was closely
involved with and was regularly updated on all developments within
Atradius in order to meet the Solvency II requirements. As in previous
years, the Supervisory Board was also involved in the review of theRemuneration Policy.
As per 1 January 2017, Marc Henstridge has been appointed as Chief
Insurance Operations Officer to take over the position of Dominique
Charpentier who retired after a successful career stretching over 15 years with
Atradius. Furthermore as per 1 January 2017, José Ruiz, resigned as memberof the Supervisory Board to enjoy his retirement after being a member of
the Supervisory Board for many years. The Supervisory Board wishes tothank Messrs. Charpentier and Ruiz for their valuable contributions andcommitment to Atradius. Moreover the Supervisory Board welcomes Messrs.
John Hourican, José María Sunyer and Carlos Halpern as new members of theSupervisory Board and wishes them all the success in their new positions.
Atradius N.V.’s Annual Report contains the financial statements for thefinancial year 2016, audited by Deloitte Accountants B.V., and has beenpresented to the Supervisory Board by the Management Board. The
Supervisory Board has approved the annual report and advised the General
Meeting to adopt the financial statements for 2016.

The Supervisory Board
Ignacio Álvarez
Chairman

22

The Supervisory Board
would like to thank theManagement Board andall Atradius employees
for the excellent results
achieved in 2016 as
well as all customers forcontinuing to trust theirbusiness to us. Finally,
the Supervisory Board
is confident that the
Atradius management
team and employees willcontribute to anothersuccessful year in 2017.

Atradius | Corporate Governance

Shareholder structure
Atradius is part of Grupo Catalana
Occidente. It is the international brandof the credit insurance business.
Shareholder structure of Atradius N.V., since 2011:
Shareholder 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, SA 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 Compañia 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)

2016

2015

% change
2015/2016

Long-term capital market value

3,508.5

3,262.5

7.5%

Equity2,629.8

2,585.9

1.7%

Subordinated debt

204.9

211.8

-3.3%

Return on long-term capital

12.6%

12.1%

Funds under management

11,672.1

11,055.8

5.6%

Total revenue

4,235.8

3,826.1

10.7%

324.5

296.1

9.6%

Consolidated result23

Atradius | Corporate GovernanceGrupo Catalana
Occidente
One of the leaders in the Spanish insurance sector and in global credit insurance. Founded more than 150 years ago, it
has experienced constant growth, thanks to its capacity to adapt 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
20,000 insurance
brokers

More than
1,500 branches

Presence inmore than 50
countries

More than
6,500 employees

More than€4,000 million
turnover

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

24

Atradius | Corporate GovernanceTraditional 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

Companies

Bonding

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.

25

Atradius | Corporate Governance

Delivering structure andaccountability
Atradius endorses the importance ofsound corporate governance.
Key elements of independence, accountability and transparency create a
relationship of trust between Atradius and all of its stakeholders – customers,
shareholders, employees, suppliers and the general public.
Atradius N.V. is a limited liability company organised under the laws of
the Netherlands with a Management Board and a Supervisory Board. The
Management Board is responsible for achieving the Company’s objectives,
strategy, policy and results and is guided by the interests of the Company
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.
Isidoro Unda - Chairman and Chief Executive Officer
Andreas Tesch - Chief Market Officer
Christian van Lint - Chief Risk Officer
Claus Gramlich-Eicher - Chief Financial Officer
Marc Henstridge - Chief Insurance Operations Officer
CVs of each of the Management Board members and our former Management
Board member, showing their roles, background and experience are available
on our website.
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, and ensuresthat Atradius has in place an effective risk management system, internal
control system and internal audit function. The annual business plan andbudget of Atradius are submitted to the Supervisory Board for approval. The
Management Board rules describe the (allocation of) duties and the decisionmaking process of the Management Board.

26

Atradius | Corporate Governance

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, basedon the recommendation of the Remuneration, Selection and Appointment
Committee of the Supervisory Board and in accordance with the
remuneration policy adopted by the General Meeting. Information regarding
the amount of remuneration received by Management Board members can befound in the explanatory notes to the consolidated financial statements of theAnnual Report 2016.
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 asa conflict of interest. A member of the Management Board will not participate
in any deliberations or decision-making process of the Management Board
if such member of the Management Board has a direct or indirect personal
interest which conflicts with the interest of the Company or its business. In
such case the other non-conflicted members of the Management Board willpass the resolution. If all members of the Management Board are conflicted,
then the Supervisory Board will pass the resolution.

27

Atradius | Corporate Governance

The Supervisory Board
Composition
The Supervisory Board of Atradius N.V. currently consists of ten members.
Ignacio Álvarez, Chairman
Francisco Arregui, Vice-Chairman
Bernd Meyer
Dick Sluimers
Xavier Freixes
Hugo Serra
Désirée van Gorp
John Hourican
Carlos Halpern
José María Sunyer
CVs of each of the Supervisory Board members and our former Supervisory Board
members, showing their background and experience 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 theSupervisory Board.
The General Meeting has the authority to appoint the members of the Supervisory
Board on the recommendation of the Remuneration, Selection and Appointment
Committee of the Supervisory Board. A Supervisory Board member may besuspended or dismissed by the General Meeting at any time. The Supervisory
Board shall consist of at least five members. Supervisory Board members shallresign according to a rotation scheme determined by the Supervisory Board
pursuant to which each Supervisory Board member shall resign after a maximum
period 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 the Supervisory
Board to best carry out its various responsibilities. The current members of theSupervisory 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, ensures the adequate performance of theSupervisory Board and its committees, ensures the annual evaluation of thefunctioning of the members of the Management Board and the Supervisory
Board, and acts on behalf of the Supervisory Board in serving as the principal
contact person for the Management Board. The Chairman of the Supervisory
Board is assisted in his role by the Company Secretary.

28

Atradius | Corporate GovernanceCommittees of the Supervisory Board
The committees of the Supervisory Board are set up to reflect both the Dutch
corporate standards and the specific interests of the business of Atradius. As
risk management is considered to be a key area for attention, the Supervisory
Board considers it important that this subject is discussed by the fullSupervisory Board, rather than in a specific risk committee. All risk subjects
dealt with in meetings of the Supervisory Board are chaired by Mr. B. Meyer.

Audit Committee
The Audit Committee supports the Supervisory Board in fulfilling its
supervisory and monitoring duties with respect to the assurance of theintegrity of the Company’s financial statements, the external auditor’squalifications, and the performance of internal and external auditors. The
Audit Committee monitors, independently and objectively, the financial
reporting process within Atradius and the system of internal controls. The
Audit Committee also facilitates the ongoing communication between theexternal auditor, the Management Board, the internal audit department andthe Supervisory Board on issues concerning the Company’s financial position
and financial affairs. In 2016, the Audit Committee met four times. The Audit
Committee currently consists of Xavier Freixes (Chairman), Francisco Arreguiand Dick Sluimers.

Remuneration, Selection
and Appointment Committee
The Remuneration, Selection and Appointment Committee supports theSupervisory Board in fulfilling its supervisory and monitoring duties withrespect to proposals for the appointment of members of the Management
Board and the Supervisory Board, the remuneration policy, the remunerationof senior management and other corporate governance matters. In 2016, theRemuneration, Selection and Appointment Committee met three times. The
Remuneration, Selection and Appointment Committee currently consists ofFrancisco Arregui (Chairman), Ignacio Álvarez and Hugo Serra.
Remuneration
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 are reimbursed for their expenses. Information regarding
the amount of remuneration received by Supervisory Board members can befound in the explanatory notes to the consolidated financial statements of theAnnual Report 2016.
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 asa conflict of interest. A Supervisory Board member will not participate in any
deliberations or decision-making process of the Supervisory Board, if such
Supervisory Board member has a direct or indirect personal interest whichconflicts with the interest of the Company or its business. In such case theother non-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.

29

Atradius | Corporate Governance

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 today-to-day 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 that the external auditor is notappointed to render non-audit services that are listed explicitly as prohibited
services in the Atradius Compliance Code on Auditor Independence.
The General Meeting appointed Deloitte Accountants B.V. as the Company’s
external auditor for the financial year 2016 on 8 June 2016.

30

Leading the future
through expansion

31

Atradius | Consolidated management report

The global economic
environment in 2016
Global growth bottoming out.
Global growth remained sluggish in 2016, with difficult economic conditions
in many emerging markets and stagnant growth in advanced markets. As aresult global growth fell to 2.5%, down from 2.9% in 2015, but is expected topick up again slightly to rise slowly to circa 2.8% in 2017.

Advanced markets
Growth in advanced markets weakened in 2016. Eurozone growth slowed
somewhat compared to 2015 due to lower external demand and weakened
investment growth. However, consumer spending kept its momentum on theback of employment growth and low inflation. The unemployment rate fellslightly to 9.8% in November compared to 10.4% at the beginning of the year.
All member states economies, except that of Greece, grew last year. However,Eurozone growth is still unevenly distributed, with Southern European
member states lagging behind their Northern European counterparts. Spainis the clear exception in southern Europe: it showed robust growth of 3.2% in
2016, although economic activity is recovering from a low level.
New ECB monetary policy stimulus caused a further decline in interest rates
and a loosening of financial conditions in 2016. This reduced funding costs
for companies and made it cheaper for consumers to borrow. As a result,borrowing in the Eurozone gradually increased, while banks also slowly
started to relax their credit conditions, making it easier to obtain loans. Bank
lending recovery was relatively weak in southern Europe, reflecting highlevels of non-performing loans and weak balance sheets.
Economic growth in the United States is among the most robust acrossdeveloped markets. The economic recovery was weaker than expected,
however, causing growth to ease to 1.6%, compared to 2.6% in 2015. Inventory
declines, muted investment growth and weak trade were behind this. Private
consumption, which accounts for more than two-thirds of the US economy,
remained strong. Unemployment is closing in on its pre-crisis level and thelabour force participation rate is slowly increasing.
Regional real
growthRegional
realGDPGDP
growthPercent changechangep.a.
p.a.
Percent
9
6
3
0
-3
-6
2008

2010
World

2012
Advanced economies

2014

2016
Emerging economies

Source: IHS

32

Global growthis expected topick up again to2.8% in 2017.

Atradius | Consolidated management report

Emerging markets
Growth in emerging markets weakened further in 2016. The Chinese
slowdown and the difficult economic situation in Brazil and a few other Latin
American countries in particular pushed the emerging market growth rate
towards that of advanced economies.
International trade showed muted growth, as China rebalances frominvestment-driven growth toward a more inward-looking consumption-led
growth. Trade growth was very low in Asia, slowed considerably in Latin
America and even shrank in Eastern Europe. Countries that rely heavily oncommodity exports faced economic headwinds as a result of the drop incommodity prices, while falling external demand and low commodity prices
restrained economic growth in many emerging markets.
The easing of US GDP growth has spilled over to its trading partners, inparticular Mexico and Central America.
But there was also some positive news. Financial pressures caused by thewithdrawal of capital from emerging markets alleviated somewhat following
the Brexit vote. Investors became convinced that loose monetary policy inadvanced markets would not end soon. Net importers of commodities suchas oil, steel and coal benefitted from yet another year of record-low prices,
providing stimulus to domestic demand. Among these net importers aremany Latin American countries. Economic growth in Central and Eastern
Europe remained high due to the Eurozone recovery, which translated intohigher exports and more inward investment, as well as reduced the pressure
on Russia.
Global commodity
commodity prices
GlobalpricesPriceindex,
index,2005
2005=100
Price
= 100
700
600
500
400
300
200
100
0
2008

2010
Metals

2012
Iron ore

2014

2016

Copper

Source: IHS

33

Emerging markets
growth rate pushed
towards that ofadvanced markets
in 2016.

Atradius | Consolidated management report

Another difficult year for insolvencies
Lower growth rates in advanced markets kept the level of insolvencies
more or less flat in 2016 compared to 2015. The strongest improvement wasseen in Eurozone countries, like Spain and Portugal, which are recoveringfrom high insolvency rates. The Netherlands and Belgium, with their strong
economic recoveries, also saw insolvency rates improve. Financial conditions
for businesses generally improved across advanced markets. However,insolvency levels remained elevated in many Eurozone countries – especiallyin Southern Europe – and financial conditions were still far behind the benign
environment before 2008.
Other advanced markets faced stable or worsening conditions. Insolvencies
in the US rose due largely to the strong US dollar and weak oil prices, which
lowered investment. Despite the Brexit referendum, the UK has continued toexperience a relatively stable business environment and insolvencies rose
only slightly. Other advanced markets, especially Norway and in the AsiaPacific region, faced less comforting economic conditions as they still sufferfrom the combined impact of low commodity prices and China’s gradually
decreasing growth.
Emerging markets faced another difficult year with insolvencies up in
Russia, Brazil and China. In addition to these large markets, the businessenvironment in many smaller countries worsened in line with the poorer
economic conditions. One notable exception to this trend is India, which saw
an improvement in insolvency conditions as the economy grew robustly.

Outlook for 2017
Global growth is expected to pick up slightly in 2017 to 2.8%. Across emerging
markets, growth is expected to recover as commodity prices recover to someextent. In Latin America, Brazil is forecast to improve significantly. Mexicoand other Central American countries are vulnerable to protectionist and antiimmigration measures by the US Administration. In Eastern Europe, Russia is
expected to return to growth and this will help to push up Eastern European
figures. Asia, supported by India and China, will continue to constitute theengine of global growth.
Emerging markets may endure some financial pressure from US monetary
policy tightening. Advanced markets are expected to maintain their growthrate. Eurozone growth is expected to cool slightly, resulting largely froma negative spillover from the Brexit referendum, which is also likely tosuppress UK growth. US growth is forecast to accelerate on the back of higher
domestic demand and investment.
For advanced markets as a whole, the business environment will remain
more or less stable with no significant changes to insolvencies expected.
The UK is likely to see the strongest rise in insolvencies, as uncertainty
surrounding the negotiations with the EU and the adverse effects of the weakpound really kick in. This will also have moderate negative knock-on effects
on other EU countries.
Overall, the picture for 2017 is that global growth will pick up slightly, but also
remain low compared to historical averages. Economic conditions therefore
remain challenging.

34

No significant
changes toinsolvencies
expectedin advanced
markets.

Atradius | Business performance

Stable growth in an
unstable businessenvironment(EUR thousands)

2016

2015

1,684,984(701,147)(613,391)(140,062)
230,384
79,102(70,471)
8,631
44,968283,983
211,772

1,658,459(721,731)(616,082)(102,957)
217,689
63,261(55,307)
7,954
36,016261,659
178,221

Gross
2016

2015

2016

2015

41.6%
36.4%
78.0%

43.5%
37.1%
80.6%

42.0%
35.4%
77.4%

42.0%
35.9%
77.9%

Insurance revenue
Gross insurance claims and loss adjustment expenses*
Gross insurance operating expenses*
Reinsurance result
Insurance result
Service income*
Service expenses
Service result
Net investment result**
Operating result before finance costs
Result for the year (after tax)

1.6%
2.9%
0.4%
(36.0%)
5.8%
25.0%(27.4%)
8.5%
24.9%
8.5%
18.8%

* Overview includes inter-segment revenue and (claims) expenses** Consists of net income from investments and share of income of associated companies

Claims ratio
Expense ratio
Combined ratio

Net

Revenue by business segment
6%
7%

5%

82%

Credit Insurance (including ICP)
Reinsurance
BondingServices

35

Atradius | Business performance

In 2016 Atradius once again achieved strong results despite the challenges
posed by the economic slowdown, anaemic growth and overall uncertainty.
The profit for the year was EUR 211.8 million which was supported by a 1.6%
increase in insurance revenue compared to 2015. Gross claims ended at
EUR 701.1 million, down 2.9% on 2015 along with gross insurance expenses
which decreased 0.4% to EUR 613.4 million. The gross combined ratio, as aresult, ended at an excellent 78.0%.
Our credit insurance business performed well in 2016, with ongoingstrong performance in Southern Europe. Spain, which is our largest credit
insurance market, continues to show stable performance despite pricepressure driven by the competitive environment.
The markets in Northern Europe, Asia and Oceania showed encouraging
revenue growth, in line with our ambition to expand in these regions
despite negative foreign exchange developments. Claims costs in 2016
saw a steady inflow of medium sized claims, influenced by a weakened
insolvency outlook in many markets such as Brazil and deteriorating
payment practices in the Middle East.
The Global unit performed well with an increase in revenue whilst Special
Products experienced a slight decline, both of which however experienced
deterioration in claims. Finally, the other Atradius insurance products
such as Bonding grew and while Reinsurance revenues saw a slightdecrease compared to 2015, they also showed notable improvement in theclaims ratio.
The Atradius gross insurance operating expenses in 2016 amounted to EUR
613.4 million with the cost ratio improved compared to 2015. The direct
operating expenses include costs related to changes in the company’s legal
entity structure. Brokerage fees increased 1.0%, in line with the overall
growth in insurance revenue.
The reinsurance of the Group remains primarily under a single quota sharecontract with the retention remaining at 57.5%. The cost of reinsurance was
EUR 140.1 million, an increase of EUR 37.1 million compared to 2015, largely
explained by lower claims recovered in line with lower claims expenses
in 2016.
Services achieved a positive result of EUR 8.6 million this year, an increase
from 2015 driven by strong performance in Service income. Our Collections
unit saw positive growth in service income as a result of growth inmarket share of our non-insured collections products and in part due todeterioration in the solvency environment.
The net investment result, including the share of income of associatedcompanies, ended at EUR 45.0 million, an increase of 24.9% compared to2015. The persistent low yield environment and less realised gains, werepartially offset by increased dividend income and the revaluation of ourexisting 45% stake in Graydon after the acquisition of the remaining 55%.
In addition the steady cash inflow from the Group’s insurance business
contributed positively to the growth of our investment portfolio.

36

Strong results
despite theeconomic
slowdown,
anaemic growthand overall
uncertainty.

Atradius | Business performance

Credit insurance including Instalment Credit Protection (ICP)(EUR thousands)
Insurance premium revenue
Information income
Insurance revenue
Gross insurance claims and loss adjustment expenses*
Gross insurance operating expenses*
Result before reinsurance
Reinsurance result
Result after reinsurance
Total credit insurance and ICP gross claims ratio

2016
1,316,365
127,396
1,443,761(600,704)(510,594)
332,463(113,342)
219,12141.6%

2015
1,300,484
121,454
1,421,938(622,395)(507,846)
291,697(68,786)
222,911
43.8%

1.2%
4.9%
1.5%
3.5%
(0.5%)
14.0%(64.8%)(1.7%)
4.9%*Overview includes inter-segment (claims) expenses

Credit Insurance & ICP Revenue by Region
47%

Asia
5%
7%
3%

Northern Europe
Southern Europe
OceanaAmericas38%

Credit insurance is Atradius’ core product by premium, comprising traditional
credit insurance for both domestic and export trade and the structured credit
and political risk business of our Special Products team.
Global economic growth was weak in 2016, weighted down by low commodity
prices, emerging market weakness, subdued demand in advanced markets
and increasing uncertainty. Spain however has shown robust growth of 3.2%
in 2016, although economic activity is recovering from a low level. Although
the modest Eurozone recovery is expected to continue to show moderate
growth, the outlook is increasingly uncertain. The UK growth outlook in 201617 has been slashed due to fears of the impact of the Brexit decision. Businesssentiment in the US is also expected to restrain domestic growth. The effectsof low oil prices, the slowdown in China and tighter financing conditions
continue to weigh on prospects for many emerging markets this year.
Atradius’ credit insurance business showed consistent performance in 2016,
with a result before reinsurance of EUR 332.5 million, 14.0% higher than2015. Insurance revenues reported a 1.5% increase coming from 2015 (2.6% atconstant foreign exchange rates). Claims improved slightly despite pressure
from a steady inflow of medium-sized claims. This improvement in claims
however resulted in lower recoveries from reinsurers. While credit conditions
are loosening further in most advanced economies, the insolvency outlook
has also weakened for some of these. Lastly, the operating expenses increased
marginally by 0.5%, largely due to the non-recurrent costs related to changes
in the company’s legal entity structure.
The global economy suffered from heightened uncertainties in 2016. Against
this background, we continued to provide cover to our customers around theworld. Our total potential exposure (TPE) in 2016 increased by 4.3% to EUR
587 billion. The top three regions for exposure concentration did not change
compared to last year.

37

While credit
conditions areloosening further
in most advanced
economies, theinsolvency outlook
has also weakened
for some of these.

Atradius | Business performance

In relative terms, we saw the highest concentration increase in the Americas andEurope. All our buyer regions in Europe contributed to the increase in exposure,
except for Turkey following the deteriorating economic environment and geopolitical
headwinds, and for the UK due to the depreciation of the GBP after the Brexit vote.
Our exposure in Africa remained stable compared to last year, whereas in the Middle
East it contracted given the mounting political and economic uncertainties andconcerns about oil price volatility. In China, our exposure increased moderately,
responding to the slow but steady domestic economic rebalancing.
The concentration of exposure by trade sector remained fairly stable. Around 72%of the Group’s TPE is in seven trade sectors: chemicals, construction, consumer
durables, electronics, food, metals and transport. In 2016 our exposure in agriculture
and consumer durables rose due to increased business levels of existing and newcustomers whilst exposure in metals decreased.
Our initiatives to meet customers’ needs were rewarded with improved customer
retention. Overall our credit insurance portfolio reported healthy growth.
Germany, one of our largest markets within Europe delivered revenues in line with2015. The other markets in Northern Europe showed a more diversified pattern. The
United Kingdom maintained consistent performance with 2016 revenues in line with2015 at constant foreign exchange rates. Reported revenues were however impacted
by the British pound’s performance in 2016. Netherlands, Belgium and Luxembourg
all showed growth compared to 2015 despite difficult market conditions. In Southern
Europe, investments in the sales network paid off well and revenues grew in Italy. We
also saw satisfying revenue growth in Oceania. The revenue in the Asian region also
ended higher than in 2015, in spite of the restructuring of the Chinese local customer
portfolio in 2014 and the ongoing uncertainty in the region, with foreign exchange
rate gains contributing to the result. Dubai, Japan and India in particular delivered
good revenue growth.
Gross claims expenses of local credit insurance ended at EUR 373.3 million, showing
a slight improvement in the overall claims ratio from the previous year. Local credit
insurance in Southern Europe reported continued good claims results in 2016 witha healthy claims ratio reflecting the success of the risk mitigating actions taken inprevious years as well as greater regional stability. The Asian claims ratio showed
continuous improvement in 2016 (following the already significant improvement in2015) in spite of the ongoing uncertain market conditions in this region. In Northern
Europe, The Netherlands also continued its good claims performance in 2016 whileother local credit insurance regions varied.
Our Global unit represents a significant part of our total credit insurance revenue
and is the acknowledged market leader in the multinational customer segment of
the credit insurance industry. 2016 was a challenging but rewarding year for thisunit. Global remains fully geared up to provide the best service to our multinationalcustomers.
Our Special Products Unit (SPU) offers solutions for our customers outside theframework of our whole turnover policies, to cover trade but also to support tradefinancing. Our Special Products Unit faced a challenging environment and while
experiencing only a small decrease in revenue during 2016, claims increased
compared to 2015.
Instalment Credit Protection (ICP) covers the medium- and long-term risks that
financial and corporate policyholders face in their multiple instalment agreementswith private individuals and businesses. In 2016 insurance revenue increased inalmost all markets in which ICP is active. Following the favourable economic cycle,
the claims were lower than expected and the recoveries were almost on target giving
way towards an improved gross claims result. ICP contributed positively to theoverall Credit Insurance results.

38

Our initiatives tomeet customers’
needs wererewardedwith improved
customer
retention.

Atradius | Business performance

Reinsurance(EUR thousands)
Insurance revenue
Gross insurance claims and loss adjustment expenses
Gross insurance operating expenses
Result before reinsurance
Reinsurance result
Result after reinsurance
Gross claims ratio

2016

2015

132,024(92,542)(54,927)(15,445)
2,865(12,580)
70.1%

134,744(118,420)(56,776)(40,452)
10,597(29,855)87.9%(2.0%)
21.9%
3.3%
61.8%
(73.0%)
57.9%
20.2%

Reinsurance revenue by region of cedent
9%

34%

17%

EuropeAsia and Oceania
Africa and Middle East
North America

12%South America

28%

Atradius Re provides reinsurance capacity for primary insurance companies
from both the developed and developing credit insurance and bonding
markets and assumes business from over 60 countries on all continents.
The underlying business consists of around 58% credit insurance and 42%
bonding, based on premium volume. The business is underwritten by aninternational team of underwriters based in our offices in Dublin, Ireland.
Atradius Re has long-standing relationships with its clients and leads morethan one third of its treaties, in addition it maintains close contact withspecialist brokers. The quality of these client relationships is underscoredby the company’s unique offering: combining the Atradius 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 anticipate and respond to our clients’ specific andchanging needs. Its strategy is to diversify and evolve its portfolio by region,
country and business type, with a focus on Asia, the Middle East, Africa andLatin America.
The total reinsurance revenue for 2016 of EUR 132.0 million has fallen slightly
from EUR 134.7 million in 2015, following the decision to take targeted cycle
management actions earlier in the year. The success of these measures isreflected in the significant decrease in claims expenses (21.9%) compared
to last year. That said, the low oil price and demand crisis in the commodity
markets continue to result in uncertainty of economic conditions, especiallyin emerging markets that have a higher dependency on commodity trade andoil revenue.

39

Atradius Re
assumes businessfrom over 60
countries on allcontinents.

Atradius | Business performance

Bonding(EUR thousands)
Insurance revenue
Gross insurance claims and loss adjustment expenses
Gross insurance operating expenses
Result before reinsurance
Reinsurance result
Result after reinsurance
Gross claims ratio

2016

2015

109,199(7,901)(40,884)
60,414(29,585)
30,8297.2%

101,777
19,084(35,955)
84,906(44,768)
40,138(18.8%)

7.3%(141.4%)(13.7%)(28.8%)
33.9%(23.2%)(138.6%)

Bonding insurance revenue by region
24%
9%

Nordic and Germany
35%

France
Italy
Spain
32%

Atradius is a multinational provider of bonds with local service orientation. Atradius
Bonding currently has business units active in Belgium, France, Germany, Italy,
Luxembourg, the Netherlands, the Nordic region and Spain.
Atradius Bonding works with different industries and maintains a relationship witha large range of companies. In addition to the traditional sectors, such as construction,engineering, capital goods and travel, demand for bonds is growing in new sectors suchas environmental services. Bonding customers are also showing an increasing need forboth domestic services and international surety bonds support.
To meet customer expectations, we have grown our capacity so that we can also address
the foreign requirements of our domestic customers. Moreover, in active response to theevolution of the insurance sector and in particular to the Bonding market, we provide
a web solution to help our customers handle their surety bonds efficiently while at thesame time maintaining a pioneering catalogue of products. During the year we havefurther enhanced the French and Nordic web portal tuned with customer needs. In Italy
the new web portal enables users to request, issue and pay new bonds by using digitaltechnology, and it’s adoption will gradually improve information management.
Our expanded presence throughout Europe allows us to support our customers’
multinational activities, combined with a wider spread network of fronting companies
across the world. In line with our pan-European strategy, Bonding is developing
a common IT platform aimed at facilitating the geographical expansion into new
European countries, boosting efficiency and safeguarding quality and risks.
Insurance revenue in 2016 increased by 7.3% compared to 2015 with each country
contributing to the positive performance. In Nordic countries, performance in 2016
returned to a healthy trend with a 6.7% increase in revenue compared to 2015. The
business developed well in Italy and in France growing 6% and 5% respectively. German
revenue development is also showing strong performance. Spain displayed 6% revenue
growth despite significantly lower public expenditure.
The claims ratio evolution in each country has improved not only only due to a limited
number of claims with lower amounts claimed, but also heavily supported by somesizeable one-off positive settlements of claims cases from 2015.

40

We have grown
our capacity
so that we canalso address
the foreign
requirementsof our domestic
customers.

Atradius | Business performance

Services(EUR thousands)

2016

2015

Service income*
Service expenses
Service result

79,102(70,471)
8,631

63,261(55,307)
7,954

25.0%
(27.4%)
8.5%* includes intersegment revenues

Service income
41%

Collections
other

59%

Debt collection
2016’s economic climate followed the same path of consolidation and stabilisation
as 2015. The challenges remained linked to scarce availability of liquidity and low
cash flow levels.
In Western Europe we see indeed that the insolvency environment is improving.
Emerging markets however experienced another difficult year, notably Russia,
Brazil and China which saw an increase in insolvencies. We see local and global
companies with a presence in these regions increasingly asking us to support
them there, also for first party collections services.
Atradius Collections’ service income increased 2.3% in 2016, while debt placement
increased 4.4%, mainly as a result of higher claims and growing market share of
our non-insured collections product. The positive development of debt placements
and the underlying increase in our customer base are providing a positive outlook
for further business development and collections service income generation.
Atradius Collections has expanded its reach in 2016 further by establishing
services in Dubai, Slovakia, Greece and Sweden.
In 2016 Atradius acquired an 80% stake in Gestifatura who specialise in therecovery of domestic and international corporate debt, and has over 20 years ofexperience in the Portuguese market.

Atradius Dutch State Business
Atradius Dutch State Business issues credit insurance policies and guarantees
to Dutch companies and banks financing Dutch exports on behalf of and for theaccount of the Dutch State. It provides cover for risks related to infrastructure
projects and the export of capital goods – often on medium or long-term credit– and for services to buyers in countries outside the Netherlands that are notcovered by the private market. It also provides cover for political risks related toinvestments in other countries. Atradius acting on behalf of Dutch State Businessprovides the necessary infrastructure and credit information knowledge tosupport Dutch exporters. The technical results for the account of the Dutch State
were positive throughout 2016.

41

Atradius Collections
expanded its reachin 2016 further by
establishing service
in Dubai, Slovakia,
Greece and Sweden.

Atradius | Business performance

In 2016, the Dutch ministry of foreign affairs introduced a new facility, the Dutch
Trade and Investment Fund. This fund enables Atradius Dutch State Business toprovide cover on investments and export contracts up to EUR 5 million for which
finance support by commercial banks is not available.
Atradius Dutch State Business also provides cover on development relevant
investments and export contracts in medium and lower income countries which
benefit (local) SMEs. This service is provided under the Dutch Good Growth Fundfrom the Dutch ministry of foreign affairs and was introduced in July 2014.
In addition, Atradius Dutch State Business provides debt management services,
under an agreement with the Dutch State, including those relating to international
debt agreements concluded by the Paris Club. It also manages the loan portfolio ofthe ‘Nederlandsche Investeringsbank voor Ontwikkelingslanden’. This portfolio is
in run-off and consists of concessional loans to developing countries on behalf of
the Dutch State. Lastly, Atradius Dutch State Business also supports countries suchas Vietnam, Macedonia and South Africa in improving their Export Credit Agency
businesses with subsidies from the Dutch State.

Information services
Through the Group’s companies Iberinform, Informes, Graydon and Ignios,
Atradius offers a wide range of business information services. Iberinform
supports business decision making with the assistance of business intelligence
tools designed to analyse customers, suppliers and competitors. Their credit
scoring models and business reports help companies to assess customer credit
risk, assign credit limits and, ultimately, improve their cash flow.
In 2016 Atradius became the sole shareholder of Graydon, one of the world’s
leading business information providers, after acquiring the remaining 55% stakein the company. The Dutch leading business information provider provides
business information solutions for Credit Management & Collections, Marketing
Intelligence and Risk & Compliance. By converting data into innovative businessinsights, Graydon helps companies to identify commercial opportunities andreduce risks. Graydon has offices in the Netherlands, Belgium and the UK anduses a network of 130 international databases around the world with information
on more than 90 million companies.
After years of partnership in October 2016 Iberinform acquired an 80% share in
Ignios allowing Iberinform and Ignios to consolidate a powerful range of products
and services in the Iberian market and strengthen their technical capabilities.
Business information services are also offered in Mexico via our company
Informes Mexico S.A., supported by a newly developed IT platform.

42

The Dutch Tradeand Investment
Fund enables
Atradius Dutch
State Business toprovide cover oninvestments andexport contracts
up to EUR 5
million for which
finance support bycommercial banks
is not available.

Atradius | Human resources

Building throughpeople who can makea difference
If we are to help our customers growand protect their businesses we mustensure that our people are continuously
developing their competencies: theirknowledge and skills.
To this end, we offer a wide choice of training opportunities through the
Atradius Academy for staff at all levels.
For instance, we organise permanent education sessions for ourManagement Board and Supervisory Board. For many years, the Atradius
Academy has actively supported the development of leadership skills. In
2016 three Management Development Programmes were organised by
the Atradius Academy: Stepping Forward 1 & 2 and On the Move. Each
programme is designed for a specific audience within Atradius and isconstantly adapted to the changing needs of the participants.
To ensure that all Atradius’ employees maintain an up-to-date knowledgeof compliance and governance rules and regulations, we run the annual
Atradius Learning Carousel. The 2016 version of the Carousel addressed
IT security and all aspects of fraud prevention. Participation in thesee-learning courses is mandatory for all employees.
The Atradius Academy offers a wide range of e-learning courses for Atradius
staff: combining our own productions and those purchased from external
suppliers. Every half year the external offer is reviewed and renewed on thebasis of changing internal needs and demands.
As well as Atradius Academy’s blended learning approach, we have overtime created a company culture that focuses on customer needs.
To assure a future proof Human Resources system, Oracle Human
Capital Management (HCM) was implemented in Atradius in 2015. In
2016 we added the modules for Talent management and compensation
to the core application. HCM supports the annual performance review
and target setting across the Group. This enables us to have a consistentglobal approach to manage the HR processes through HCM and support
local operations going forward. HCM helps us to align competencies andjob levels worldwide and to report and analyse relevant management
information.

43

Atradius actively
supports thedevelopment ofleadership skills.

Atradius | Human resources

The Evolve initiative started in 2012, has as its objective increasing our
external focus and stimulating creativity in meeting customer needs. We
developed a web based application to run a virtual credit insurance company
called the Atradius Experience. This application was launched in 2016 andwas played by Atradius staff across the globe in multifunctional teams. The
aim of the game was to exchange knowledge about Credit Insurance within
the teams and to introduce and share expertise amongst team members.
More than 750 employees from 32 countries forming more than 150 teams
participated voluntarily in this teambuilding and learning exercise. The
feedback of the participants on this gamification was very positive.
Another initiative was launched, supported by Evolve focused on increasing
competiveness of Atradius, by outlining strategies and developing channels
to win new clients. This initiative was internally promoted by sharing groupwide success stories and best practices.
Indicators

2016(2)

2015

2014

2013

2012

2011

2010

2009 2008(1)2007

Headcount

3,339

3,333

3,298

3,257

3,315

3,304

3,318

3,627

4,106

3,604

Full-time equivalent

3,169

3,161

3,139

3,107

3,143

3,149

3,171

3,488

3,863

3,366

Full-time equivalent, average

3,168

3,153

3,132

3,132

3,139

3,159

3,318

3,662

3,851

3,335

Retention rate

92.3%

92.0%

94.9%

91.4%

92.6%

91.1%

85.8%

88.6%

88.8%

82.9%

Sick leave

2.9%

3.1%

2.8%

3.0%

3.1%

3.4%

3.6%

3.4%

3.0%

2.4%

Expenses as % of salaries

1.7%

1.6%

1.5%

1.2%

1.4%

1.3%

1.3%

1.4%

2.5%

2.6%

Number of participants

7,680

6,366

5,646

5,283

1,656

1,952

1,236

1,943

4,455

n/a

Development and training

1) Including Crédito y Caución since January 20082) excluding FTEs from Graydon (309 FTEs), Ignios (63 FTEs) and Gestifatura (23 FTEs).

44

Atradius | Risk and capital management

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 andwith counterparties - including market risk, credit risk and liquidity risk.
Operational risk is the risk of direct or indirect losses resulting from humanerror, inadequate or failed internal processes, systems or external events and includes fraud risk.

Risk management
The Management Board is ultimately responsible for risk management andinternal control within the Group; it delegates authority to take decisions
in this context to the Risk Strategy Management Board (RSMB) and tovarious risk committees with responsibilities for specific risk-related areas
such as underwriting of buyer exposures, country risk, provisioning, asset
composition and investment policy, reinsurance, risk, capital and pricing
modelling, and approval of new products. In addition, all employees havewell-defined authorities specifying the level of risk they can accept. This
framework ensures that risks are assumed and managed in a controlled way
and in line with the risk appetite of the company. For the description of themain risk and uncertainties and how these are managed please refer to Note 4
Risk and Capital management of the consolidated financial statements.

45

Atradius | Risk and capital management

Atradius compliance framework
Compliance practices support our business, our reputation and our integrity.
Complying with relevant laws, rules and regulations and maintaining a highstandard in terms of ethics and integrity leads to lower operational risk andmore stable business processes. The Group’s Code of Conduct outlines thebasic corporate, legal and ethical compliance principles and guidelines that
apply to all employees of the Group and that govern the Group’s operations
and its employees’ business conduct and actions. Individual Compliance
Codes address specific compliance areas in more detail and set out detailed
compliance requirements that must be followed across the Group and whichmust be included in existing business procedures. For example, the Customer
Due Diligence Code addresses potential risks in areas such as sanction
regulations and money laundering. The Compliance Function within Atradiusconsists of the Group Compliance Function and the Local Compliance
Function and consists of employees who (partially) perform complianceactivities. The Compliance Function supports the management of Atradius
in meeting its objective of being compliant with applicable laws, rules andexternal and internal regulations.

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 deliver
shareholder value.
In 2016 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 2016: EUR 1,625.5 million increased by
8.4% from EUR 1,500.2 million at year end 2015, due mainly to positive results
after tax.
Subordinated debt of EUR 325 million at the end of 2016 consisting ofsubordinated notes of EUR 250 million issued via Atradius Finance B.V.,
a wholly owned subsidiary of Atradius N.V., on 23 September 2014 and asubordinated loan of EUR 75 million provided by the shareholders of Atradius
N.V. to Atradius Reinsurance DAC with effect from 20 April 2016. Both thesubordinated notes (EUR 250 million) and the subordinated loan (EUR 75
million) qualify as Tier 2 basic own funds for Solvency II. Please see Note 16 of
the consolidated financial statements of the Annual Report 2016.

Regulatory capital
The solvency position of Atradius’ regulated entities is strong. In 2016 all
Atradius’ entities were able to meet their financial obligations efficiently andto comply with local legal and regulatory requirements.
Under Solvency II, Atradius is comfortably capitalised. We apply boththe standard formula and our internal capital model, subject toregulatory approval.
For further details on the main regulatory capital requirements please see
Note 4.5 of the consolidated financial statements of the Annual Report 2016.

46

Atradius | Corporate responsibility

Helping stabilise
the future
Atradius pursues a high standard ofcorporate responsibility, from how wesupport and empower our people,
to how we work with our customers, tohow we govern the organisation andconnect to communities.
For more than 90 years, we have been delivering value to stakeholders,
demonstrating the sustainability of our business practices and our ability
to remain relevant to customers while markets and industries around uschange. We have more than 3,000 employees and do business in morethan 50 countries and our definition of corporate responsibility reflectsthat extensive footprint, focusing on environmental responsibility, social
responsibility to our colleagues, customers and partners, and last but notleast, our economic responsibility. In our business context, we consider the
economic responsibility to be our biggest priority.
In its recent report on Trade Finance and SME’s, the World Trade Organisation
also acknowledges that we have an important role in the world economy,
helping small businesses grow and supporting the development of emerging
economies. We are here to enable trade and to help support sustainablegrowth for our customers, our organisations and in our communities. This isguided by a corporate governance system that promotes transparency in all
our offices.
Our operations involve a vast ecosystem of stakeholders, including
shareholders, employees, suppliers, regulators and NGO’s. Their satisfaction
is integral to our business strategy and success. All of our stakeholders areequally important and should benefit from our daily operations. That is why
we work closely with our stakeholders to define our purpose and to decide
the areas on which to focus. Since there are many areas that can be coveredby corporate responsibility, in 2015 we developed a materiality matrix tohelp us prioritise which areas are of material importance and to determine
how to allocate our time, resources and investment effectively. Our annual
report reflects these material topics, summarising our greatest efforts tomake the world a better place while creating value. We encourage feedback
from stakeholders, and we use this report to respond to those with whom wehave engaged throughout the year. Our focus for the coming years will be to
produce an even more elaborate materiality matrix. We will take into accountchanges in the external and business context and engage with a broad set ofstakeholders to understand their views and expectations of our business.

47

Atradius’
commitment tobehave ethicallyincorporates social,environmental
and financial
prosperity. The
contribution we
make is meant tohelp strengthensocial welfare
and build a better
environment.
Isidoro Unda,
Chief Executive Officer of AtradiusAtradius | Corporate responsibility

In 2016, the main focus for the corporate responsibility strategy team wason improving internal processes. We have made significant progress in this,but are aware that much improvement can still be realised. Therefore, wehave begun to work with an external sustainability consultant who helps
us improve procedures structurally, and this in turn can help improve ourstrategy. Moreover, we have started our roadmap to assurance, by working
on externally auditable CSR data, and plan to have completed this roadmap
in 2020 for use in our reporting of 2019.
Another focus of 2016 was on increasing internal awareness of ourcorporate responsibility activities and strategies among internal
stakeholders. Several presentations and meetings have taken place withdifferent groups of these stakeholders to align viewpoints about a range ofcorporate responsibility topics.

Our customers
Bringing value to our customers is embedded in our daily operations. With
company and credit information on over 240 million companies worldwide,
we can help customers make informed trading decisions and also enhance
the insurance cover that we provide. In this way, we aim to support
customers to grow healthily, creating jobs and stimulating the economy. We
have earned the reputation as the credit insurer that goes the extra mile forits customers, and we are very proud of that. It also explains why 97% of oursurveyed customers would recommend Atradius to other organisations.

Our people
Our people genuinely are our greatest asset and therefore we strive toimprove their satisfaction as well as their sustainable employability. In
addition, we work on improving our reputation within the labour market.
Through our Employee Engagement Survey, we measure the perception of
our staff and wherever possible improve how we act as an employer.
For more information about our employees and diversity matters, please
read the Human Resources chapter of this report.
Here are just a few examples of our focus on employee satisfaction andsustainable employability:• O n a global level, an internal project allows employees to work together
with colleagues from different departments. The project is designed tostimulate interaction among colleagues, enabling knowledge sharing andcollaboration in finding ways to serve our customers even better;• I n the Netherlands, a vitality programme was set up in 2015 to increaseawareness of factors that play a role in sustainable employability andmotivates our people to work on their mental and physical health.
Employees are invited to participate in workshops to learn about topics
such as healthy food and sports, and also mindfulness and energy
management;• A ctualidad Económica has recognised Atradius Crédito y Caución S.A.
de Seguros y Reaseguros as the sixth best company to work for in Spain.
We have been in the top ten of this table in five of the last six years andthis emphasises the effectiveness of our corporate strategies attracting
and developing people who manage the business risks of thousandsof companies.

48

Bringing value toour customers isembedded in ourdaily operations.

Atradius | Corporate responsibility

Our suppliers
Sustainable purchasing is crucial to our supply chain management. In
2016, we took our Sustainable Procurement strategy further, encouraging
our suppliers to provide more sustainable solutions. To improve alignment
between our organisation and our suppliers, several breakfast sessions took
place in our Amsterdam office, with discussions on alignment and many othersustainability topics.

Our communities
In 2016, many people engaged in volunteer work in our communities. We took
part in many projects around the world, such as AlimentaLaCadena.es, theAmsterdam City Swim, SOS Kinderdorf, Warszawa Business Run and Racefor Breast Cancer as well as organised many volunteering events ourselvesthat have added value to those communities, whether financially, personallyor socially.

Our environment
As a financial services firm, our environmental impact is small comparedto many other industries. However, our customers and other stakeholders
still expect us to minimise our impact, and as a responsible business
whose operations ultimately rely on natural resources, we are constantly
looking at opportunities to make efficient and sustainable use of natural
resources. To promote greater environmental responsibility, initiatives havebeen introduced in respect of energy use, recycling and waste disposal,
transportation and procurement.

Our compliance to the UN Global Compact
We are a member of the United Nations Global Compact. The Global Compact’s
10 principles resonate highly with our values. The Global Compact focuses onfour core areas, to which we respond in different ways. To learn more about
our commitment to the UNGC’s 10 principles, please see our Communication
on Progress Report.

49

Gispen is branchleader in thefield of circular
economy. […]As a supplier
to Atradius, we
contribute tothe objectives ofAtradius to reduce
pollution, social
inequality andother negativeside-effects of thelinear economy
Maurits van Berckel,
Commercial Director of Gispen

Atradius | Corporate responsibility

Environmental KPIs
KPI

2016
Total

2015
Total

2016/2015
Change32
99
106,142
3,169

31
100
105,875
3,154

increasedecreaseincreaseincrease

7,868,831
2,966,516
27.4%
10,835,347
411,521
14,466,843

8,766,020
2,170,970
19.8%
10,936,990
406,557
14,521,196

decreaseincreaseincreasedecreaseincreasedecrease

Employee air travel (km)Employee rail travel (km)Company lease car travel (km)Total travel (km)13,738,292
2,615,557
10,670,533
27,024,382

13,820,150
2,598,529
10,857,769
27,276,448

decreaseincreasedecreasedecrease

CO2 footprint (tonnes of CO2)
Energy CO2
Travel CO2
Total CO2

7,159
7,151
14,3107,531
7,217
14,748decreasedecreasedecrease

16,341,548
5,173,324
24.0%
21,514,872

15,856,663
6,891,267
30.3%
22,747,930

increasedecreasedecreasedecrease

Water usage (m3)38,202

42,911decrease

Waste – per type
Hazardous waste (tonnes)
Non-hazardous waste (tonnes)**
Total waste

7.1
558.0
565.1

7.8
515.0
522.8

decreaseincreaseincrease*

Number of reporting countries
Number of offices
Total office space (m2)
Total personnel (FTE)
Energy (gas & electricity) usage
Electricity from non-renewable source (kWh)Electricity from renewable source (kWh)% of renewable electricity
Total electricity (kWh)Gas (m3)
Total energy
TravelPaper used
Non-recycled paper (sheets A4)
Recycled paper (sheets A4)% recycled paper
Total paper* This table does not include information from Graydon and Ignios** The non-hazardous waste increased due to moving offices in Belgium

50

Leading the future
through commitment

51

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Consolidated financial statements 2016
Contents
Consolidated financial statements................................................................................................................................... 48
53
Notes to the consolidated financial statements
1
General information .................................................................................................................................................... 54
58
2
Summary of significant accounting policies ........................................................................................................ 54
58
3
Critical accounting estimates and judgements in applying accounting policies ........................................ 70
74
4
Risk and capital management.................................................................................................................................. 76
72
5
Segment information .................................................................................................................................................. 92
97
6
Intangible assets ..........................................................................................................................................................102
96
7
Property, plant and equipment and Investment property ................................................................................104
99
8
Subsidiaries ................................................................................................................................................................ 100
107
9Investments in associated companies ................................................................................................................. 100
108
10 Financial investments.............................................................................................................................................. 103
110
11 Receivables .................................................................................................................................................................. 103
110
12 Deferred acquisition costs ....................................................................................................................................... 104
111
13 Miscellaneous assets and accruals ........................................................................................................................ 104
111
14 Cash and cash equivalents ...................................................................................................................................... 105
112
15 Capital and reserves .................................................................................................................................................. 105
112
16 Subordinated debt ..................................................................................................................................................... 107
114
17 Employee benefit assets and liabilities ................................................................................................................ 107
114
18 Insurance contracts.....................................................................................................................................................118
111
19 Provisions .....................................................................................................................................................................122
115
20 Deferred and current income tax ..........................................................................................................................123
116
21 Payables ........................................................................................................................................................................125
118
22 Other liabilities ...........................................................................................................................................................125
118
23 Net premium earned .................................................................................................................................................126
119
24 Service and other income ........................................................................................................................................126
119
127
25 Net income from investments ............................................................................................................................... 120
26 Insurance claims ........................................................................................................................................................128
121
27 Net operating expenses ........................................................................................................................................... 129
122
129
28 Finance expenses...................................................................................................................................................... 122
29 Income tax .................................................................................................................................................................. 130
123
30 Dividends per share ................................................................................................................................................. 130123
31 Assets not freely disposable .................................................................................................................................... 130123
130
32 Capital commitments and contingencies ............................................................................................................ 123
33
34
35
36
37

Operating leases ........................................................................................................................................................ 130
131
Business combinations............................................................................................................................................ 124
133
Personnel .................................................................................................................................................................... 125
134
Related party transactions ..................................................................................................................................... 126
Events after the reporting period ...........................................................................................................................135
127

1

52

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

Consolidated financial statements
Consolidated statement of financial position
Note

31.12.2016

31.12.2015

Intangible assets

6

226,005

173,500

Property, plant and equipment

7

125,968

121,253

Investment property

7

9,908

10,098Investments in associated companies

939,58635,396

Financial investments

102,280,293

2,212,264

Reinsurance contracts

18

632,262

689,849

Deferred income tax assets

20

45,31552,965Current income tax assets

20

50,613

21,288

Receivables

11

201,287

204,575

Accounts receivable on insurance and reinsurance business

153,405

175,373

Other accounts receivable

47,882

29,202Other assets

493,185498,263

73,12473,919AssetsDeferred acquisition costs

12

Miscellaneous assets and accruals

13

420,061

424,344

Cash and cash equivalents

14

287,080

230,707

4,391,502

4,250,158

1,625,470

1,500,249

55-

1,625,525

1,500,249

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

16

323,437

248,289

Employee benefit liabilities

17

109,451

93,935

Insurance contracts

18

1,561,155

1,648,791

Provisions

19

6,027

6,588

Deferred income tax liabilities

20

115,179

112,154

Current income tax liabilities

20

23,96031,641

Payables

21

232,746

195,207

Accounts payable on insurance and reinsurance business

183,407

161,835

Trade and other accounts payable

49,33933,372

393,411

411,973

Other liabilities

22

Borrowings

14

611

1,331

Total

2,765,977

2,749,909

Total equity and liabilities

4,391,502

4,250,158

2

53

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Consolidated income statement
Note

2016

2015

Insurance premium revenue

23

1,557,588

1,537,005

Insurance premium ceded to reinsurers

23(663,831)(674,608)

893,757

862,397
180,754

Net premium earned
Service and other income

24

203,079

Share of income of associated companies

25

26,689782

Net income from investments

25

18,27935,234

1,141,804

1,079,167(698,392)(718,522)

Total income after reinsurance
Insurance claims and loss adjustment expenses

26

Insurance claims and loss adjustment expenses recovered from reinsurers

26

271,896308,888(426,496)(409,634)(431,325)(407,874)

Total expenses after reinsurance(857,821)(817,508)

Operating result before finance costs

283,983

261,659

3,325

4,108

(12,744)(17,597)274,564

248,170

Net insurance claims
Net operating expenses

27

Finance income
Finance expenses

28

Result for the year before tax
Income tax expense

29(62,792)(69,949)

211,772

178,221

Owners of the Company

211,795

178,221

Non-controlling interests

(23)

-

Total result for the year

211,772

178,221

Result for the year
Attributable to:354Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise stated

Consolidated statement of comprehensive income
2016

2015

211,772

178,221(40,045)

2,795

7,925

(1,399)20,324(12,574)--(1,869)

3,782

Income tax relating to items that may be reclassified(1,699)1,265

Other comprehensive income for the year, net of tax(15,364)(6,131)

Total comprehensive income for the year

196,408

172,090

196,431

172,090(23)-

196,408

172,090

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

15.5

Income tax relating to items that will not be reclassified
Items that may be subsequently reclassified to the income statement:
Net fair value gains/(losses) on available-for-sale financial investments
Share of other comprehensive income of associated companies
Exchange gains/(losses) on translating foreign operations and associatedcompanies

15.3

15.4

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

455

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Consolidated statement of changes in equity
Attributable to the owners of the Company
Share
Share Revaluation Currency
PensionRetained
capital premium
reserve translation
reserveearnings
reserve
reserve
Balance at 1 January
2015
Dividends
Total comprehensive
income for the year
Result for the year
Other comprehensive
incomeBalance at 31 December
2015
Balance at 1 January
2016(35,115) (139,586)

Total

Noncontrollinginterests

Total
equity79,122

704,10848,085

736,425

1,393,039-

1,393,039-(64,880)

-

-

-

-

(64,880)-(64,880)--(10,909)

3,382

1,396

178,221

172,090-

172,090

-

-

-

-

-

178,221

178,221-

178,221

79,122 639,228(10,909)37,176

3,382
1,396(31,733) (138,190)

914,646(6,131)1,500,249-(6,131)1,500,249(31,733) (138,190)

79,122

639,228

37,176914,646

1,500,249-

1,500,249

Acquisitions

-

-

-

-

-

-

-

78

78

Dividends
Total comprehensive
income for the year

-

-

-

-

-

(71,210)(71,210)-(71,210)--

17,581(825)(32,120)

211,795

196,431(23)

196,408

-

-

-

-

-

211,795

211,795(23)

211,772

79,122 639,228

17,58154,757(825) (32,120)(32,558) (170,310) 1,055,231(15,364)
1,625,470

55(15,364)
1,625,525

Result for the year
Other comprehensive
incomeBalance at 31 December
2016

5

56

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

Consolidated statement of cash flows
2016

2015

274,564

248,170

Realised capital (gains)/losses on investments(23,296)(19,593)

Dividends received from financial investments(9,762)(7,034)

I. Cash flows from operating activities
Result for the year before tax
Adjustments for:

Share of income of associated companies(4,975)(782)

Depreciation, impairment and amortisation

59,712

52,891

Interest expense on subordinated debt

15,894

13,333

Net interest income(38,154)(12,504)

Other non-cash items(1,452)

20,483

Changes in operational assets and liabilities:
Insurance contracts(87,636)

76,640

Reinsurance contracts

57,587(20,887)

Deferred acquisition costs
Accounts receivable and payable on insurance and reinsurance business

795(1,649)43,540(27,265)

Changes in other assets and liabilities(74,973)(64,837)

Pensions and other long-term employee benefit net contributions(28,434)(26,341)

Cash generated from operations

183,410230,625

Income tax paid

(47,955)(32,412)Interest paid
Net cash (used in)/generated by operating activities(2,102)(2,856)

133,353

195,357(21,300)-

II. Cash flows from investing activities
Investments and acquisitions (cash outflows):
Business Combination
Short-term investments(88,408)(194,558)

Financial investments available-for-sale(966,407)(1,036,158)

Property, plant and equipment and intangible assets(46,035)(27,747)-

61

Divestments, redemptions and disposals (cash inflows):
Investment property
Investments in associated companies

-

2,689

Short-term investments

158,005

288,321

Financial investments available-for-sale823,271

800,453

Property, plant and equipment and intangible assets

1,616

144

Net cash acquired in a business combination

14,465

-

-

1,829

Dividends received from associated companies
Dividends received from financial investments

9,762

7,034

Interest received

45,07038,875

Net cash (used in)/generated by investing activities(69,961)(119,057)(71,210)(64,880)

Interest paid on subordinated debt

(13,125)(13,125)

Subordinated debt - addition

75,000-Net cash (used in)/generated by financing activities(9,335)(78,005)

III. Cash flows from financing activities
Dividend paid

Changes in cash and cash equivalents (I + II + III)54,057(1,705)

Cash and cash equivalents at the beginning of the year

229,376

220,762

3,036

10,319286,469

229,376

Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
The cash and cash equivalents are presented net of bank overdrafts (see Note 14).

6

57

Atradius
Consolidatedfinancial
financialstatements
2016
Atradius
N.V.
Atradius || Consolidated
statements
2016
Atradius
N.V.

Notes to the consolidated financial statements
1

General information

Atradius N.V. (‘the Company’), with its office at David Ricardostraat 1, 1066 JS, Amsterdam, the Netherlands, and its
subsidiaries (together referred to as ‘Atradius’) is a global credit insurer and aims to support its customers’ growth bystrengthening their credit and cash management through a wide range of credit insurance management products andservices. These services include credit insurance, bonding, reinsurance, information services, collection services andinstalment credit protection. Atradius offers products and services from strategically located offices on six continents andemployed 3,7361) people as at 31 December 2016 (2015: 3,333). The parent is Grupo Compañía Española de Crédito y
Caución, S.L., which owns 64.23% of the shares in Atradius N.V. The ultimate parent and the ultimate controlling party ofAtradius 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% (2015: 35.77%) of the shares in Atradius N.V. The financial statements of Atradius N.V. areconsolidated within Grupo Catalana Occidente, S.A., which is a listed company in Spain.
These Atradius consolidated financial statements have been authorised for issue by the Management Board on 2 March2017 and have been reviewed by the Supervisory Board. On 2 March 2017 the consolidated financial statements have been
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

These consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union and also comply with Part 9 of Book 2 of the Dutch Civil Code. They have been prepared
under the historical cost convention as modified by the revaluation of available-for-sale financial 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 theconsolidated financial statements are disclosed in Note 3.
The income statement of Atradius N.V. for 2016 is incorporated in the consolidated financial statements, which allows for apresentation of a condensed company income statement in the company financial statements in compliance with Book 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.

1)

Including FTE from Graydon, Ignios and Gestifatura.

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

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 2016

The following relevant standards, amendments and interpretations have been adopted in 2016, but have had no material
effect on the consolidated financial statements unless otherwise mentioned:
-

-

2.2.2

Annual improvements to IFRS: 2012-2014 Cycle (effective 1 January 2016). The Cycle introduces limited
amendments to the following standards: IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, IFRS 7 Financial Instruments: Disclosures (with consequential amendments to IFRS 1), IAS 19
Employee Benefits and IAS 34 Interim Financial Reporting;Amendments to IAS 1 Disclosure Initiative (effective 1 January 2016). The narrow-focus amendments clarify,
rather than significantly change, existing IAS 1 requirements;
Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation(effective 1 January 2016). This amendment clarifies when revenue-based depreciation or amortisation
methods are permitted.

Standards, amendments and interpretations not yet adopted

The following relevant standards and amendments are effective for annual periods beginning after 31 December 2016 andhave not been early adopted by Atradius:

IFRS 9 Financial Instruments (effective 1 January 2018). This standard replaces the existing guidance in IAS 39
Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classificationand measurement of financial instruments and the new general hedge accounting requirements. In
September 2016 “Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance
Contracts“ was issued. The amendments provide two options for entities that issue insurance contracts within
the scope of IFRS 4:
an option that permits entities to reclassify, from profit or loss to other comprehensive income,some of the income or expenses arising from designated financial assets (the "overlay approach");an optional temporary exemption from applying IFRS 9 for entities whose predominant activity isissuing contracts within the scope of IFRS 4 (the "deferral approach").
The application of both approaches is optional and an entity is permitted to stop applying them before the
new insurance contracts standard is applied. Atradius will apply the temporary exemption from applying IFRS
9 and to adopt IFRS 9 in combination with the adoption of IFRS 17 Insurance contracts;
IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018). The standard establishes acomprehensive framework for determining whether, how much and when revenue is recognised. It replaces
existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13
Customer Loyalty Programmes. The standard is not expected to have a material impact on the consolidated
financial statements.

The following relevant standards and amendments have not yet been endorsed by the European Union and as such havenot been adopted:

IFRS 16 Leases (effective 1 January 2019). This standard replaces the existing guidance in IAS 17 Leases andseveral interpretations (IFRIC 14, SIC-15 and SIC-27). IFRS 16 establishes principles for the recognition,measurement, presentation and disclosure of leases, with the objective of ensuring that lessees and lessors
provide relevant information that faithfully represents those transactions. The standard is expected to havean impact on the consolidated financial statements;
Amendments to IAS 7 Statement of Cash Flows. The amendments will require entities to provide disclosuresthat enable investors to evaluate changes in liabilities arising from financing activities, including changes
arising from cash flows and non-cash changes. The amendments will only have an effect on the disclosures;
Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts. See thecomments above regarding the application of IFRS 9;859Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.



2.3

Amendments to IAS 12 Income Taxes. The amendments, Recognition of Deferred Tax Assets for Unrealised
Losses, clarify how to account for deferred tax assets related to debt instruments measured at fair value. The
amendments are not expected to have a material impact on the consolidated financial statements.

Changes in presentation

Certain comparative amounts have been reclassified to conform to the current period presentation. These are further
detailed in the related notes.

2.4

Consolidation

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

2.4.1

Subsidiaries

Subsidiaries are all entities over which Atradius has control. Atradius controls an entity when Atradius 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 powerover the entity. Subsidiaries are fully consolidated from the date on which control is transferred to Atradius. They are deconsolidated from the date on which control ceases to exist.
Intra-Group transactions, balances and unrealised gains on intra-group transactions are eliminated. Unrealised losses arealso 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 2.18).

2.4.2

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 acquisition date)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 recognised in the income
statement as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at theacquisition 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-controlling interestsin 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 non-controlling interests inthe acquiree and the fair value of Atradius’ previously held equity interest in the acquiree (if any), then the excess isrecognised 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 basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured atfair 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 from acontingent consideration arrangement, the contingent consideration is measured at the fair value and included in theconsideration 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 to goodwill.
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 circumstances that existed at theacquisition date.

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

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement
period adjustments depend 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 re-measured at subsequent reporting dates inaccordance with IAS 39 Financial Instruments: Recognition and Measurement or IAS 37 Provisions, Contingent Liabilities
and Contingent Assets, as appropriate, with the corresponding 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 re-measured
to fair value at the acquisition date (i.e. the date when the Atradius obtains control) and the resulting gain or loss, if any, isrecognised in the income statement. Amounts arising from interests in the acquiree before the acquisition date that havepreviously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would beappropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, Atradius reports provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities arerecognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if
known, would have affected the amounts recognised at that date.

2.4.3

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.
Associated companies are accounted for using the equity method and are initially recognised at cost. Atradius’ investment inassociated companies includes goodwill (net of any accumulated impairment loss).
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 of an impairmentof the asset transferred. Associate’s accounting policies are changed where necessary to ensure consistency with thepolicies adopted by the 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.

2.5

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.

2.6

Foreign currencies

2.6.1

Functional and presentation currency

Items included in the financial statements of each of Atradius’ entities are measured using the currency of the primaryeconomic environment in which the entity operates (the ‘functional currency’).

2.6.2

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from thetranslation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognisedin the income statement. A monetary item that forms part of a net investment in a foreign operation for which settlement isneither 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 losses on these monetary items arerecognised in other comprehensive income.

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Translation differences on non-monetary items, such as equities classified as available-for-sale financial investments, areincluded in the revaluation reserve through other comprehensive income.

2.6.3

Atradius companies

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

assets and liabilities for each statement of financial position presented are translated at the closing exchange
rate at the date of that statement of financial position;
income and expenses for each income statement presented are translated at monthly average exchange
rates unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at exchange rates at the dates of thetransactions; 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 and other currency instruments designated as hedges of such investments, are taken to other comprehensive
income. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of thegain 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 2016

1.168

0.949

0.685

1.235

0.900

0.672

At 31 December 2015

1.362

0.919

0.671

1.375

0.898

0.675

2.7

Goodwill and other intangible assets

2.7.1

Goodwill

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interestsin 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 non-controlling interests inthe acquiree and the fair value of Atradius’ previously held equity interest in the acquiree (if any), then the excess isrecognised immediately in profit or loss as a bargain purchase. Goodwill arising on an acquisition of a business is carried atcost as established at the date of acquisition of the business (see Note 2.4.2) less accumulated impairment losses, if any.
For the purpose of impairment testing, goodwill is allocated to the Atradius’ relevant cash-generating units. Cashgenerating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there isan 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, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit
and then to the other 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.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on
disposal.
Goodwill on the acquisitions of associated companies is included in investments in associated companies.

11

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

2.7.2

SoftwareAcquired computer software licenses are capitalised on the basis of costs incurred to acquire and to bring to use the specificsoftware. 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 the
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 are recognised as an
expense as incurred. Computer software development costs recognised as assets are amortised using the straight-line
amortisation method over their estimated economic useful lives: not exceeding, in general, a period of five years.
Subsequent expenditure on capitalised intangible assets are capitalised only when they increase the future economic
benefits embedded in the specific assets to which they relate. All other expenditure is expensed as incurred.

2.7.3

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 is estimatedto be between 5 and 15 years.

2.8

Property, plant and equipment

Land and buildings comprise offices occupied by Atradius (‘property for own use’). Land and buildings are stated at the costof 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, forany difference in the nature, location or condition. All other property, plant and equipment are stated at historical cost lessaccumulated 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 the item can bereliably measured. All other repairs and maintenance are recognised as an expense in the income statement during thefinancial 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 amortisedover 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 estimated economic useful lives:
buildings over 50 years, fixtures and fittings over 3-10 years and information systems hardware over 3-5 years.

2.9

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, less any
subsequent accumulated depreciation and subsequent impairment losses. Buildings are depreciated using the straight-line
depreciation method over the estimated economic useful life of the property: 50 years.

2.10

Fair value measurements

For financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which
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:

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Level 1: Quoted prices in active markets. This category includes financial instruments for which the fair value is determined
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 for which thefair value is determined using a valuation technique (a valuation model), where inputs in the valuation model are taken froman 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 on other 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 level of 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. Atradiususes a variety of methods and assumptions that are based on market conditions existing at the end of the reporting period.
The fair values of property own use and investment property are determined by independent real estate valuators
registered in the relevant countries and have appropriate qualifications and experience in the valuation of properties.
See Note 4.3.1.1 for further details regarding the determination of the fair value of financial investments.

2.11

Recognition and derecognition of financial investments

All purchases and sales of financial investments carried at fair value that require delivery within the time frame establishedby regulation or market convention (‘regular way’ purchases and sales) are recognised at trade date, which is the date that
Atradius commits to purchase or sell the asset. Loans and receivables are recognised and derecognised at settlement date,
which is the date Atradius receives or delivers the asset.
Financial investments are derecognised when the rights to receive cash flows from the financial investments have expiredor where Atradius has transferred substantially all the risks and rewards of ownership. If Atradius neither transfers nor
retains substantially all the risks and rewards of ownership of a financial investment and does not retain control over theinvestment, it derecognises the financial investment. In transfers where control over the asset is retained, Atradiuscontinues to recognise the asset to the extent of its continuing involvement. The extent of continuing involvement isdetermined by the extent to which Atradius is exposed to changes in the value of the asset.

2.12

Classification of financial investments

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

2.12.1 Available-for-sale financial investments
Available-for-sale financial investments are non-derivative financial investments that are either designated in this categoryor not classified in the categories ‘loans and receivables’ (Note 2.12.2) and ‘fair value through profit or loss’.
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 as

1364Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise statedavailable-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.

2.12.2 Loans and receivables
Loans and receivables (including deposits) are non-derivative financial investments with fixed or determinable paymentsthat are not quoted on an active market, other than those that Atradius intends to sell in the short-term, or that it has
designated as available-for-sale. Deposits withheld by ceding companies and receivables arising from insurance contracts
are also classified in this category. Loans and receivables are initially recognised at fair value plus transaction costs andsubsequently 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 ofinterest would be immaterial.

2.13

Impairment of assets

2.13.1 Financial assets - general
Atradius assesses, at the end of each reporting period, whether there is objective evidence that a financial asset or group offinancial 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 recognitionof the asset (a ‘loss event’) and that loss event has a negative impact on the estimated future 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 individually significant.
If Atradius determines that no objective evidence of impairment exists for an individually assessed financial asset, whether
significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively
assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is orcontinues to be recognised are not included in a collective assessment of impairment.

2.13.2 Financial investments - carried at amortised cost
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 nototherwise consider, indications that a counterparty will enter bankruptcy, or other observable data relating to a group ofassets such as adverse changes in the payment status of counterparties, or economic conditions that correlate withdefaults. If there is objective evidence that an impairment loss has been incurred on loans and receivables, the amount of
the loss 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 the current
effective interest rate determined under contract. As a practical expedient, Atradius may measure impairment on the basisof 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 to an
event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting
the allowance account. The amount of the reversal is recognised in the income statement.

2.13.3 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 and equity
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.
Where such evidence exists for available-for-sale financial investments, the cumulative net loss that has been previously
recognised directly in other comprehensive income is recycled from other comprehensive income (the revaluation reserve)
and recognised in the income statement. If, in a subsequent period, the fair value of debt securities classified as availablefor-sale increases and the increase can be objectively related to an event occurring after the impairment loss was

1465Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

recognised in the income statement, the impairment loss is reversed through the income statement, but only to theamortised cost price. Subsequent increases above the amortised cost price are credited against the revaluation reserve as acomponent of other comprehensive income. Impairment losses recognised in the income statement on equity securities
cannot be reversed in subsequent periods.

2.13.4 Impairment of other non-financial assets
Assets that have an indefinite useful life, for example land, are not subject to amortisation or depreciation and are tested
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 isrecognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amountis the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets aregrouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Investment
properties are not allocated to cash-generating units; rather they 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 to an
event occurring after the impairment loss was recognised in the income statement, the carrying amount of the asset (orcash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased 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 prior years. The amount of the reversal is recognised in the income statement.
However, impairment losses recognised for goodwill are not reversed in subsequent periods.

2.14

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.

2.15

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 their fairvalue, and are used by Atradius in the management of its short-term commitments. Bank overdrafts which 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 which do not meet the 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 are included
within financial investments.

2.16

Capital and reserves

2.16.1 Share capital
Share capital is classified as equity when there is no obligation to transfer cash or other assets. 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 to the issue of equity instruments as consideration for the acquisition of a business are included in
the cost of acquisition.

2.16.2 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.

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

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

2.16.4 Currency translation reserve
The net exchange difference, after the deduction of income tax that is recognised in the currency translation reserve in eachperiod 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 thecase for recognised 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 of acquisition date and using the rate at the end of the current reporting period.

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

2.16.6 Retained earnings
Retained earnings are the accumulated amount of profits or losses at the end of the reporting period which have not been
distributed to shareholders.

2.16.7 Non-controlling interests
Non-controlling interests represent the proportion of shareholders’ equity and of total comprehensive income that is
attributable to minority shareholders.

2.17

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 the redemption
value is recognised in the income statement over the fixed period of the debt during which the interest is fixed using theeffective interest method. Interest payable is reported under other liabilities.

2.18

Insurance contracts

An Insurance contract is a contract under which one party (the insurer) accepts significant insurance risk from another party(the policyholder) by agreeing to compensate the policyholder or its beneficiary if a specified uncertain future event (theinsured 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 forthe loss it incurs because a specified debtor fails to make a payment when due under the original or modified
terms of a debt instrument; 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 that allows that existing insurance accounting practices are continued. The main item is thatthe local business in Spain and Portugal applies existing earnings and related provisioning practices. The differences in

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Atradius | Consolidated financial statements 2016 Atradius N.V.

application lead to different allocations of unearned premium and provision for outstanding claims. Further reference ismade to specific information included on ACyC in Note 4.2.6 and Note 18.

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

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

2.18.3 Provision for outstanding claims
Claims and loss adjustment expenses are charged to the income statement as incurred based on the estimated liability forcompensation owed to contract holders. They include direct and indirect claims settlement costs and arise from the risks
Atradius has taken 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 Atradius’ liabilities. Liabilities for unpaid
claims are estimated using the input of assessments for individual cases reported to Atradius and statistical analyses for theclaims 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 determined on a treaty-by-treaty basis, based onpremium 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.

2.18.4 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 is immediately
charged to the income statement by first writing down the related deferred acquisition costs and then by establishing aprovision for losses arising from the liability adequacy test.

2.18.5 Reinsurance contracts
Contracts entered into by Atradius with reinsurers under which Atradius is compensated for losses on one or more
contracts issued by Atradius 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. Theseassets 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 of each reinsurance contract.
Reinsurance liabilities are primarily premium payable for reinsurance contracts and are recognised 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 andrecognises that impairment loss in the income statement. Atradius gathers the objective evidence that a reinsurance asset isimpaired by applying similar procedures adopted for financial assets held at amortised cost. The impairment loss iscalculated under the same method used for these financial assets.
Atradius has profit commission arrangements with its reinsurance companies that are based on the loss ratio perunderwriting year. Atradius accounts for these commissions based on detailed assessments of the expected ultimate loss
ratios.

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

Atradius recognises the gains and losses from reinsurance contracts directly in the income statement.

2.18.6 Receivables and payables related to insurance contracts
Receivables and payables are recognised when due. These include amounts due to and from agents, brokers and insurance
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 similar procedures adopted for loans andreceivables. The impairment loss is also calculated under the same method used for these financial assets.

2.18.7 Salvage and subrogation reimbursements
Some insurance contracts permit Atradius to sell goods acquired in settling a claim (i.e., salvage). Atradius may also have theright 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 theprovision for claims. The allowance is the amount that can reasonably expected to be recovered.

2.19

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 which are directly related to restructuring plans.
Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihoodthat an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision isrecognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may besmall. Where the effect of the time value of money is material, the provision is measured as the present value of theexpenditure expected to be required to settle the obligation discounted using a pre-tax rate.

2.20

Deposits received from reinsurers

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

2.21

Employee benefits

2.21.1 Post-employment benefits
Atradius has a number of post-employment benefit plans. The schemes are determined by periodic actuarial calculations
and are generally funded through payments to state plans, insurance companies or trustee-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 andprior 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 (if any) out of which the

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Atradius | Consolidated financial statements 2016 Atradius N.V.

obligations are to be settled directly. The recognition of assets that arise by over-funding of the defined benefit plan islimited to the ability to use the surplus to generate future benefits (the asset ceiling). The defined benefit obligation is
calculated annually by independent actuaries using the projected unit credit method. The present value of the defined
benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality
corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms of maturity
that approximate 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, excludinginterest), are 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 to measure the defined
benefit obligation at the beginning of the annual period to the then net defined benefit liability (asset), taking into accountany changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments.
Net interest expense and other expenses related to defined benefit plans are recognised 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 the 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 andlosses 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
and settlements);
Administration expenses;
Net interest expense or income;Remeasurement.

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 nothold 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 the contributions have been
paid. The contributions are recognised as employee benefit expenses when they are due. Prepaid contributions arerecognised 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.

2.21.2 Other long-term employee benefits
Atradius has a number of other post-employment plans. The main plans are lump sum payment plans and pre-pension
plans. A lump sum payment plan is a plan where the employees are entitled to a lump sum payment at the date theiremployment 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’ net 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 net obligation is calculated
annually by independent actuaries using actuarial techniques.

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

2.21.3 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 isdemonstrably committed to either terminating the employment of current employees according to a detailed formal plan
without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary
redundancy. When termination benefits are related to an overall restructuring plan, the Atradius liability is included as partof the provisions.

2.21.4 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 a constructive obligation.

2.22

Taxation

Income tax in the consolidated income statement for the year comprises current and deferred tax. Income tax is recognisedin the consolidated income statement except to the extent that it relates to items recognised in other comprehensive
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 ofassets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determinedusing tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realised or the deferred income 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 utilised. Deferred tax assets and liabilities are offset when there is a legally
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 deferredincome tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at
the time of the transaction affects neither the accounting nor the taxable profit or loss, it is not accounted for.

2.23

Consolidated income statement

2.23.1 Income
Revenue comprises the fair value for services, net of value added tax, after eliminating revenue within Atradius. Revenue isrecognised as follows:
Premium earned
Written premium includes both direct business and reinsurance business and is defined as all premium and policy related
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 the contractual
risk. Accruals for premium refunds and cancellations are charged against premium written. Premium earned includes anadjustment 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 information services, collections and the income from activities carried out as anagent on behalf of the Dutch State. This income is recognised as the service is provided.

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Atradius | Consolidated financial statements 2016 Atradius N.V.

Share of income of associated companies
Associates are accounted for in the consolidated financial statements using the equity method. Under the equity method theinvestor’s share of after-tax profits or losses of the associates is presented as a single line item in the income 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’ rightto 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.

2.23.2 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 to insurance 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 and the netinterest on the net defined benefit liability (asset) related to defined benefit plans (see also Note 2.21). 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.

2.24

LeasesLeases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases.

2.24.1 Atradius as lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct
costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset andrecognised on a straight-line basis over the lease term.

2.24.2 Atradius as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where anothersystematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

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

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability.
The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except whereanother systematic basis is more representative of the time pattern in which economic benefits from the leased asset are
consumed.

2.25

Consolidated statement of cash flows

The statement of cash flows is presented using the indirect method, whereby the result for the year before tax is adjusted
for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments, and items of income or expense associated with investing or financing cash flows.
Some of the terminology used in the statement of cash flows is explained as follows:-

Cash flows are inflows and outflows of cash and cash equivalents;
Operating activities are the principal revenue-producing activities of Atradius and other activities that are notinvesting or financing activities;
Investing activities are the acquisition and disposal of long-term assets and other investments not included in
cash equivalents; andFinancing activities are activities that result in changes in the size and composition of the contributed equity andborrowings of Atradius.

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Atradius | Consolidated financial statements 2016 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 other factors,
including expectations of future events that are believed to be reasonable under the circumstances. The most significant
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 of financial
instruments that are not traded in an active market is determined by using valuation techniques. Atradius uses its
judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at theend of each reporting period. Where Level 1 inputs are not available, Atradius engages an external independent valuationcompany to perform the valuation. Atradius works together with the external independent valuation 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 the reporting
period. Although the calculation of the pipeline premium is derived from the core business systems and calculated at policy
level, the calculation does involve the use of management estimates.
Sliding scale reinsurance commission
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 scalecommission (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.

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 a significant or
prolonged decline in the fair value below its cost. This determination of what is significant or prolonged requires judgement.
In making this judgement, Atradius evaluates among other factors, the normal volatility in share price, the financial healthof the investment, industry and sector performance, changes in technology and operational and financing cash flows.
Impairment may be appropriate when there is evidence of deterioration in the financial health of the investment, industry
and sector performance, changes in technology, and financing and operational cash flows.
Had all the declines in fair values below cost been considered significant or prolonged Atradius would have an additional
EUR 5.9 million loss before tax (2015: EUR 8.1 million loss), being the transfer of the total revaluation reserve for unrealised
losses on equity financial investments to the income statement.

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Atradius | 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 has suffered any impairment. The
recoverable amounts of cash-generating units have been determined based 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 (discountrate and combined ratio of terminal value) which have been applied when determining the value in use for the related cashgenerating units. Increasing both assumptions downward and upward by 1% respectively did not indicate any potential
impairment of the goodwill under this scenario. The term ‘potential’ is used here since an indication of impairment does notalways lead to an actual impairment charge to the income statement.

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 thediscount rate and the inflation rate. Any change in these assumptions will impact the carrying amount of pension
obligations.
Atradius determines the appropriate discount rate at the end of each year. This is the interest rate that should be used todetermine 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 to maturity 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.

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Atradius | Consolidated financial statements 2016 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 has introduced a strong
governance and associated internal control system within the organisation. As a self-learning organisation and based on
additional regulatory requirements Atradius continues to strengthen its risk management capabilities by broadening risk
management scope and enhancing the existing risk management tools.
The relationship between risk and capital is fundamental for Atradius. Understanding how risk-taking consumes capitalallows management to steer Atradius and take strategic decisions based on risk. These decisions are increasingly driven by
the outcome of Atradius’ economic capital model. This model contributes to a multitude of risk assessment activities, as wellas risk profile measurement, and allows Atradius to better monitor and manage risk levels within the organisation throughthe allocation of risk-based capital. Moreover, risk management, risk profile measurement and implicitly the relationshipbetween risk and capital play a central role in Solvency II, the regulatory regime that came into effect on 1 January 2016.

4.1.1 The risk landscapeThe state of the global economy greatly influences the risks that Atradius faces. Economic deterioration may result in higher
insolvencies causing more frequent and severe claims expenses. In addition, a deterioration may lower our revenues as they
are strongly correlated to global trade. The return on our investment may also deteriorate and default on our holdings ofdebt instruments may occur. A severe deterioration of all the above mentioned may impact the credit rating of Atradius. A
downgrade of our credit rating could have a potential negative impact on the number of policies within Atradius. This might
further lower revenues.

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 Atradiusgroup-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 and the on-going overview
of the largest risks. The RSMB establishes the internal risk control system by determining risk control policies andprescribing risk mitigation activities. In addition, the RSMB ensures that there are processes and systems to review theeffectiveness of risk management and the internal control system.
The Supervisory Board is responsible for overseeing that the Management Board implements, amongst other things, a
suitable risk management and internal control system. In this respect, the Management Board, alongside its risk
management functions, periodically presents results, developments and plans to the Supervisory Board and relevant
committees thereof. One of these committees, the Audit Committee, supervises, monitors and advises the Management
Board on the effect of internal risk management and control systems. The Audit Committee is assisted in this role byInternal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, theresults of which are reported to the Audit Committee.
Atradius’ risk management policies are established to identify and analyse the 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. Through its training and management standards
and procedures, Atradius aims to develop a disciplined and constructive control environment in which all employees
understand their roles and obligations.
Central to Atradius’ system of governance is the Atradius risk governance structure. The risk governance structure iscomprises of a framework of committees (which act under the delegated authority of the RSMB), approval authorities, roles
and responsibilities and risk boundaries which combine to define the process by which Atradius decides what risks it takes
on and how it manages those risks.
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;

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

Ensure that Atradius adheres to an approved risk appetite;
Ensure appropriate ownership of decisions; andProvide the Management Board with clear lines of sight into decision-making and risk-management
processes.

4.1.3 Risk classification
Atradius classifies its risks types as insurance, financial and operational. Insurance risks are the risks of financial loss as adirect 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 are the risks of direct or indirect losses resulting from inadequate or failed internal
processes, people, systems or 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
credit and surety 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 the level ofrisk they can accept and that all risk acceptance must take place within the framework of the risk governance structure
described in Note 4.1.2. The main elements of the risk governance structure currently in place are described below.
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 so-called‘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 cover non-payment oftrade receivables due to commercial disputes. Each policy stipulates a maximum credit period that the policyholder canoffer to their 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 only whole portfolios of buyers.
For traditional credit insurance, there are two underwriting processes: policy underwriting and buyer underwriting. Policy
underwriting is the process by which Atradius decides which customers to accept as policyholders and the terms andconditions of cover that are offered. Buyer underwriting is the process by which Atradius sets risk limits for each buyer andissues credit limits, thus allowing us to manage risk on the portfolio of existing policies. Policy underwriting takes place in
the Commercial units and buyer underwriting in the Risk Service units.
Policies are issued for a fixed period: usually no longer than three years. Normally, customers retain some of the risk fortheir own account to protect Atradius from the risk of moral hazard. That self-retention can take the form, for example, ofan uninsured percentage, a deductible on each claim, an aggregate first loss amount or a combination of these. Almost allpolicies stipulate our maximum liability. A customer is covered for the credit risk on a buyer only once a credit limit on thebuyer has been established. Most policies allow customers to establish credit limits themselves for smaller amounts, underconditions 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 we would have to pay out to a customer in the event of aclaim. Moreover, Atradius can, in principle, withdraw the credit limit on a buyer at any time if circumstances demand. Credit
limits may be subject to specific conditions and Atradius can also set conditions for cover on a country or withdraw cover ona country altogether. These are important tools in managing our risk exposure.
Staff in Commercial units have well-defined authorities specifying who can underwrite which policies. Authorities typicallyrequire the approval of two people and conditions become stricter as policies become larger, with the largest policies
needing sign-off by both the Director of a Commercial unit and the responsible Management Board member. The pricing of26

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Atradius | Consolidated financial statements 2016 Atradius N.V.

credit insurance policies, new and renewed, is also subject to governance and the methodologies used to establish abenchmark price require the approval of the Quantitative Model Committee.
Staff in Risk Services have well-defined authorities specifying who can set what capacity on a buyer and who can approve
what credit limit. As credit amounts grow, decisions need authorisation from one or more cosignatories of increasing
seniority. There is an authority structure in which decisions are escalated depending on the amounts involved. The last two
steps in this authority structure are the Local credit committee and the Atradius credit committee. The Atradius credit
committee underwrites the largest buyers in terms of exposure. Exposure includes Credit Insurance, Bonding, Special
Products and Reinsurance.
Atradius’ Special Products business offers a range of tailor-made policies to insure against a number of credit and politicalrisks: including policies that cover single transactions, single trade relationships and asset confiscation. A distinguishingfeature of our Special Products policies is that usually, unlike traditional credit insurance, credit limits cannot be readily
withdrawn. However, the conditions of our Special Products policies tend to place a greater onus of risk monitoring anddiligence on the insured.
All policies are bound within clearly defined authorities issued to the policy underwriters who report ultimately to the Chief
Market Officer. All buyer risk is signed off by dedicated Risk Services teams which have a separate and distinct reporting line
to the Chief Risk Officer. In addition, a dedicated risk management team with a functional reporting line to the Director.
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 Italy, France, Spain and Portugal, the Nordic region, Germany and in the
Benelux countries. Surety bonds insure beneficiaries against the risk of our customer not meeting contractual, legal, or tax
obligations. Beneficiaries range from national, regional or local governments and tax authorities to companies.
While our customer may fail to meet its obligations either because it is unable to perform to the agreed or required level or
because it is insolvent, there is also the risk that the customer may intentionally fail to meet its obligations. Therefore, ourassessment of both the customer’s financial strength and its ability to perform plays 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 is taken
against the customer who remains ultimately liable. If Atradius does incur an irrecoverable loss it is almost always becauseof 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. As aconsequence, the type of bonds issued range from bid bonds, performance bonds, maintenance bonds, advance payment
bonds to 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 the Commercial units.
Technical underwriters assess the risk of non-performance. Financial underwriters, who are not part of the Commercial
units, must approve the acceptance of facilities and individual bonds over certain thresholds. There is an authority structurein which decisions are escalated depending on the amounts involved. The last two steps in this authority structure are theLocal credit committee and the Atradius credit committee mentioned above.
Other products
Atradius underwrites reinsurance programmes for the credit insurance and bonding business written by primary insurers.
This business is conducted by Atradius Re, domiciled and regulated in Ireland.
Atradius Re provides reinsurance capacity for primary insurance companies from both the developed and developing credit
insurance and bonding markets. It currently assumes business from over 50 countries worldwide, maintaining a balanced
diversity within the portfolio from each continent. The underlying business consists of approximately 58% credit insurance
and 42% bonding, based on premium volume.

27

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

Reinsurance underwriting guidelines and risk boundaries define the kind of business Atradius Re is authorised to write, withspecific guidelines to type of product, capacity limit, exposure, term and diversity of the underlying insurance ceded.
Particular attention is given to ensuring the diversity of business from third party clients and the level of exposure to any
one country, company, or market is managed within agreed underwriting limits and capacity.
All reinsurance business is reviewed regularly in detail for 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 performance of the underlying insurance products toreinsurance terms agreed with third party clients.
The Instalment Credit Protection covers the medium- and long-term risks that financial and corporate policyholders face intheir multiple instalment agreements with private individuals and businesses, and is available in Belgium and Luxembourg.
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 an underwriter for
manual assessment. Authorities are granted to underwriters according to their seniority and expertise. 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 exposure by counterparty, sector and country across all sources of insurance risk. It holds records of allcredit insurance policies, credit limits and buyers in various connected systems. These systems enable Atradius to set
system specific limits by buyer or buyer group. For the largest exposures, which fall in the scope of the Atradius Credit
Committee, Atradius sets limits at the aggregate level. Management information derived from these systems allows
Atradius to monitor aggregate exposure by country, customer or buyer sector and in many other ways.
All buyers with significant exposure are reviewed at least annually. Atradius continually receives information on buyers
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 an internal rating tobuyers and the review process takes into account all sources of exposure on a buyer through direct business, including
exposure for special products and bonding. The authority structure described in this note applies to buyer reviews.
The main system includes an integrated risk and cost-based pricing system. Most new policies and non-tacit renewals are
priced starting from a price suggested by the pricing system.
For reinsurance, Atradius Re has a number of risk management tools available to monitor the reinsurance portfolio for
performance, exposure and financial development. 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 exposures related to eachreinsurance treaty are reviewed quarterly within certain limits and exception reporting.
For ICP, consumer credit risk underwriting relies on the databases of the relevant national authorities. In Belgium, theNational Bank of Belgium maintains two databases: a negative database, listing every credit non-payment incident, and apositive 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 are adapted to 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 specificrisks. Traditionally the reinsurance treaties are usually renewed annually, however at the end of 2015 it was decided torenew on a two year basis (comprising of two separate underwriting years). On renewal, Atradius assesses the optimal
structure of the treaties for the forthcoming period, including the excess of loss treaties (the attachment points, spread of28

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

the layer and the number of reinstatements). A number of items are taken into consideration during this review, including
the cost of the synthetic capital that reinsurance provides as measured by the economic capital model and also the impact
on the Solvency II Capital charge under the standard formula of the various reinsurance proposals.
For the underwriting years 2016 and 2017 one quota share reinsurance treaty is in place covering the majority of Atradius’
business. The own retention under this treaty is 57.5%.
In addition, there is a separate quota share treaty which covers 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) and an aggregate stop loss treaty. These excess of loss
treaties also provide protection for the assumed business of Atradius Re. 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. Impacting boththe assumed and direct business of Atradius. The top of the excess of loss layers is chosen so that, in the judgement ofmanagement, there remains only a very remote possibility that failure of any single buyer group will exceed the top end of
the excess of loss coverage purchased. The attachment point of the excess of loss treaties has been set such that the net
retention for business ceded under the quota share treaties and excess of loss structure for any buyer group does notexceed EUR 25 million for Atradius. Atradius Re 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 quality standard ofsolvency/rating. The normal minimum requirement is an ‘A’ level rating. The treaties also include a provision that if areinsurer is downgraded during the period of the reinsurance below an A rating then security can be requested and if notprovided the reinsurance agreement with that reinsurer can be terminated.

4.2.4 Concentration risk
Atradius is exposed to concentration risk in a number of ways: by buyer, buyer’s country or buyer’s sector. The following
tables illustrate the exposure at the end of 2016 and 2015 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 credit 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 the amount of the limit. At theportfolio 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 throughdiscretionary 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 the policy and, for most policies this is no more than
EUR 20 thousand per buyer. This illustrates that TPE is a crude measure of 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.
In the following tables, the TPE has been aggregated and shows the exposure for credit insurance (including special
products and reinsurance). Germany, Spain and Portugal constitute more than 30% of the overall exposure.

29

80Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise stated

Buyer country

TPE 2016(EUR million)%

TPE 2015(EUR million)%

Spain, Portugal

93,43715.9%

89,601

15.9%

Germany

82,78314.1%

80,39814.3%

Central and Eastern Europe

55,0989.4%

50,8059.0%

USA48,956

8.3%

43,819

7.8%

France43,323

7.4%

40,917

7.3%

United Kingdom

39,7796.8%

42,031

7.5%

Italy

37,208

6.3%

32,735

5.8%

The Netherlands

25,268

4.3%

23,914

4.3%

Nordic24,8384.2%

24,023

4.3%

Other

136,41423.3%

134,401

23.8%

Total

587,104100%

562,644

100%

The following table shows the distribution of TPE over buyer industry sector. In terms of Industry Sectors the main buyer
sectors we provide cover on are Chemicals, Electronics, Consumer durables and Metals, which constitute more than 46% of
the exposure in 2016. The remaining exposure is distributed across Food, Transport, Construction, Machines, Agriculture,
Construction materials, Services and other sectors.
Industry sector

TPE 2016(EUR million)

TPE 2015(EUR million)

Chemicals

78,59374,538

Electronics

70,51069,797

Consumer durables

65,32460,940

Metals

58,85559,888Food

55,64052,056

Transport

53,43450,612

Construction

43,133

41,147

Machines

34,73433,902Agriculture

30,90728,327

Construction materials

25,387

24,425Services

25,27624,113

Other45,31142,899

Total

587,104

562,644

30

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

The following table shows TPE aggregated by group of buyers. This is the method of aggregation that is relevant for
Atradius’ excess of loss treaties. 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 a hit to an excess of loss treaty (2015: the same).
Value band

TPE 2016

TPE 2015(EUR million)(EUR million)

0 - 20331,385

316,278

20 - 100

99,78596,987

100 - 250

59,54556,899250 - 500

42,96840,003500 - 1000

23,76024,5721000 - and more

29,661

27,905587,104

562,644(EUR million)

Total

Exposure for bonding and for instalment credit protection has different characteristics and therefore has not been includedin these tables. The bonding exposure is EUR 22.7 billion (2015: EUR 23.0 billion). Exposure for instalment credit protection
amounts to EUR 2.3 billion (2015: EUR 2.1 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 vary bycountry and sector. For trade credit risk, the behaviour of customers may also affect the frequency and severity of claims,
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 structural changes are relevant in thisrespect will vary over time. In addition, the political risk cover that Atradius provides has its own dynamics of frequency andseverity 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 almost always due to either the insolvency or bankruptcyof the bonding customer. Thus, in the end, the frequency and severity of claims is affected by similar factors as thoseaffecting credit insurance.
All forms of credit insurance and bonding bear the risk that changes in legislation, in particular of insolvency law, may affectthe 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 these risk
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 factors that
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 theend of the reporting period consist of two elements: the provision for unearned premium (UPR) and the provisions forclaims ‘incurred but not reported’, the IBNR. The accounting policies and estimation methods for setting UPR and IBNR varyby 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

31

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Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise stated--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 thathave started, in the sense that the underlying insured shipment has taken place. IBNR is the local business in
Spain and Portugal’s estimate for future claims payments that will result from risks taken on, for which noclaims notification has been received and for which the underlying invoices are overdue at the end of thereporting period;for bonding, instalment credit protection and reinsurance, 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 interpreting theclaims development tables in Note 18 to evaluate the accuracy with which Atradius has historically estimated future claims
payments.
Estimates for future claims payments are made through a combination of case-by-case estimates and statistical estimates.
Provisions for reported claims are set on a case-by-case basis, taking into account statistical estimates for expected
recoveries and statistical estimates of claims incurred to payment ratios. The estimates for future claims payments areproduced per period during which policyholders brought risk under the cover of the policy (i.e., the period in which theinsured shipment has taken place). Large cases are provisioned separately, at expected loss.
In the case of traditional credit insurance, the main sources of uncertainty for estimates of future claims payments include:--

the amounts that will be paid out as a percentage of the claim amount;the speed with which customers submit claims, as measured from the moment that the insured shipment took
place, the expected average claims payment and the expected percentage of cases that do not lead to apayment;
the expected number of claims for risks taken on during the most recent months since very few claims will 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 and receipt of the bond calltends to be much longer than that of traditional short-term credit insurance. For example, most credit insurance covers
credit periods up to 180 days, while around half the number of bonds written has tenors of over two years. After receipt of abond call, it will take 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 predictedwith certainty.

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 notparticularly open to quantitative sensitivity analysis. However, 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 the estimate
for the ultimate number of claims for the most recent months of shipment is that the claims inflow in early 2017 will bearound 20% above the level of end 2016. An indication of the sensitivity to projected ultimate number of claims would be
the following: if the estimated ultimate number of claims for the most recent six months of risk were to change by 10%, theclaims provisions would change by EUR 23 million, gross of reinsurance (2015: EUR 21 million). As in essence provisions formost 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 for themost recent months, although, as is inevitable with severity risk, it has a longer tail.

32

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Claims provisions are presented net of recoveries from salvage and subrogation. Realised recoveries can deviate fromexpected recoveries. Expected recoveries amount to EUR 478.8 million (2015: EUR 504.1 million). The largest twocomponents of the expected recoveries are the recoveries for standard credit insurance of EUR 210.9 million (2015: EUR
228.2 million), and for instalment credit protection of EUR 128.8 million (2015: EUR 125.5 million).

4.3

Financial risk

Atradius is exposed to financial risk mainly through its financial assets, financial liabilities, reinsurance contracts andinsurance contracts. The core components of financial risk are market risk, credit risk and liquidity risk.
These risks arise mainly from interest rate sensitive positions, equity instruments, credit exposures, non-Euro currency
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, decreaseor increase due to adverse movements in equity prices, interest rates or currency rates. Atradius exposes itself to theserisks by holding assets and liabilities whose fair value are sensitive to movements in those prices. To measure these risks,Atradius uses several risk metrics. The most important ones being Value-at-Risk, capital models from the credit assessment
institutions, interest rate duration and the mismatch between assets and liabilities whose fair value is denominated inforeign currency.
Atradius uses an Asset Liability Management (ALM) approach to analyse the impact of market risk on its assets andliabilities. The ALM is, amongst others, based on the review of commitments resulting from Atradius’ insurance liabilities
and aims to define the Strategic Asset Allocation (SAA) so that these commitments can be met while maximising the
expected investment return.

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 their carrying
value. The fair value of the subordinated debt is 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 to transfer aliability in an orderly transaction between market participants at the measurement date. Whenever possible, 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 observabledata). If no observable market inputs are available, valuation models are used (non-market observable data). Thesevaluation techniques are subjective in nature and involve various assumptions about the relevant pricing factors. Changes inthese 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 thisgovernance structure, non-quoted investments or illiquid investments in which Atradius invests are valued by an external
independent valuation company. That company uses its own proprietary valuation systems to value the securities
supported by economic and market assumptions from financial information providers. The valuations are provided on amonthly 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 thosesecurities 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 fair values.

33

84Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise stated

Other financial assets
The carrying amount of other financial assets, including cash and cash equivalents, is not materially different to their fairvalue, given their short-term nature.
Subordinated debt
The fair value of the subordinated debt is based on binding quotes from independent brokers (see Note 16 for further
details).
Other financial liabilities and deposits received from reinsurers
The carrying amount of other financial liabilities and deposits received from reinsurers is not materially different to their fairvalue, given their short-term nature.
The following tables present the fair values of the financial instruments carried at fair value:

Financial instruments measured at fair value
Assets 2016

Quoted prices
in active
markets Level 1

Valuationtechniques
incorporating
information
other thanobservable
market data Level 3

Total

290,904-

290,904

Government bonds

558,988-558,988

Corporate bonds

1,218,200-

1,218,200

Structured debt

-

3,953

3,953

2,068,092

3,953

2,072,045

Quoted prices
in active
markets Level 1

Valuationtechniques
incorporating
information
other thanobservable
market data Level 3

Total

398,056-

398,056

Government bonds

478,636-

478,636

Corporate bonds

1,054,332-

1,054,332

Structured debt

-

3,908

3,908

1,931,024

3,908

1,934,932

Available-for-sale:
Equity securities
Debt securities:

Total
Financial instruments measured at fair value
Assets 2015

Available-for-sale:
Equity securities
Debt securities:

Total
There have been no transfers between Level 1 or 2 in 2016 or 2015.

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Structured debt
All structured debt contains embedded derivatives which are used for interest related strategies and are considered as
closely related to the debt instrument. One of the main risks on the structured debt is the default risk of the guarantor of
the issuer of the instrument.
Reconciliation of Level 3 fair values
The following table details the changes in the fair value of Level 3 financial investments (valuation techniques incorporating
information other than observable market data):
Financial investments Level 3

Debt securities

Balance at 1 January

2016

2015

3,908

21,075

Total gains or losses:
In income statement (net income from investments)

-

41

45

92

-

(17,300)

3,953

3,908

In other comprehensive income
Sales
Balance at 31 December

There have been no transfers into or out of Level 3 of the fair value hierarchy during 2016 or 2015.

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 toadverse movements in equity prices. Atradius exposes itself to equity price risk by investing in equity instruments issued bycorporations and equity instruments issued by investment funds. These risks are measured and analysed by using value atrisk techniques and capital models from the external credit assessment institutions. The Value-at-Risk measures thepotential maximum loss on Atradius’ equity instruments due to adverse movements in equity prices in the short-term while
the capital models measures the potential maximum loss in the long-term, (see Note 4.3.1.4 for more information). Atradiusinvests in a portfolio of diversified equity instruments to manage these risks.
Investment funds
The investment funds in which Atradius invests are exposed to market risk, counterparty risk, liquidity risk and currency
risk (i.e., general investment fund risks). The risks of an investment fund is mainly driven by the nature of the assets inwhich it invests. As investment funds are offered to multiple investors, the investment restrictions of a fund are governed in
the fund’s prospectus. Atradius only selects investment funds that have similar investment restrictions stated in theirprospectus as stated in the Atradius Group Investment Policy.
Equity instruments issued by investment funds
The portfolio of equity instruments issued by investment funds are shown in the following table:
Weight in %2016
Active fixed income funds
Passive equities exchange traded funds
Active money market funds
Total

Weight in %
2015

-

0.0%

76

0.0%

203,98099.5%

180,823

56.4%

1,122

0.5%

139,98443.6%

205,102100.0%

320,883

100.0%

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

Passive equities exchange traded funds
The portfolio of passive equities exchange traded funds mainly consists of exchange traded funds which passively tracks
the Dow Jones EuroStoxx 50 Index.
Active money market funds
The portfolio of active money market funds consists out of one money market fund denominated in Brazilian Real.

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. Atradius manages this risk by matching the duration of the subordinated debt and the insurance
contracts with one of the debt instruments.
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

2016

2015

2016

2015

Financial assets (1) (3)1,781,141

1,536,876

495,328

508,039

Financial liabilities (2) (4)(323,437)(248,289)(46,146)(48,336)

Total

1,457,704

1,288,587

449,182459,703

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 and cash held for 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 that bond.
The duration figure depicts the percentage change of the market value of a bond investment if the underlying discount rateis parallel shifted by 1%. The higher the duration figure, the more a bond is sensitive 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 theminimum and maximum duration limit (between one to five years for government bonds and one to three years forcorporate bonds) as set in the Atradius Group Investment Policy. As the duration can be described as the percentage change
of a bond’s value when the underlying discount rate is parallel shifted by 1%, the average maturity is the weighted averageof the time until a bond has paid its final interest and principal redemption. The duration for 2016 is 2.9 years (2015: 2.6
years) and the average maturity for 2016 is 3.2 years (2015: 3.1 years).

4.3.1.4

Value-at-Risk

Atradius measures equity price and interest rates risk by analysing the Value-at-Risk (VaR) of its financial instruments. Thisrisk 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-covariancemethodology 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 by financial information providers or financial
institutions.

36

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

The risk of using the variance-covariance methodology or any other historical methodology is that it may underestimate theriskiness of the financial instruments. This is because these methodologies assume that the historical volatility of andcorrelation between the financial instruments will be repeated in the future. Therefore, it is not intended to represent or toguarantee any future price movements but rather to be used as guidance for information purposes and comparison ofhistorical developments only.
The VaR provides insight into the maximum expected loss per asset category and on portfolio level. The fair values andpercentages 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 themarketvalue

2016

EUR million% of themarketvalue

2015

Equity securities:
Shares (including equity funds)

165.3

57.0%

155.5

60.3%

Government bonds (including government bond funds)

6.8

1.2%

6.4

1.3%

Corporate bonds (including corporate bond funds)

23.3

1.9%

27.1

2.5%

Structured debt

1.4

33.4%

0.9

30.4%

174.8

7.7%

166.7

7.5%

Debt securities:

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, corporate bonds and structured debt is maintained to capture the actual exposure to corporate bondsthat carry additional credit risk above the risks that government bonds bring along. The asset class structured debt is added
to debt securities in order to reflect the exposure to structured debt that has additional risks which are not present forgovernment bonds and corporate bonds. When individual securities are classified to the asset 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 may not be equal to the sum of the VaR of the individual portfolio components because
the correlation between these components may be less than one. The VaR percentage increased from 7.5% at the end of2015 to 7.7% at the end of 2016 and the VaR value increased from EUR 166.7 million at the end of 2015 to EUR 174.8 million
at the end of 2016. The increase in VaR percentage and VaR value is mainly driven by additional investments in equities
throughout 2016.

4.3.1.5

Currency risk

Movements in exchange rates may affect the value of consolidated shareholders’ equity, which is expressed in Euro. Foreignexchange rate differences taken to other comprehensive income arise on the translation of the net investment in foreignsubsidiaries and associated companies. During 2016, the Euro continued to weaken against some of the non-Eurofunctional currencies but strengthened against the GBP (see Note 2.6.3) resulting in a foreign currency loss in othercomprehensive income of EUR 0.8 million, net of tax (2015: a gain of EUR 3.4 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.

37

88

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

Atradius’ exposure to foreign currency exchange rate risk, arising from monetary financial assets and liabilities
denominated in non-functional currencies as at 31 December 2016 and 31 December 2015, is presented in the following
table:
FinancialassetsFinancialliabilities

Net position

Financialassets2016

Financialliabilities

Net position

2015

EUR

213,870

168,527

45,344

162,724

146,047

16,677

GBP

25,14622,2572,889(2,890)15,132(18,022)USD

202,303

311,150(108,847)

215,384

292,086(76,702)

AUD

14,321

11,637

2,684

15,277

14,657620

Other180,327

254,186(73,859)

121,620

173,726(52,106)

Total

635,968

767,757(131,789)

512,115641,648(129,533)

Sensitivity analysis
As an indication of the currency exposure, a 10% strengthening of these foreign currencies against the Euro as at the end of
the reporting period would have increased/(decreased) the result for the year by an amount equal to the net position aspresented above, calculated against that 10%. This analysis assumes that all other variables, and in particular interest rates,
remain constant and is performed on the same basis as for 2015. A 10% weakening of the aforementioned 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):
AssetsLiabilities

Net position

Assets2016

Liabilities

Net position

2015

EUR

3,343,755

1,886,344

1,457,411

3,156,381

1,882,196

1,274,185

GBP

120,950

108,884

12,066

109,738

103,710

6,028

USD

336,608

323,814

12,794

391,562

343,657

47,905

AUD

78,34938,93839,411

78,51749,417

29,100Other

511,840

407,997

103,843

513,960

370,929

143,031

Total

4,391,502

2,765,977

1,625,525

4,250,158

2,749,909

1,500,249

4.3.2 Credit risk
Credit risk is the risk that customers or counterparties are unable to repay their debt towards Atradius in full when due.
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 Atradius policy
is to select only reinsurers that have a well-established investment grade credit rating. The normal minimum requirement isan ‘A’ level rating, although there are some minor exceptions. In the event that the reinsurer’s rating is found to be below
this threshold, Atradius has the right to either terminate the reinsurance relationship during the course of the reinsurance
year or else seek collateral if the relationship is to continue. Deposits received from reinsurers mitigate the credit risk andare therefore included in the table below.
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 ofoffset where counterparties are both debtors and creditors. Management information reported to Atradius includes detailsof provisions for impairment on loans and receivables and subsequent write-offs.

38

89Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Credit exposure to business partners, such as insured customers and brokers, is closely monitored. Potential impairmentson 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 aprincipally Euro centric internationally diversified portfolio and to avoid large risk concentrations. From a Standard & Poor’s
rating scale or comparable perspective, the overall fixed income portfolio is almost completely invested in investment grade
debt securities which are rated ‘A-‘ or higher. If a corporate bond in which Atradius has indirectly invested (through aninvestment fund) falls below the minimum credit rating or is not rated, it should be reviewed by the Group Investment
Committee to decide whether the investment fund is still a suitable investment. The maximum concentration limit per
issuer (per legal entity and at Atradius level) is 5% of the market value of the financial investments of the legal entity or
Atradius. The concentration per issuer is evaluated by aggregating the exposure to a single issuer through both debt
investments and equity securities. The Group Investment Committee monitors this limit and action is taken if aconcentration limit is breached.
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 2016 and as at 31 December
2015, are presented in the following tables:
At 31 December 2016

AAA

AA

A

BBB

Other andNon-rated

Total

Receivables, claims and commissions arisingfrom reinsurance

-

235

225

1

25

486

Deposits received from reinsurers

-

(21)

(20)

-

(5)

(46)

Government bonds

185

292

56

12

15

560

Corporate bonds

7

148

969

91

3

1,218

Structured debt

-

-

1

3

-

4

-

8

13

1

7

29

33

26

65

55

-

179

-

40

142

93

12

287

225

728

1,451

256

57

2,717

(EUR million)
Receivables, claims, commissions and deposits
arising from reinsurance:

Debt securities:

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

39

90

Atradiusotherwise
statedAtradius| |All
Allamounts
amountsininthousands
thousandsofofEuro,
Euro,unlessunlessotherwise
statedAt 31 December 2015

AAA

AA

A

BBB

Other andNon-rated

Total

Receivables, claims and commissions arisingfrom reinsurance

-

259

285

3

29

576

Deposits received from reinsurers

-

(19)

(21)

(7)

-

(47)

Government bonds

165

284

13

12

5

479

Corporate bonds

6

100

837

104

7

1,054

Structured debt

-

-

1

3

-

4

(EUR million)
Receivables, claims, commissions and deposits
arising from reinsurance:

Debt securities:

Short-term investments:
Deposits withheld by ceding companies

-

5

14

4

7

30

Bank deposits under short-term investments

23

12

72

140

-

247

Cash and cash equivalents

-

22

34

167

8

231

194

663

1,235

426

56

2,574

Total

The counterparty credit ratings and the credit rating of the debt instruments are predominantly based on Standard & Poor’s
rating. In the absence of a Standard & Poor’s credit rating, Atradius uses Moody’s or Bloomberg Composite Ratings.

4.3.3 Liquidity risk
Atradius is exposed to liquidity risk if there is insufficient cash available to meet its financial obligations, when due, at areasonable cost. For Atradius, liquidity risks may arise if large scale short-term fluctuations occur to cash flows, such as adecline 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 andmeasure ongoing cash flow patterns and control liquidity by maintaining sufficient cash and highly marketable securities toreduce 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 four 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 maintains two uncommitted
credit lines in excess of EUR 1 million. These are in the form of an overdraft facility for a total amount of EUR 53 million(2015: EUR 53 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 the main reinsurance treaties. This clauseallows 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 ofinterest and non-interest bearing liabilities and assets. The tables include both interest and principal cash flows. To theextent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of thereporting period. Atradius has considered the impact of the cross-border cash pooling arrangement in this overview.
The tables have been drawn up based on the undiscounted contractual cash flows of financial liabilities based on the earliest
contractual repayment date. When Atradius has a choice of when an amount is paid, the financial liability is allocated to thelatest 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.

40

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

At 31 December 2016

Contractual cash flows (undiscounted)
Weighted
averageeffective
interest
rate %

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountSubordinated note

5.35%

-

13,12552,500521,439

248,437

Subordinated loan

5.00%

-

3,750

15,00092,74075,000

Deposits received fromreinsurers

0.27%

-

45,535--45,535-62,41067,500614,179

368,972

988,354442,280

1,283

1,561,155

Interest bearing liabilities

Total
Non-interest bearing liabilities
Insurance contracts
Payables-

232,746--

232,746

Total-

1,221,100

442,280

1,283

1,793,901

At 31 December 2015

Contractual cash flows (undiscounted)
Weighted
averageeffective
interest
rate %

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountSubordinated note

5.35%

-

13,12552,500547,500

248,289

Deposits received fromreinsurers

0.28%

-

47,005--47,005-60,13052,500547,500

295,294

Insurance contracts-

1,047,261

468,791

4,773

1,648,791

Payables-

195,207--

195,207

Total-

1,242,468

468,791

4,773

1,843,998

Interest bearing liabilities

Total
Non-interest bearing liabilities

41

92

Atradiusotherwise
statedAtradius| |All
Allamounts
amountsininthousands
thousandsofofEuro,
Euro,unlessunlessotherwise
statedAt 31 December 2016

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(0.03%)
0.00%1.33%-

254,658

1,482,492

61,387

1,781,141

80,025

127,893127

417

208,223

Cash: Cash and bank deposits

0.00%

286,340

129--

286,469

366,365

382,680

1,482,619

61,8042,275,833

Other financial assets-

290,929--

290,929

Reinsurance contracts-

400,280

179,122520

632,262

Receivables-

201,287--

201,287

Total-

892,496

179,122520

1,124,478

Interest bearing assets

Total
Non-interest bearing assets

At 31 December 2015

Contractual cash flows (undiscounted)
Weighted
averageeffective
interest
rate %

On demand

Less than 1
year

1 to 5 years> 5 years

Carrying
amountDebt securities

0.58%

-

332,484

1,190,786

49,441

1,536,876

Investments: deposits and cash
held for investments

0.00%2.00%

164,085

72,95934,127

6,059

277,230

Cash: Cash and bank deposits

0.10%

226,719

2,657

-

-

229,376

390,804

408,100

1,224,913

55,5002,043,482

Other financial assets-

398,158--

398,158

Reinsurance contracts-

438,171

196,141

1,997

689,849

Receivables-

204,575--

204,575

Total-

1,040,904

196,141

1,997

1,292,582

Interest bearing assets

Total
Non-interest bearing assets

42

93

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

4.4

Operational risk

4.4.1 Operational risk management
Operational risks are the risks of direct or indirect loss from inadequate or failed internal processes, people, and systems orexternal events. This definition is in line with industry practice as well as with the European Union Solvency II Framework
Directive.
The Operational Risk Management (ORM) unit is part of Atradius Risk Management department and is responsible fordeveloping methods for the identification, assessment and response to risks, and for monitoring and further enhancing theoverall risk management and control framework. The ORM unit works closely with both Internal Audit and the Legal andCompliance unit. At the highest level, operational risk is overseen by the Operational Risk Committee, which has a reporting
line through to the Chief Risk Officer.
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, risks and control self-assessment
procedures and business continuity plans. Additionally, risks and the related controls are discussed at all levels, locations
and units across the business, including the Management 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 oversight and assurance in an auditable and efficient manner, the ORM unit
employs a dedicated governance, risk and compliance software platform (the ’GRC portal‘) that integrates existing risk
management activities across the business.
In respect of external fraud, a specific department monitors the activity of customers and buyers to detect indications offraud and Atradius provides fraud awareness training to employees to help identify fraudulent buyers. Internal fraud isaddressed through manual and automated operational controls such as the segregation of duties, application of signingauthorities 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 business andfunctional 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 during meetings of the 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 selfassessments 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;
the resulting ‘in control’ sign-off process is overseen by a committee 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. Business continuity management at Atradius is based on the internationally recognised British
Standard BS25999 and aligned with the International Standard ISO223019. The ORM unit 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. These elements are of importance to ourcustomers, suppliers, staff and other stakeholders. Complying with relevant laws, rules and regulations and maintaining ahigh standard in terms of ethics and integrity, leads to lower operational risk and more stable business processes. The
Atradius Code of Conduct outlines the basic corporate, legal and ethical compliance principles and guidelines that apply to all

43

94Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise statedemployees of Atradius and that govern Atradius’ operations and its employees’ business conduct and actions. Individual
Compliance Codes address specific compliance areas in more detail and set out detailed compliance requirements that must
be complied with across Atradius and which must be included in existing business procedures. For the monitoring andtesting of effectiveness of these requirements, close alignment is sought with the activities of the ORM and Internal Audit
units.

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 sufficientavailable capital after meeting its financial obligations;
to meet the local regulatory capital requirements of all Atradius entities, including branches and subsidiaries
of Atradius 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; andminimising the overall cost of funding while preserving financial flexibility.

4.5.2 Atradius’ objectives, policies and processes with regard to capital
Available capital is measured and managed both from an accounting and economic perspective. Atradius considers thesolvency calculation models of the relevant regulatory authorities and credit rating agencies to actively manage capital toensure capital adequacy. Atradius’ policy is to maintain a sufficient excess above the minimum solvency capital required by
the relevant regulatory authorities.
Atradius has embedded processes and procedures to ensure compliance with externally imposed regulations and internallyimposed requirements for capital adequacy. Such compliance is ensured by:-a process of regular assessment of solvency needs, taking into account the business strategy, resulting risk
profile and applied risk limits;
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 regulatory solvency capital required is maintained, such thatlarge 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 and type of capitalthat 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 to impose additional capitalrequirements in excess of the required minimum.
In 2016, the capital of Atradius has been managed according to the Atradius guidelines and in close cooperation with theunits involved in managing the different factors related to capital. The Atradius entities were able to meet their financial
obligations and to comply with local legal and regulatory requirements.

4.5.4 Solvency II
Solvency II is the regulatory framework for (re-)insurance undertakings and groups domiciled in the EU; it became effective
on 1 January 2016. It replaced the former regulatory regime of 14 directives which were commonly known as “Solvency I”.

4495Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Atradius Crédito y Caución, S.A. de Seguros y Reaseguros in Spain and Atradius Re in Ireland are the regulated entities thatare subject to Solvency II. Under Solvency II guidelines Group supervision takes place at the ultimate parent Grupo Catalana
Occidente S.A.
The regulated entities within Atradius currently apply the Standard Formula for calculating their regulatory capitalrequirements; the ultimate parent has applied for supervisory approval to use a Partial Internal Model to calculate
regulatory capital requirements for its credit insurance business. Approval is expected to be received in the course of 2017.

45

96

Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise stated5

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 insurance
business is split into the segments Credit insurance which includes Instalment credit protection (ICP), Bonding andReinsurance due to the different nature of the related products and the associated insurance liabilities. 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 are on anarm’s length basis in a manner similar to transactions with third parties. The accounting policies of the reportable segments
are the same as described in Note 2.
Information regarding these segments is presented in the following tables:
Business segment

Creditinsurance

Bonding Reinsurance

Total
insurancebusiness

Services

Intersegment
elimination

Group
costs

Total

1,316,365

109,199

132,024

1,557,588---

1,557,588

127,396--

127,396

75,683--203,079

-

-

-

-

3,419

(3,419)--Total revenue

1,443,761

109,199

132,024

1,684,984

79,102(3,419)-1,760,667

Insurance premium
ceded to reinsurers(593,495)(48,635)(21,701)(663,831)---(663,831)

Total segment income
after reinsurance

850,266

60,564

110,323

1,021,153

79,102(3,419)-1,096,836(600,704)(7,901)(92,542)(701,147)

-

2,755

-

(698,392)

2016
Insurance premium
revenue
Service and other income
Inter-segment revenue

Insurance claims and loss
adjustment expenses
Insurance claims and loss
adjustment expenses
recovered fromreinsurers

252,416948

18,532271,896---

271,896

Net insurance claims
Gross operating
expensesCommission received forbusiness ceded toreinsurers(348,288)(6,953)(74,010)(429,251)

-

2,755

-

(426,496)(510,594)(40,884)(54,927)(606,405)(70,471)664(6,986)(683,198)

227,737

18,102

6,034

251,873---

251,873

Net operating expenses
Operating segment
result(282,857)(22,782)(48,893)(354,532)(70,471)664(6,986)(431,325)

219,12130,829(12,580)

237,370

8,631-(6,986)

239,015

Share of income ofassociated companies
Net income frominvestments

26,68918,279Finance income

3,325

Finance expenses
Result for the year
before tax(12,744)274,564

Income tax expense(62,792)

Result for the year

211,772

46

97

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Business segment

Creditinsurance

Bonding

Reinsurance

Total
insurancebusiness

Services

Intersegment
elimination

Total

Reinsurance contracts

426,959

158,51446,789632,262--

632,262

Receivables

172,092

20,084

5,902

198,078

7,267(4,058)201,287

-

-

-

-

-

-

3,557,953

Total assets

599,051

178,598

52,691

830,340

7,267(4,058)4,391,502

Insurance contracts

882,289

281,977

396,889

1,561,155--

1,561,155

Payables146,048

84,946887

231,881

12,530(11,665)

232,746

-

-

-

-

-

-

972,076

1,028,337

366,923

397,776

1,793,036

12,530(11,665)

2,765,977

2,640

139

27

2,806

758

-

3,564

2016

Unallocated assets

Unallocated liabilities
Total liabilities
Total year end number of
employees (full-time equivalent)47

98Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise stated

Business segment

Creditinsurance

Bonding

Reinsurance

Total
insurancebusiness

Services

Group
costs

Total

1,300,484

101,777

134,744

1,537,005---

1,537,005

121,454--

121,45459,300--180,754

-

-

-

-

3,961

(3,961)--

Total revenue

1,421,938

101,777

Insurance premium ceded
to reinsurers

134,744

1,658,459

63,261(3,961)-

1,717,759(609,502)

Total segment income
after reinsurance(46,753)(18,353)(674,608)---(674,608)

Insurance claims and loss
adjustment expenses

812,436

55,024

116,391

983,851

63,261(3,961)-

1,043,151

Insurance claims and loss
adjustment expenses
recovered from reinsurers(622,395)

19,084(118,420)(721,731)

-

3,209

-

(718,522)

300,954(15,259)

23,193308,888---308,888

Net insurance claims(321,441)

3,825(95,227)(412,843)

-

3,209

-

(409,634)

Gross operating expenses
Commission received forbusiness ceded toreinsurers(507,846)(35,955)(56,776)(600,577)(55,307)752(15,505)(670,637)

239,762

17,244

5,757

262,763---262,763

Net operating expenses(268,084)(18,711)(51,019)(337,814)(55,307)752(15,505)(407,874)

Operating segment result

222,911

40,138(29,855)

233,194

7,954-(15,505)

225,643

2015
Insurance premium
revenue
Service and other income
Inter-segment revenue

Intersegment
eliminatio n

Share of income ofassociated companies
Net income frominvestments

35,234

Finance income

4,108

Finance expenses
Result for the year before
tax(17,597)248,170

Income tax expense(69,949)

Result for the year

178,221

782

48

99

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

Business segment

Creditinsurance

Bonding Reinsurance

Total
insurancebusiness

Services

Intersegment
elimination

Total

Reinsurance contracts

482,361

166,203

41,285689,849--

689,849

Receivables

171,904

23,401

6,347

201,652

5,419(2,496)

204,575

-

-

-

-

-

-

3,355,734

Total assets

654,265

189,604

47,632

891,501

5,419(2,496)

4,250,158

Insurance contracts

998,756

285,181364,854

1,648,791--

1,648,791

Payables173,414

20,52963

194,006

10,902(9,701)

195,207

-

-

-

-

-

-

905,911

1,172,170

305,710

364,917

1,842,797

10,902(9,701)

2,749,909

2,636

136

25

2,797

364

-

3,161

2015

Unallocated assets

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

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 58% credit insurance contracts and approximately 42%
bonding (2015: 60% and 40% respectively), based on premium volume.
Revenue from external customers allocated to the region in which the insurance contract is issued or services are renderedis presented in the following table:
2016

2015

Spain and Portugal

394,254399,709

France, Belgium, Italy and Luxembourg

326,056

313,995

Germany, Central and Eastern Europe

299,969

281,109

United Kingdom and Ireland

266,502273,655

The Netherlands

147,527

132,437

Oceania and Asia

122,699

112,938

Americas111,576

111,275

Nordic countries

92,084

92,641

1,760,667

1,717,759

Total

Revenue is derived from a large number of customers and no single customer (or group under common control) contributes
more than 10% to Atradius’ revenue.

49

100

Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise statedTotal assets and capital expenditure allocated based on where the assets are located are presented in the following table:
AssetsNon-current assets *Additions to non-current
assets *

2016

2015

2016

2015

2016

2015

Spain and Portugal

841,619

927,603

118,365

116,609

8,276

3,722

France, Belgium, Italy and Luxembourg

354,682

441,400

22,831

20,185

4,833

2,098

Germany, Central and Eastern Europe

277,862

334,189

5,681

4,683

2,791

1,646

United Kingdom and Ireland

1,431,163

1,345,145

27,792

26,934

14,106

10,183

The Netherlands

928,258

562,41730,951

13,076

14,522

8,546

Nordic countries

140,349

240,360

1,326

1,400

405

398

Americas230,086

201,243

2,501

2,527

533

197

Oceania and Asia

187,483

197,801

1,860

1,796

569

957

4,391,502

4,250,158

211,307

187,21046,03527,747

Total* Non-current assets included in the above table comprise intangible assets (other than goodwill), property, plant and equipment and investment property.

50

101

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

6

Intangible assets

2016

Goodwill

Software

Other *Total

At cost at 1 January

118,378

169,708

24,661

312,747

Business combinations

32,943

7,944

5,800

46,687

Additions-28,242

1,739

29,981

Disposals-(2,097)-(2,097)

Effect of movements in foreign exchange rates(9)(10,373)38(10,344)

151,312

193,424

32,238376,974

At cost at 31 December

Accumulated amortisation and impairments at 1 January(735)(121,789)(16,723)(139,247)

Amortisation charge for the year-

(12,740)(2,672)(15,412)

Disposals

-

2,083

-

2,083

Impairment-(5,683)-(5,683)

(1)
(736)

7,327
(130,802)(36)(19,431)7,290(150,969)

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

117,643

47,919

7,938

173,500

Balance at 31 December

150,576

62,622

12,805226,0052015

Goodwill

Software

Other *Total

At cost at 1 January

118,377

164,980

24,537

307,894

Additions-

20,238-20,238

Disposals-(19,014)-(19,014)

Effect of movements in foreign exchange rates

1

3,504

124

3,629

118,378

169,708

24,661

312,747

At cost at 31 December

Accumulated amortisation and impairments at 1 January(735)(122,966)(15,432)(139,133)

Amortisation charge for the year-

(12,610)(1,187)(13,797)

Disposals-

19,014-19,014

Impairment-(2,778)-(2,778)(735)(2,449)(121,789)(104)(16,723)(2,553)(139,247)

Balance at 1 January

117,642

42,014

9,105

168,761

Balance at 31 December

117,643

47,919

7,938

173,500

Effect of movements in foreign exchange rates
Accumulated amortisation and impairments at 31 December* 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. During 2016 there was no
impairment charge (2015: no impairment charge).
The goodwill allocated to the main cash-generating units or groups of units (CGU’s) is presented in the following table:

51

102

Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise statedCash-Generating Units

2016

2015

ACyC 1)

98,797

98,797

Graydon Holding N.V.

30,931-

Atradius Trade Credit Insurance Inc.

4,750

4,750

Atradius Collections B.V.

6,426

6,426

ACyC. (France)

2,767

2,767

2,592

2,599

ACyC (Nordic bonding)

2)

Other

4,313

2,304

Total

150,576

117,643

1) The CGU ACyC includes the local business in Spain and Portugal, Iberinform Internacional S.A. and Crédito y Caución Seguradora de Crédito e Garantias S.A..
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 discounted cash flow model. The cash flows are estimated using
a projection period and a normalised period. The projection period is 10 years, where the first 1-3 year projections are basedon financial budgets and/or forecasts. The remaining years are estimated using ratios and growth rates that converge
towards their normalised term value. For the main portion of the goodwill, the discount rate (after tax) used is 8.62% (2015:
8.53%) and the terminal value is calculated based on the free cash flows in year 11, for which a normalised long-term annual
cash flow is calculated and a long-term growth rate of 0.5% (2015: 0.5%). The discount rate used is close to cost of equity.
Any profits, after fulfilling minimum capital requirements, are assumed to be distributable dividends. Minimum capitalrequirements are calculated based on the Solvency II standard formula and minimum shareholders equity required (nondistributable).
The goodwill of Graydon Holding N.V. is based on the fair value of EUR 57 million as per valuation date 1 November 2016.
Cash flows are discounted at a cost of equity of 11.23%.
SoftwareAtradius assessed all capitalised software to determine if the criteria for capitalisation are being met. In 2016, Atradiusdecided EUR 5.7 million of the capitalised software should be impaired (2015: EUR 2.8 million), since the expected benefitsof the developed software cannot be achieved.

52

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

7

Property, plant and equipment & investment property

2016

Land &
buildings

Fixtures &fittings

IT hardware

Total
property,plant &
equipment

Investment
property

At cost at 1 January

108,582

51,891

48,087

208,560

14,615Business combinations

-

207

402

609

-

Additions

14

9,204

5,481

14,699-

Disposals
Effect of movements in foreign exchange
rates

-

(2,411)(1,735)(4,146)-(209)(1,661)(3,057)(4,927)(97)

108,387

57,23049,178214,795

14,518

Accumulated depreciation andimpairments at 1 January(9,422)(40,109)(37,776)(87,307)(4,517)

Depreciation charge for the year

(1,032)(3,628)(4,572)(9,232)(113)

Disposals

-

2,197

1,702

3,899

-

Impairment loss
Effect of movements in foreign exchange
rates
Accumulated depreciation andimpairments at 31 December

-

-

-

-

11

28

1,513

2,272

3,813

9

(10,426)(40,027)(38,374)(88,827)(4,610)

Balance at 1 January

99,16011,782

10,311

121,253

10,098

Balance at 31 December

97,961

17,203

10,804125,968

9,908

At cost at 31 December

53

104

Atradiusotherwise
statedAtradius| |All
Allamounts
amountsininthousands
thousandsofofEuro,
Euro,unlessunlessotherwise
stated2015

Land &
buildings

Fixtures &fittings

IT hardware

Total
property,plant &
equipment

Investment
property

At cost at 1 January

108,638

51,211

51,379211,228

14,750

45

3,196

4,268

7,509

-

-

(3,246)(8,914)(12,160)

(100)

(101)

730

1,354

1,983

(35)

108,582

51,891

48,087

208,560

14,615

Accumulated depreciation andimpairments at 1 January(8,334)(39,103)(40,347)(87,784)(4,372)

Depreciation charge for the year

(1,105)(3,504)(5,431)(10,040)(54)

Disposals

-

3,123

8,893

12,01639

Impairment loss
Effect of movements in foreign exchange
rates
Accumulated depreciation andimpairments at 31 December

-

-

-

-

(134)

17

(625)

(891)

(1,499)4(9,422)(40,109)(37,776)(87,307)(4,517)

Balance at 1 January

100,304

12,108

11,032

123,444

10,378

Balance at 31 December

99,16011,782

10,311

121,253

10,098Additions
Disposals
Effect of movements in foreign exchange
rates
At cost at 31 December

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

2016

2015

2016

2015

Spain and Portugal

83,20579,822

8,267

8,607

Italy

20,62020,620745

745

Mexico

3,848

3,813

1,283

1,479

-

-

460

906

Other

971

782

-

-

Total

108,644

105,037

10,755

11,737The Netherlands

Fair value measurement
Land and buildings are independently appraised by real estate valuators, which are registered in the relevant countries andhave appropriate qualifications and experience in the valuation of properties. Atradius usually revalues land and buildings
every two to three years.
All property is valued using valuation techniques. All significant inputs used in the measurement are market observable andthe fair value is therefore classified in Level 2 in the fair value hierarchy (as in 2015). Valuation techniques used are: Market(comparison) approach, Income approach (discounted cash flow method) and Cost approach. The valuations for Spanish
property are in accordance with the rules applicable to insurance companies in connection with the valuation of assets tocover technical provisions. Significant valuation inputs used to determine the fair value measurements based on techniques
used are construction features, location (and/or conditions) and transport utilities.

54

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

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.
Property own use
A property in Italy with a carrying value of EUR 14.8 million (2015: EUR 5.4 million) is no longer subject to a legal charge(2015: EUR 2.7 million).
Investment property
Investment properties in Italy with a carrying value of EUR 646 thousand (2015: EUR 346 thousand) are subject to a legal
charge for the full amount.
The investment property can be classified as follows: 88% office (2015: 87%) and 12% retail (2015: 13%).
Direct operating expenses incurred (including repairs and maintenance) arising from investment property are EUR 72
thousand (2015: EUR 101 thousand). During the year an amount of EUR 1 million (2015: EUR 0.6 million) has beenrecognised as rental income from investment property for lease contracts. These contracts have remaining terms of
between 1 and 10 years. Expected rental income arising from these contracts for next year is EUR 0.8 million of which EUR
0.8 million are for non-cancellable contracts.

55

106

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

Subsidiaries

The following table sets forth, as at 31 December 2016 and 2015, 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 in alphabeticalorder.
Country ofincorporation% interest
heldType of business

The Netherlands

100.00%

Collections

Spain

100.00%Credit insurance

Atradius Finance B.V.

The Netherlands

100.00%Finance

Atradius Information Services B.V.

The Netherlands

100.00%Information services

Atradius Insurance Holding N.V.

The Netherlands

100.00%Holding

Atradius Participations Holding B.V.

The Netherlands

100.00%Holding

Atradius Reinsurance DAC

Ireland100.00%

Reinsurance

Atradius Rus Credit Insurance LLC

Russia100.00%Credit insurance

Atradius Seguros de Crédito, S.A.

Mexico100.00%Credit insurance

Atradius Trade Credit Insurance, Inc.

USA

100.00%Credit insurance

Crédito y Caución Seguradora de Crédito e Garantias SA

Brazil100.00%Credit insurance

The Netherlands

100.00%Information services

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

Graydon Holding N.V.

1)1) Atradius increased its shareholdings in Graydon Holding N.V. from 45% to 100% as per 15th September 2016.
On 2 February 2016, Atradius Insurance Holding N.V., as the sole shareholder, has approved the merger of Atradius Credit
Insurance N.V. and Compañía Española de Seguros y Reaseguros de Crédito y Caución, S.A.u. into one single legal entity by
the means of the absorption of the former by the latter. Atradius N.V. will remain the Dutch holding company of a leadinginternational network of credit insurance, bonding, reinsurance, debt collections, and information services companies.
The resulting legal structure ACyC (Atradius Crédito y Caución S.A. de Seguros y Reaseguros), that is effective as per 30
December 2016, reduces the complexity of working with two European insurance carriers, different regulatoryenvironments and dual governance frameworks (particularly with the current Solvency II regulation) without any impact on
the business model, financial statements and established brands. Grupo Catalana Occidente remains committed to keeping
Atradius’ entities well capitalised and with the same financial and operational independence.

56

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

9

Investments in associated companies

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

Balance at 1 January
Share of income of associated companies

1)

2016

2015

35,39639,392

6,808

782

-

(1,829)(3,449)(3,040)831

91

39,58635,396

Dividends received
Disposals
Effect of movements in foreign exchange rates
Balance at 31 December
1) Excluding the result of sale of associates

None of the associated companies is listed. All information from the associated companies, unless otherwise stated, is basedon balance sheet dates between 30 September and 31 December.
Country ofincorporation% interest
heldType of business

CLAL Credit Insurance Ltd., Tel Aviv

Israel20.00%

Credit insurance

Al Mulla Atradius Insurance Consultancy & Brokerage L.L.C., Dubai

UAE

49.00%

Dormant

Compañía de Seguros de Crédito Continental S.A., Santiago de Chile

Chile

The Lebanese Credit Insurer s.a.l., Beirut

Lebanon2) Minus one share

57

108

2)

50.00%

Credit insurance

48.90%

Credit insuranceAtradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise stated

The following tables show summarised financial information of Atradius’ interest in associated companies and the financial
information of the associated companies:
2016

GraydonHolding
N.V.

CLAL Compañía deCreditSeguros deInsurance
CréditoLtd. Continental
S.A.

The
Lebanese
CreditInsurers.a.l.

Other

Total

Atradius’ interest
Goodwill

-

380

1,611

-

-

1,991

Net assets

-

9,573

26,176

1,846-

37,595Carrying amount

-

9,953

27,787

1,846-

39,586

Share of income of associated companies

-

81

7,141

80

-

7,302

Result sale

-

-

-

-

-

-

Other income/(expense)

-

-

-

-

(494)

(494)

Dividends received

-

-

-

-

-

-

Assets

-77,886

106,502

14,723-

199,111

Liabilities-

30,02054,15010,951-

95,121

Revenue-

13,160

9,605

3,676

-

26,441

Net assets-

47,86752,352

3,772-

103,991

Result for the year-405

14,282

163-

14,850

-

380

1,611

-

-

1,991

Associated companies

2015
Atradius’ interest
Goodwill
Net assets

5,769

8,850

17,0791,707-

33,405Carrying amount

5,769

9,230

18,6901,707-

35,396

Share of income of associated companies(1,726)

991

1,523

(599)

242

431

Result sale

-

-

-

-

(157)

(157)

Other income

-

-

-

-

508

508

Dividends received

-

-

1,829

-

-

1,829

Assets53,82771,725

113,426

10,676-249,654

Liabilities

41,00627,474

79,2697,186-

154,935

Revenue

52,702

12,966

8,241

2,520

-

76,429Net assets

12,821

44,251

34,1573,490-

94,719Result for the year

(3,835)

4,956

3,046

(1,225)-2,942

Associated companies

Excluding the revaluation of our existing 45% stake in Graydon Holding N.V. after the acquisition of the remaining 55% of
the outstanding shares of Graydon Holding N.V. on 15 September 2016. For more details on the business combination, seeNote 34.
Transactions with associated companies are disclosed in Note 36.

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

10 Financial investments
Financial investments
classified by measurement
category and nature

Available-for-saleLoans and receivables

Total

2016

2015

2016

2015

2016

2015

Equity securities

290,904

398,056--

290,904

398,056

Debt securities

1,781,141

1,536,876--

1,781,141

1,536,876

Loans

-

-

25

102

25

102

Short-term investments--

181,503

210,797

181,503

210,797

Cash held for investments--

26,72066,433

26,72066,4332,072,045

1,934,932

208,248277,332

2,280,293

2,212,264

Total

Movements in available-forsale financial investments

Equity securities

Debt securities

Total

2016

2015

2016

2015

2016

2015

398,056

417,604

1,536,876

1,295,133

1,934,932

1,712,737

45,567309,566

920,840

726,592

966,407

1,036,158

Disposals
Amortisation charge for theyear
Revaluations through othercomprehensive income andincome statement
Effect of movements inforeign exchange rates(152,729)(337,470)(670,542)(462,983)(823,271)(800,453)--(26,906)(25,018)(26,906)(25,018)(84)

10,15519,090(4,422)

19,006

5,733

94(1,799)

1,783

7,574

1,877

5,775

Balance at 31 December

290,904

398,056

1,781,141

1,536,876

2,072,045

1,934,932

2016

2015

Accounts receivable on insurance and reinsurance business

153,405

175,373

Amounts owed by policyholders and direct insurance operations

129,983

122,902

Receivables arising out of reinsurance

23,42252,471

Balance at 1 January
Additions

11 Receivables

Other accounts receivable

47,882

29,202

Total

201,287

204,575

The outstanding receivables are substantially all current and consequently their fair values do not materially differ fromtheir carrying amounts.
There is no concentration of credit risk in respect of receivables as Atradius has a large number of internationally dispersed
debtors (see Note 4.3.2).
An amount of EUR 84.6 million (2015: EUR 81.5 million) relates to past due receivables on insurance and reinsurance
business for which no impairment loss has been recognised, 89.7% (2015: 93.2%) relates to receivables ageing less than
three months.
All receivables are considered for impairment testing. As of 31 December 2016, receivables of EUR 30.2 million (2015: EUR
39.2 million) were considered to be partially impaired. The amount of the impairment taken related to these receivables was
EUR 17.6 million (2015: EUR 22.9 million). This balance takes into account that a portion of the impaired receivables will berecovered. Atradius does not hold any collateral over these balances.

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

Movements on the provision for impairment of receivables are presented in the following table:
2016

2015

Balance at 1 January

22,964

22,527

Impairment of receivables

3,846

5,837

Receivables written off during the year as uncollectable(8,592)(2,642)

Unused amounts reversed(642)(2,758)

Balance at 31 December

17,57622,964The movement in the provision for impaired receivables for the insurance business is accounted for on the premium line.
Amounts charged to the allowance account are generally written off when there is no expectation of recovery.

12 Deferred acquisition costs
2016

2015

Balance at 1 January

73,91972,270Change in deferred acquisition costs(2,749)2,519

Effect of movements in foreign exchange rates

1,954

(870)

Balance at 31 December

73,12473,919Current
Non-current

50,472
22,65250,90223,0172016

2015

Pipeline and ceded return premium

343,965

335,360

Prepayments and accrued interest

39,55040,863

Net plan pension asset

2,584

17,812

Reimbursement rights

12,556

8,722

Other

21,406

21,587

Total

420,061

424,344

13 Miscellaneous assets and accruals

Pipeline premium relates to shipments made by Atradius’ policyholders for which Atradius is at risk but has not invoiced thepremium.
The miscellaneous assets and accruals are substantially all current and consequently the fair values of these assets do notmaterially differ from their carrying amounts.
The reimbursement rights relate to the Spanish pension plans. Since the related policies do not qualify as an insurance
policy under IAS 19, the fair value cannot be netted with the related pension liability (see Note 17).
The net plan pension asset relates to the UK pension plan concerns the surplus of plan assets as per 31 December 2016 is
EUR 2.6 million (2015: EUR 17.8 million) (see Note 17).

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

14 Cash and cash equivalents

Cash at bank and on hand

2016

2015

286,951

228,050

Short-term bank deposits

129

2,657

Cash and cash equivalents

287,080

230,707

Cash and cash equivalents

287,080

230,707(611)(1,331)

286,469

229,376

Bank overdrafts
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 structure withinterest compensation per currency. The cash pool arrangement allows for offsetting of cash balances of branches within alegal entity. However, it does not allow offsetting between different legal entities. Therefore, in the statement of financial
position, the related bank overdrafts that do not qualify for offsetting are presented separately as liabilities underborrowings.

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 (2015: the same) of which 79,122,142 ordinary shares were issued and fully paid
(2015: the same). The fully paid ordinary shares carry one vote per share and carry the right to dividends.

15.2

Share premium reserve
2016

2015

639,228

704,108-(64,880)

639,228

639,228

2016

2015

Balance at 1 January

37,17648,085

Change in revaluation reserve - gross

21,382

6,649

Change in revaluation reserve - tax(3,032)(1,524)

Net (gains)/losses transferred to net profit on disposal - gross(1,058)(19,223)

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

289

3,189

54,757

37,176

Balance at 1 January
Dividends
Balance at 31 December

15.3

Revaluation reserve

Balance at 31 December

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

15.4

Currency translation reserve
2016

2015

Balance at 1 January(31,733)(35,115)

Change in currency translation reserve - gross(1,869)3,782

Change in currency translation reserve - tax

1,044

(400)

(32,558)(31,733)

2016

2015

Balance at 1 January(138,190)(139,586)

Recognised actuarial gains/(losses)(32,120)

1,396

Change in pension reserve - gross(40,045)

2,795

Change in pension reserve - tax

7,925(1,399)(170,310)(138,190)

2016

2015

Balance at 1 January914,646

736,425

Dividends(71,210)-

Result for the year

211,795

178,2211,055,231

914,646

Balance at 31 December
Atradius’ significant foreign currencies and sensitivity to fluctuations are set out in Note 4.3.

15.5

Pension reserve

Balance at 31 December

15.6

Retained earnings

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. The Dutch Civil Code contains the
restriction that dividends can only be paid up to an amount equal to the excess of the Company’s shareholders’ equity andreserves required by law. Additionally, certain subsidiaries are subject to restrictions on the amount of funds they may
distribute in the form of dividends or otherwise and also in respect of minimum capital requirements that are imposed byindustry regulators in the countries in which the subsidiaries operate.
The Company distributes dividends out of the retained earnings balance. If this balance is insufficient, the Company will
distribute dividends out of the share premium reserve (see Note 4.2 in the Company financial statements).

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

16 Subordinated debt
2016

2015

Balance at 1 January248,289

248,141

Accretion of interest

148

148

-

-

Addition

75,000-

Balance at 31 December

323,437

248,289

Redemption

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 payableannually in the first 10 years, which will thereafter be reset to a floating 3 month-EURIBOR plus a margin of 5.031% perannum payable quarterly for the remaining 20 years. The notes do qualify as regulatory capital under the Solvency II
grandfathering rules. The notes are issued by Atradius Finance B.V. and guaranteed by the Company. The notes are listed on
the Luxembourg Stock Exchange.
On 20 April 2016 the shareholders of Atradius N.V. provided a subordinated loan to Atradius Re with a principal amount of
EUR 75 million. The subordinated loan bears interest at a fixed rate of 5.0% per annum, payable annually in arrears on 20
April each year until and including the maturity date: 20 April 2026. Atradius Re 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 is EUR 234 million (2015: EUR 226 million). The fair value
estimate of the subordinated loan issued by Atradius Re is EUR 77 million. Both the fair value of the subordinated notes andthe 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 of the subordinated notes is based on binding quotes from independent brokers. The fair value of thesubordinated loan is based on a valuation model using observable data. The fair value estimate of the subordinated loan isprovided by an external independent valuation company, which uses its own proprietary valuation systems to value
securities supported by economic and market assumptions from financial information providers. The model calculates thepresent value of the subordinated loan’s cash flows discounted using the Euro government bond yield curve as abenchmark and applying an appropriate risk spread. The risk spread applied is estimated using the credit spreads of market
quoted subordinated bond issues from similar issuers and with similar rating and maturity profiles.

17 Employee benefit assets and liabilities

Retirement benefits
Other long-term employee benefits
Total

17.1

2016

2015

104,352

89,012

5,099

4,923

109,451

93,935Retirement 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 93% (2015: 93%) of thedefined benefit obligation. The other plans relate to Spain and Portugal, Italy, Switzerland, Sweden, Belgium, Norway,
France and Mexico. The recognition of assets and liabilities is determined separately for each plan.
Within Atradius there are also defined contribution plans. The contributions to these plans are recognised as expenses in theincome statement. The total contributions amounted to EUR 10.4 million in 2016 (2015: EUR 9.9 million).

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

Defined benefit obligation

Fair value of plan assets

Net defined benefit (asset)
liability

2016

2015

2016

2015

2016

2015

758,194732,723

669,182

654,282

89,01278,441

Current service cost

12,362

20,200--12,362

20,200

Past service cost

(8,287)43--(8,287)43

Interest cost / income

19,475

20,66318,70019,496775

1,167

Administration costs

450

538

-

-

450

538

7,059

-

-

-

7,059

-

10,535

28

7,920

(491)

2,615

519

41,594

41,472

26,62019,005

14,974

22,467

1,384

225

-

-

1,384

225

- financial assumptions

108,191(5,246)--108,191(5,246)- experience adjustments(8,749)(11,512)--(8,749)(11,512)--55,893(13,115)(55,893)

13,115

Effect of movements in foreignexchange rates(54,210)

16,549(53,020)

16,753(1,190)(204)

Total included in OCI

46,616

16

2,873

3,638

43,743(3,622)Contributions paid by the employer(3,154)(2,994)24,99425,928(28,148)(28,922)

Plan participants contributions

2,119

2,284

2,119

2,284

-

-

(16,698)(15,936)(16,698)(18,772)

-

2,836

(140)

629

(140)

629

-

-

-

-

15,228(17,812)(15,228)

17,812

Total other(17,873)(16,017)25,503(7,743)(43,376)(8,274)

Balance at 31 December

828,531

758,194

724,178

669,182

104,352

89,012

Balance at 1 January
Included in the income statement:

Cost of Termination Benefits
Effect of movements in foreignexchange rates
Total included in the income
statement
Included in OCI:
Remeasurement loss (gain):
Actuarial loss (gain) arising from:- demographic assumptions

Return on plan assets excludinginterest income

Other:

Benefits paid
Additional benefits
Reclassification of surplus plan
assetsPlan 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 16.7 million (2015: EUR 17.9 million) are classified as financial investments since in the eventof bankruptcy, these assets are not fully secured for the members of the pension plan. In the UK, EUR 29.7 million offinancial investments (2015: EUR 28.5 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.

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

The surplus of one of the UK pension plans as per 31 December 2016 is EUR 2.6 million (2015: EUR 17.8 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 as reimbursement rights, which
are recorded as part of other assets for an amount of EUR 12.2 million (2015: EUR 8.7 million). At the end of 2016, thedefined benefit obligation related to the reimbursement rights amounts to EUR 24.7 million (2015: EUR 25.1 million). Thissame defined benefit obligation has in addition plan assets of EUR 14.8 million (2015: EUR 12.5 million).
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

173 active members (2015: 196
active members).
494 inactive members (2015: 0
inactive members).

508 active members (2015:503 active members).
418 inactive members (2015:
407 inactive members).

Defined benefit
obligation
Plan assets

EUR 285 million (2015: EUR
263 million).
EUR 287 million (2015: EUR
281 million).

Remeasurement
gain (loss)
through OCI
Fundingarrangement

EUR 20.3 million - loss (2015:
EUR 6.4 million - gain).

EUR 118.5 million (2015: EUR
111 million).
EUR 74.7 million (2015: EUR 70
million). Assets of EUR 16.7
million (2015: EUR 17.9 million)
are recognised as part of thefinancial investments.
EUR 1.7 million – loss (2015:
EUR 0.0 million - gain).

Employeecontributions

In 2016 contributions
amounted to 5.5% (2015: 5%)of the eligible salary.
Every three years an ALMstudy is performed to review
the investment policy.

ALM-strategy

The basis of the funding
agreement lies in the Trust
Deed and Rules. The pension
fund performs triennial
actuarial valuations todetermine employer
contributions.

The investment policy is to holdgovernment and corporate
bonds in respect of pensioners
to broadly match their liabilities
and to hold assets expecting todeliver a return in respect of
the non-pensioners.

The Netherlands
Pension entitlements are
based on a percentage of theaverage salary (maximum of
EUR 0.1 million - closed to
new employees).
333 active members (2015:356 active members).
1,319 inactive members(2015: 1,355 inactive
members).
EUR 348 million (2015: EUR
310 million).
EUR 321.7 million (2015: EUR
297 million).

EUR 14.2 million - loss (2015:
EUR 1.4 million - loss).

A Contractual Trust Agreement
is established as a financing
vehicle to cover part of thepension liabilities. There is no
specific funding arrangement
although the assets must
exceed the initially fundedamount of EUR 39.2 million.
None; all contributions are
made by the employer.

The employer pays a yearlybase premium as apercentage of the total sumof eligible salaries of all active
participants which cannot be
below the cost-effective
premium for that year.

The investment objectives andpolicies are developed based on
an ALM-study.

At least once every three
years an ALM-study is
performed in which theimpact of the strategic
investment policies areanalysed.

The investment policy limits
the interest rate risk by
restricting the investment inbonds to fixed rate bonds.
Equity price risk is controlled
by investing according to the
Dow Jones Euro Stix 50 Index.

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Employees contribute 7% of
their eligible salary.

The interest rate risk ispartially hedged within theinvestment portfolio by theuse of debt instruments incombination with liability
driven investment funds.

Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise statedFair 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

2016

2015

Cash and cash equivalents

2,432

1,664

Equity instruments

289,179

251,003

Debt instruments

184,302

208,606

Investment funds

210,707

172,613

Insurance contracts

23,891

20,604

Real estate

13,667

14,692

Total

724,178

669,182

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 expected rates of return on individual categories of plan assets are determined by reference to relevant indicespublished by the stock exchange of the particular country. The overall expected rate of return is calculated by weighting theindividual rates for each asset class in accordance with the anticipated balance in the plan’s investment portfolio. The actual
return on plan assets (including reimbursement rights) was EUR 78.2 million (2015: EUR 5.8 million).
In 2017 Atradius expects to contribute approximately EUR 16.0 million to defined benefit plans.
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:
Principal actuarial
assumptions

United Kingdom
2016

2015

2016

2015

2016

2015

Discount rate

2.50%

3.75%

1.75%

2.25%

1.75%

2.25%

Price inflation rate

3.25%

3.25%

1.50%

1.75%

1.75%

1.75%

Expected increase of futuresalaries

2.40%

2.75%

2.05%

2.80%

1.75%

1.75%

3.00%

3.00%

1.25%

1.50%

0.875%

0.875%CMI 2015(1.5% LTR)

CMI 2015(1.5% LTR)

Heubeck
Richttafeln
2005 G

Heubeck
Richttafeln
2005 G

Prognosetafel
AG2016+ adjusted
experience

Prognosetafel
AG2014+ adjusted
experience

20

19

17

17

22

20

Expected increase of future
benefit levels
Mortality table

Duration in years

Germany

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The Netherlands

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

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

2016

2015

Increase

Decrease

Increase

Decrease(135,294)

178,635(115,940)

154,362

Price inflation rate (1% movement)

92,574(89,035)

90,408(76,652)

Future salary growth (1% movement)

18,702(17,627)

21,031(19,398)

Future pension growth (1% movement)

140,618(110,748)

121,160(100,601)

Future mortality (+1 year)

28,544n/a

23,098n/aDiscount rate (1% movement)

17.2

Defined benefit costs

A total defined benefit cost of EUR 12.2 million (2015: EUR 20.6 million) is recognised in the income statement under net
operating expenses (see Note 27). EUR 11.7 million (2015: EUR 20.8 million) relates to pension plans and EUR 0.5 million(2015: EUR -0.2 million) to other long-term employee benefits.

18 Insurance contracts
Credit insurance

Gross

Reinsurance
asset
2016

Net

Gross

Reinsurance
asset
2015

Net

283,867(143,924)

139,943344,344(168,041)

176,303

511,587(232,790)

278,797563,726(255,644)

308,082

Claims provisions
Provision for unearned
premium

795,454(376,714)

418,740

908,070(423,685)

484,385

285,841(97,034)

188,807292,852(99,961)

192,891

Total

1,081,295(473,748)

607,547

1,200,922(523,646)

677,276

201,723(78,821)122,902

185,524(91,543)

93,98164,356(7,263)57,09367,173(8,118)59,055

Claims provisions
Provision for unearned
premium

266,079(86,084)

179,995

252,697(99,661)

153,036

213,781(72,430)

141,351

195,172(66,542)

128,630

Total

479,860(158,514)

321,346447,869(166,203)

281,666

Total insurance contracts

1,561,155(632,262)

928,893

1,648,791(689,849)

958,942

Current

1,072,054(434,178)

637,876

1,130,609(473,043)

657,566

489,101(198,084)

291,017

518,182(216,806)

301,376

Claims reported and loss
adjustment expenses
Claims incurred but notreported

Bonding
Claims reported and loss
adjustment expenses
Claims incurred but notreported

Non-current

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

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

18.1

Claims development tables

The claims development tables provide an overview of how Atradius’ recognised claims costs for underwriting years 20072016 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 eachunderwriting year as at 31 December 2016. Underwriting year here means the year in which the risks were accepted; forreinsurance business it is the treaty year.
Credit Insurance – Gross
Claims development per underwriting year – (EUR million)
Year when risk
was taken

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

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

787.9

1,438.9

749.0

515.2

739.7

809.6

682.1

753.0

829.6

755.7

one year later

1,050.7

1,992.9

644.8

500.3

694.4

764.0

586.0

734.6

780.7

two years later

1,069.4

2,116.2

620.6

451.2

670.4

704.9

554.6

734.9

three years later

1,081.1

2,122.5

592.0

437.4

663.5

696.3

543.8

four years later

1,084.9

2,136.2

578.7

438.9

649.7

684.3

five years later

1,094.0

2,126.1

577.0

432.1

642.9

six years later

1,090.5

2,120.0

569.5

425.7

seven years later

1,089.3

2,103.4

561.0

eight years later

1,080.4

2,084.5

nine years later
Current estimateof cumulative
claimsCumulative
payments to date
Claims provision at
31 December 2016
in respect of 2007
- 2016
In respect of prioryears (before
2007)

1,070.5

Total

1,070.5

2,084.5

561.0

425.7

642.9

684.3

543.8

734.9

780.7

755.7

8,284.0

1,067.8

2,082.7

565.4

431.4

643.7

679.9

539.5

675.0

624.1

194.8

7,504.3

2.7

1.8

(4.4)

(5.7)

(0.8)

4.4

4.3

59.9

156.6

560.9

779.7

15.8

Total

795.5

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 particular underwriting
year can increase in future financial years as both the premium and losses are recognised in the income statement. This isrelevant for the credit insurance business written by the local business in Spain and Portugal, the reinsurance business andinstalment credit protection. The premium earned for underwriting years 2013-2015 in the current financial year for theseblocks of business was EUR 131.6 million.
After one year, underwriting year 2015 is currently higher than previous years, due to one large case for which EUR 90
million was included in the claim costs for 2015. The loss recognised for this case did not materially change in 2016.
The claims development tables are presented on a gross basis. The effect of risk mitigation is in line with our quota sharetreaties 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 47%. Risk mitigation for gross claims incurred as

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

shown in this table varies between 42% 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 is covered by Excess of loss treaties.
Bonding - Gross
Claims development per underwriting year – (EUR million)
Year when risk was
taken
Estimate of grossclaims incurred:at the end of the year
when risk was taken

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

8.8

13.2

10.7

10.2

19.3

19.0

21.7

19.0

21.0

16.8

26.8

one year later

25.6

33.2

22.1

25.7

48.8

48.7

32.6

34.6

two years later

29.2

38.8

30.7

36.4

60.8

53.7

39.1

43.6

three years later

34.0

45.6

34.8

43.4

62.8

58.4

42.0

four years later

30.1

49.3

36.2

43.4

57.4

58.7

five years later

29.3

50.6

38.4

42.4

60.7

six years later

31.8

52.1

38.1

42.1

seven years later

41.1

53.8

37.6

eight years later

45.1

56.9

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

50.6

Claims provision at 31
December 2016 inrespect of 2007 - 2016
In respect of prior years(before 2007)

Total

50.6

56.9

37.6

42.1

60.7

58.7

42.0

43.6

26.8

16.8

435.8

32.0

43.9

26.6

29.2

43.7

35.7

16.1

9.7

3.4

1.0

241.3

18.6

13.0

11.0

12.9

17.0

23.0

25.9

33.9

23.4

15.8

194.5
71.6

Total

266.1

The claims costs do not include an estimate for future claim payments on cases where Atradius does not yet have adverse
information. This explains the increase in claims costs over time. For bonding, Atradius typically earns premium inproportion 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 forunderwriting years 2013-2015 in the current financial year was EUR 68,3 million.
The claims development tables are presented on a gross basis. The effect of risk mitigation is in line with our quota sharetreaties 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 32%. Risk mitigation for gross claims incurred asshown in this table varies between 16% for the more recent years to 58% for the years prior to 2007. This is due to a
relatively higher retention in recent years and due to a relatively high share of the inward reinsurance business in claim cost
recognised for these recent years.

69

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Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | 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
2016

Net

Gross

Reinsurance
asset
2015

Net

Balance at 1 January

908,070(423,685)

484,385

781,292(373,815)

407,477

Claims paid in the year
Increase/(decrease) in liabilities
arising from claims
Foreign exchange rate andother movements(731,227)

319,018(412,209)(577,433)

268,151(309,282)

615,580(272,482)

343,098

666,553(319,711)

346,842

3,031

435

3,466

37,658

1,690

39,348

Balance at 31 December

795,454(376,714)

418,740

908,070(423,685)

484,385

283,867(143,924)

139,943344,344(168,041)

176,303

511,587(232,790)

278,797563,726(255,644)

308,082

795,454(376,714)

418,740

908,070(423,685)

484,385

Balance at 1 January

252,697(99,661)

153,036

314,943(148,109)

166,834

Claims paid in the year
Increase/(decrease) in liabilities
arising from claims
Foreign exchange rate andother movements(33,660)

13,554(20,106)(74,298)

36,047(38,251)

45,713586

46,29916,081

10,823

26,904

1,329

(563)

766

(4,029)1,578(2,451)

Balance at 31 December

266,079(86,084)

179,995

252,697(99,661)

153,036

201,723(78,821)122,902

185,524(91,543)

93,98164,356(7,263)57,09367,173(8,118)59,055

Total

266,079(86,084)

179,995

252,697(99,661)

153,036

Claims provisions

1,061,533(462,798)

598,735

1,160,767(523,346)

637,421

Claims reported and loss
adjustment expenses
Claims incurred but notreported
Total
Bonding

Claims reported and loss
adjustment expenses
Claims incurred but notreported

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

18.2.2 Provision for unearned premium
Credit insurance

Gross

Reinsurance
asset
2016

Net

Gross

Reinsurance
asset
2015

Net

292,852(99,961)

192,891

286,044(82,597)

203,447(4,502)

3,473(1,029)

7,184

230

7,414

(2,509)(546)(3,055)(376)(17,594)(17,970)

285,841(97,034)

188,807292,852(99,961)

192,891

Balance at 1 January

195,172(66,542)

128,630

189,872(64,441)

125,431

Movement in the period
Foreign exchange rate and othermovements

11,885(4,479)7,406

10,011(3,065)

6,946

6,724

(1,409)5,315(4,711)964(3,747)

Balance at 31 December

213,781(72,430)

141,351

195,172(66,542)

128,630

Provision for unearned premium

499,622(169,464)

330,158

488,024(166,503)

321,521

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

19 Provisions
2016

Restructuring

Onerouscontracts

Litigation

Total

Balance at 1 January

4,927

-

1,661

6,588

Business combinations

250

-

78

328

Additional provisions

3,275

-

159

3,434

Unused amounts reversed(2,031)-(63)(2,094)

Utilised(2,065)-(128)(2,193)

(36)

-

-

(36)

Balance at 31 December

4,320

-

1,707

6,027

Current

4,320

-

-

4,320

-

-

1,707

1,707

Restructuring

Onerouscontracts

Litigation

Total

Balance at 1 January

2,564

18

1,699

4,281

Additional provisions

4,025

-

347

4,372

Unused amounts reversed

(853)

3

(121)

(971)

Utilised

(838)

(21)

(264)

(1,123)

29

-

-

29

4,927

-

1,661

6,588

774

-

-

774

4,153

-

1,661

5,814

Effect of movements in foreign exchange rates

Non-current

2015

Effect of movements in foreign exchange rates
Balance at 31 December
Current
Non-current

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Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | All amounts in thousands of Euro, unless otherwise statedRestructuring
In 2015 a provision of EUR 4.0 million was created due to an intragroup reorganisation that has brought together AtradiusCredit Insurance N.V. and Compañía Española de Seguros y Reaseguros de Crédito y Caución S.A.u., into one legal entity. Of
the 32 cases seven employees have left the organisation. Two cases are determined to take the severance package whilst
others have found alternative employment within Atradius or are under negotiation.
Employees that have alternative employment are still entitled to the severance package if they decide to leave theorganisation mid-2017. However the full EUR 4.0 million which was provided is unlikely to be utilised. Therefore EUR 2.0
million has been released end of 2016.
Litigation
The litigation provision is related to disputes with third parties that are not related to the insurance business of Atradius.
Insurance business related litigation provisions are included in the provisions for outstanding claims. The provision relates
to the estimated cost including the costs of legal proceedings of any non-insurance claims against Atradius. These
provisions have not been discounted to reflect present value since the effect of discounting is not material.

20 Deferred and current income tax
Current income tax

Current income tax assets

2016

2015

50,613

21,288Current income tax liabilities

23,96031,641

Net

26,653(10,353)

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
2016

2015

Deferred income tax assets before set-off

142,773

157,987

Set-off of deferred tax positions(97,458)(105,022)

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

45,31552,965

Deferred income tax liabilities before set-off

212,637

217,176

Set-off of deferred tax positions(97,458)(105,022)

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

115,179

112,154

2016

2015

Balance at 1 January(59,189)(31,171)

Business combination

1,220

-

Credit (charge) to other comprehensive income for the year

4,680

364

Charge to the income statement for the year

(17,018)(29,431)

The gross movement on the deferred income tax is presented in the following table:

Effect of movements in foreign exchange rates
Balance at 31 December

72

123

443

1,049

(69,864)(59,189)

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

The movement in the deferred tax assets and liabilities is presented in the following table:
2016
Balance at 1
Recognised in Recognised in
Effect ofJanuaryotherthe income movements
comprehensive statement forin foreign
income for thethe yearexchange
year

Business
combination

Balance at
31
DecemberTax losses carried forward

14,455-(2,982)

(150)

1,220

12,543

Technical balances

14,733-(5,094)

277

-

9,916

Pensions

19,502

7,925

(311)

1,817

-

28,933Fiscal goodwill

12,774-(2,746)(17)-

10,011

Financial investments(7,829)(3,245)

(22)

(4)

-

(11,100)

Equalisation provisions
Property, plant andequipment(100,648)-(8,939)--(109,587)(13,555)

-

(386)

(106)

-

(14,047)

Other

1,379

-

3,462

(1,374)

-

3,467

Total

(59,189)

4,680(17,018)

443

1,220

(69,864)2015

Balance at 1
January

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

Effect ofmovements
in foreignexchange

Business
combination

Balance at
31
DecemberTax losses carried forward

22,037-(7,463)(119)-

14,455

Technical balances

12,915

-

1,891

(73)

-

14,733Pensions

19,023(1,399)

1,628

250

-

19,502

Fiscal goodwill

21,213-(8,391)(48)-

12,774

Financial investments(10,348)

1,763

759

(3)

-

(7,829)Equalisation provisions
Property, plant andequipment(77,421)-(24,247)

1,020-(100,648)(12,917)

-

(652)

14

-

(13,555)

Other(5,673)

-

7,044

8

-

1,379

Total

(31,171)364(29,431)1,049-(59,189)

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 carriedforward, unused tax credits, and deductible temporary differences can be utilised. In 2016, EUR 1.3 million deferred tax
assets on the losses carried forward and deductible temporary difference were written down or not recognised (2015: EUR
2.5 million). This is offset by the reversals of the impairments, prior year adjustments and foreign exchange, resulting in a
net reversal of these deferred tax assets.
Atradius has unrecognised tax losses carried forward balances amounting to EUR 58.6 million (2015: EUR 50.7 million). The
expiration of these unrecognised tax losses carried forward is included in the following table:
Expiration unrecognised tax losses carried forward

2016

2015

1 - 3 years

102

624

4 - 9 years

11,3796,128

Indefinite

47,12843,946

Total
58,60950,698The increase of unrecognised tax losses is mainly due to the impairment of deferred tax assets on the losses carriedforward mentioned above.

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Atradius | All amounts in thousands of Euro, unless otherwise stated
Atradius | 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 thefollowing table:
Deferred tax

Current tax

Deferred tax

2016

Current tax

2015

Revaluation reserve in shareholders equity related to:
Available-for-sale financial investments(3,245)

501

1,763

(98)

7,925

-

(1,399)

-

1,044

-

(400)

1,545

364

(498)

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

-

Total

4,680

21 Payables
2016

2015

Accounts payable on insurance and reinsurance business

183,407

161,835

Payables arising out of reinsurance operations

106,441

80,320

Amounts due to policyholders

62,93067,719Amounts due to intermediaries and current account Dutch State

14,036

13,796

Trade and other accounts payable

49,33933,372

Accounts payable

34,13325,250

Other accounts payable

15,206

8,122

Total

232,746

195,207

2016

2015

Ceded pipeline premium and return premium

156,737

164,415

Deposits received from reinsurers

45,53547,005

Unearned reinsurance commission

57,191

57,418

Payroll and bonus accruals

42,15239,374

Reinsurance accruals

9,598

32,385

Other accruals

65,88452,723

IPT and stamp duties payable

5,239

6,364

Other taxes

11,075

12,289

Total

393,411

411,973

The payables are substantially all current.

22 Other liabilities

Other liabilities are substantially all current.

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

23 Net premium earned
Credit insurance

Gross

Reinsurers'
share
2016

Net

Gross

Reinsurers'
share
2015

Net

Written premium

1,383,867(607,949)

775,918

1,388,554(625,420)

763,134

Change in provision for unearned
premium

4,502(3,473)

1,029(7,184)(230)(7,414)

Other movements

3,939(2,080)

1,859

(793)

294

(499)

1,392,308(613,502)

778,806

1,380,577(625,356)

755,221

Written premium

177,240(54,843)

122,397

166,416(52,332)

114,084

Change in provision for unearned
premium(11,885)

4,479(7,406)(10,011)

3,065(6,946)

(75)

35

(40)

23

15

38

Total

165,280(50,329)

114,951

156,428(49,252)

107,176

Total premium earned

1,557,588(663,831)

893,757

1,537,005(674,608)

862,397

Total
Bonding

Other movements

24 Service and other income
2016

2015

Collections and recovery services

41,54339,982

Information services and fees

127,396

121,454

Other service income

34,14019,318203,079

180,754

Total

Information services income and fees are part of the insurance segment. Collections and recovery services and other service
income are part of the service segment.

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

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

2016

2015

13,866

14,0498

1015,572

23,738995

1,062

30,441

38,859424

798

30,86539,657

Debt securities available-for-sale(1,615)(469)

Equity securities available-for-sale(7,484)(902)

Handling expenses(3,385)(2,757)

Total expenses from financial investments(12,484)(4,128)

(102)

(295)

Total investment expenses(12,586)(4,423)

Net income from investments

18,27935,234

Share of income of associated companies

26,689782

Net income from investments including associated companies

44,96836,0162016

2015

Interest

12,89912,300

Dividends

9,762

7,034

Realised gains

7,810

19,894

Rental income from investment property

394

429

30,86539,657

Handling expenses(3,385)(2,757)

Realised losses(6,722)(301)

Impairment loss

(2,377)(1,204)

Depreciation of investment property

(102)

(161)

Total

(12,586)(4,423)

Net income from investments

18,27935,234

Share of income of associated companies

26,689782

Net income from investments including associated companies

44,96836,016

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

Investment property

Net investment income by nature of income/(expense)
Income

Total
Expenses

In interest income and expenses reported above, the component related to financial investments available-for-sale is net
EUR 11.9 million (2015: EUR 11.2 million); this is derived from government and corporate bonds.

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Atradius | Consolidated financial statements 2016 Atradius N.V.

Atradius | Consolidated financial statements 2016 Atradius N.V.

Net gains/(losses) by category

Impairments

Realised
gains/(losses)
2016

Investment property

Impairments

Realised
gains/(losses)
2015

-

30

(134)

370

Financial assets classified as available-for-sale(2,377)

1,058(1,070)19,223

Total(2,377)

1,088(1,204)

19,59326 Insurance claims
Credit insurance

Gross

Reinsurers'
share
2016

Net

Gross

Reinsurers'
share
2015

Net

Claims paid in the year

731,227(319,018)

412,209577,433(268,151)

309,282

Change in claims provisions(115,647)

46,536(69,111)

89,121(51,560)

37,561Claims handling expenses

35,326-35,32634,021-

34,021

650,906(272,482)

378,424700,575(319,711)

380,864

Claims paid in the year

33,660(13,554)

20,10674,298(36,047)

38,251

Change in claims provisions

12,05314,14026,193(58,217)46,870(11,347)

Total
Bonding

Claims handling expenses

1,773

-

1,773

1,866

-

1,866

Total

47,486586

48,072

17,947

10,823

28,770Total insurance claims

698,392(271,896)

426,496

718,522(308,888)

409,634

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

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

27 Net operating expenses
2016

2015

Total administrative expenses

478,441

467,924

Acquisition costs

202,008205,232

2,749(2,519)Gross operating expenses

683,198

670,637

Commissions received for business ceded to reinsurers(251,873)(262,763)

Total net operating expenses

431,325

407,874

2016

2015

Insurance and information expenses

451,819432,959

Recoveries and collections expenses

43,43942,829Other service expenses

13,296

12,518Group costs

6,986

15,505

Total gross administrative expenses

515,540

503,811Claims handling expenses allocated to insurance claims(37,099)(35,887)

Total administrative expenses

478,441

467,924

Change in deferred acquisition costs

Administrative expenses by type of businessAs part of the gross administrative expenses, depreciation, amortisation and impairment charges for intangible assets andproperty, plant and equipment amount to EUR 30.2 million (2015: EUR 26.5 million).

Employee benefit expenses
Salaries and wages (including social security costs)

2016

2015

292,076

279,526

Restructuring costs and termination benefits

1,244

3,172

Pension costs - defined contribution plans

10,406

9,880

Pension costs - defined benefit plans

12,201

20,557

Total employee benefit expenses

315,927

313,135

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

28 Finance expenses
2016

2015

15,894

13,333

Net interest on the net defined benefit liability

681

1,026

Other interest expense

4,211

2,875

Foreign exchange (income)/expense(8,042)

363

Total

12,744

17,597

Interest and fees on the subordinated debt

The subordinated debt costs include the periodic interest expenses of EUR 15.7 million (2015: EUR 13.1 million) and theaccretion of interest on the debt in the amount of EUR 0.2 million (2015: EUR 0.2 million).

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

29 Income tax
2016

2015

Current tax

45,77440,518Deferred tax

17,01829,431

Income tax expense/(income) for the year

62,792

69,949The reconciliation from the expected tax rate to the actual tax rate is provided in the following table:
2016

2015

Result before tax

274,564

248,170

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

74,291

69,188Tax exempt (income)/loss(7,494)(2,036)

Write down/(reversal) of deferred tax assets

(206)

745

Reassessment of prior year local tax positions(416)(1,821)(1,464)611

Impact of change in tax rate
Other

(1,919)3,262

Income tax expense/(income) for the year

62,792

69,949The weighted average applicable tax rate was 27.1% (2015: 27.8%).
Deferred tax assets relating to losses carried forward in certain entities have been impaired or reversed. This is included in‘write down (reversal) of deferred tax assets’.
The impact of the change in tax rate in 2016 mainly reflects the effect of changes in income tax rate in Italy and UK.

30 Dividends per share
The dividends paid in 2016 and 2015 were EUR 71.2 million (EUR 0.90 per share) and EUR 64.9 million (EUR 0.82 per share)respectively.

31 Assets not freely disposable
The financial assets not freely disposable in 2016 are EUR 307.5 million (2015: EUR 311.6 million). Assets that are not freely
disposable consist of financial investments, properties and cash that have been held mainly for local regulatory purposesand can be used to cover technical provisions. The amount of pledged assets not covering technical provisions is EUR 84.6
million (2015: EUR 76.4 million).

32 Capital commitments and contingencies
Capital commitments of EUR 21.1 million (2015: EUR 16.4 million) are related to contracted obligations for future paymentsfor 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 thatany material liabilities will arise from the contingent liabilities. The Group has given guarantees to third parties amounting to
EUR 2.0 million (2015: EUR 2.0 million).

33 Operating leases
Non-cancellable operating lease commitments are included in the following table:

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

2016

2015

Less than one year

21,03122,094

Between one and five years

59,36569,508More than five years

21,491

27,223

101,887

118,825

Total

Atradius leases office equipment and office space under a number of operating lease agreements. The lease contracts haveremaining terms of between 1 and 20 years. The leasing of office space represents around 92% (2015: 93%) of the total
future payments regarding operating leases.
During the year an amount of EUR 22.5 million (2015: EUR 24.1 million) has been recognised as expense.

34 Business combinations
Atradius completed two acquisitions in 2016. On 15 September 2016 Atradius acquired the remaining 55% of theoutstanding shares of Graydon for a total cash consideration of EUR 19.5 million. The share in the overall cash position of
Graydon on the transaction date was EUR 13.9 million, resulting in a net cash outflow of EUR 5.6 million. The net asset valueof the 45% equity interest held in Graydon by Atradius at the acquisition date amounts to EUR 3.4 million. The positive net
result on re-measuring to fair value this 45% equity interest amounts to EUR 19.9 million and is recognised in the line item
‘Share of income of associated companies’ in the consolidated income statement. Graydon is treated as a consolidated
company thereafter.
Graydon is a leading business information services provider in the Netherlands, Belgium and the UK with business
operations in credit management, risk and compliance, marketing information and debt collection. Atradius and Graydon
have similar strategies when it comes to collecting significant amounts of data and converting it into valuable informationthat can help our customers grow their businesses. The acquisition of Graydon is expected to create synergies that improvethe credit management and collections offerings and strengthen the underwriting capabilities of Atradius. An independentvaluator has determined the fair value of Graydon as per the acquisition date. The fair value relating to the 45% sharealready held by Atradius is determined based on this independent valuation.

80

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Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

The details of net assets acquired and goodwill are as follows:

EUR
Consideration paid (relating to 55% share)

19,500Fair value of interest held (relating to 45%share)

25,650Total fair value

45,150Less:
Fair value of identifiable net assets

14,219Goodwill

30,931

The total amount of goodwill that is expected to be deductible for tax purposes is EUR 0. The amounts recognised as of theacquisition date for each major class of assets acquired and liabilities assumed are as follows:

Amounts
recognised

Intangible assets

13,174

Property, plant and equipment

565

Deferred and current income tax assets

1,314

Receivables

8,571

Other assets

3,807

Cash and cash equivalents

14,357

Total assets

41,788Provisions

328

Deferred and current income tax liabilities

1,861

Payables and other liabilities

25,380Total liabilities

27,569Net assets

14,219Net assets acquired (remaining 55% share)

7,820

The fair value of the receivables is not materially different to their fair value. The best estimate at the acquisition date of thecontractual cash flows not expected to be collected is EUR 0.
The revenue and total operating result of Graydon since the acquisition date included in the consolidated statement ofcomprehensive income for the reporting period amount to EUR 13.3 million for revenue and EUR (-191) thousand for the
result since the acquisition date and EUR 38.2 million for revenue and EUR 87 thousand for the result over the year for thebusiness combination between Atradius and Graydon for 2016 as though the acquisition date had been as of the beginningof the annual reporting period.
The acquisition on 29 September 2016 of 80% in IGNIOS - Gestão Integrada de Risco S.A. (Ignios), Portugal and its
subsidiary Gestifatura Unipessoal, Ltda (Gestifatura) involved an aggregated net cash outflow of EUR 1.8 million. Ignios
offers commercial and financial information in Portugal. The net asset value is approximately EUR 0.2 million.
Transaction-related costs that were recognised in Net operating expenses amounted to EUR 92 thousand. Graydon, Ignios
and Gestifatura are reported as part of the Services segment.

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132

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

35 Personnel
The number of employees working for Atradius is included in the following table:
2016

2015

Total average number of employees (full-time equivalent)

3,562

3,153

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

3,564

Total year end number of employees (headcount)

3,736

1)

Including FTE from Graydon, Ignios and Gestifatura.

82

133

3,161
1)

3,333

Atradius | Consolidated financial statements 2016 Atradius N.V.
Atradius | Consolidated financial statements 2016 Atradius N.V.

36 Related party transactions
The following table provides the total value of transactions that have been entered into with related parties in the financial
year:
Associatedcompanies

Parent (1)2016

Associatedcompanies

Parent (1)2015

Sales to related parties

7,801

1,110

12,34736

Purchases from related parties

1,283

9,528

2,903

1,650

Amounts owed by related parties

844

28,796847

8,838

Amounts owed to related parties

860

531

634

-

(1)

Subsidiaries of Grupo Catalana Occidente, S.A.

Reinsurance includes transactions with associated companies.
Sales to related parties consist of the net effect of Reinsurance business (premiums, claims, recoveries and commission) andfor information services provided to Atradius. Purchases from related parties consist of the net effect of (retro-) ceded
insurance (premiums, claims, recoveries and commission). The amounts owed by related Atradius companies consist of thefair 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 2016 or 2015. For the years ending 31
December 2016 and 2015, Atradius has not raised any provision or expenses for doubtful debtors relating to amounts owed
by related parties.
Sale of investment in associated company
In 2015, Atradius Participation Holdings B.V. sold its shares in Inversiones Credere S.A, to Grupo Catalana Occidente at a saleprice of EUR 2.3 million.
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 53.3 million (21.3%) of the guaranteed subordinated notes. In 2016 the interest expense relating to thisportion was EUR 2.4 million (2015: EUR 2.1 million).
In 2016 the shareholders of Atradius N.V. provided a subordinated loan to Atradius Re with a principle amount of EUR 75
million.

83

134

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

The related party share(1) for the subordinated debt is as follows:
Lenders

Nominalvalue

Interest
expenseNominal
value

2016

Interest
expense2015

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

40,0002,104

40,0002,100

Seguros Catalana Occidente S.A. de Seguros y
Reaseguros

34,291

1,028

-

-

Bilbao Compañía Anónima de Seguros y
Reaseguros

42,000

1,428

-

-

Nortehispana, de Seguros y Reaseguros S.A.

6,000

210

-

-

122,291

4,770

40,000

2,100

Total
(1)

Subsidiaries of Grupo Catalana Occidente, S.A.

In 2016 the interest expense relating to this subordinate loan was EUR 4.8 million.
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.
Remuneration

2016

2015

Short-term employee benefits (1)

2,814

2,824

Long-term employee benefits

464

426

Post-employment benefits

352

389

3,630

3,639

5

5

Short-term employee benefits (1)

510

450

Total compensation paid to Supervisory Board members

510

450

9

8

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 payable to Management Board members, EUR 3.2 million (2015: EUR 3.2 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 subsidiaries. Apart fromthis they do not have other relationships with the Company or its subsidiaries.

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

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Atradius | Company financial statements 2016 Atradius N.V.

Company financial statements 2016
Contents
137
Company financial statements ....................................................................................................................................... 128
Notes to the company financial statements
1 General information ......................................................................................................................................................139
131
2 Summary of significant accounting policies ..........................................................................................................139
131
3 Investments in group companies ............................................................................................................................. 140
132
4 Capital and reserves .................................................................................................................................................... 140
132
5 Provision for deferred tax liabilities ........................................................................................................................133
141
6 Other liabilities ..............................................................................................................................................................142
133
7 Contingencies ................................................................................................................................................................ 142
134
8 Personnel........................................................................................................................................................................ 142
134
9 Auditor fees .................................................................................................................................................................... 134
143
10 Remuneration of Management Board and Supervisory Board .........................................................................143
135

85

136

Atradius | All amounts in thousands of Euro, unless otherwise statedCompany financial statements
Company statement of financial position (before profit appropriation)
AssetsNote

Fixed assets
Property, plant and equipment
3

Investments in group companies
Current assets
Receivables from group companies
Deferred income tax assets
Cash and cash equivalents

31.12.2016

31.12.2015

1,627,757

1,497,451

24

43

1,627,733

1,497,408

3,380

9,782

511

3,432

1,560

-

1,309

6,350

1,631,137

1,507,233

79,122

79,122

Share premium reserve862,883

862,883

Legal reserve(96,864)(84,426)

Retained earnings

568,534

464,449

Result for the year (unappropriated)

211,795

178,221

1,625,470

1,500,249

-

141

5,667

6,843

5

36

Total
EquityCapital and reserves attributable to the owners of the Company

4

Share capital

Total
Liabilities
Provision for deferred tax liabilities

5

Current liabilities
Payables to group companies
6

Other liabilities

4,083

4,229

Current income tax liabilities

1,579

2,578

Total

5,667

6,984

1,631,137

1,507,233

Total equity and liabilities

Company income statement
Income after tax from group companies

2016

2015

219,899

183,904

Other results after tax(8,104)(5,683)Result for the year

211,795

178,221

86

137

Atradius | Company financial statements 2016 Atradius N.V.

Company statement of changes in equity

Balance at 1 January 2015
Adjustment regulatory reserves
Restated balance at 1 January 2015

SharecapitalSharepremium
reserve

Legal reserve

Retainedearnings

Result for
the year

Total

79,122

716,267

490,830(54,370)

161,190

1,393,039-

216,263(573,892)

357,629--

79,122

932,530(83,062)

303,259

161,190

1,393,039--(9,513)--(9,513)

Change in revaluation reserve andpension reserve group companies
Change in currency translation
reserve
Net income recognised directly inequity

-

-

3,382

-

-

3,382

-

-

(6,131)--(6,131)

Appropriation of prior year result

-

-

-

161,190(161,190)-

Result for the year

-

-

-

-

178,221

178,221

Change in reserve intangible assets-(4,767)

4,767

-

-

-

Dividends
Balance at 31 December 2015

79,122(64,880)862,883(84,426)

464,449

178,221(64,880)
1,500,249

Balance at 1 January 2016

79,122862,883(84,426)

464,449

178,2211,500,249--(14,539)--(14,539)

-

-

(825)

-

-

(825)

-

-

(15,364)--

Appropriation of prior year result

-

-

-

178,221(178,221)-

Result for the year

-

-

-

-

211,795

211,795

Change in reserve intangible assets

-

-

2,926

(2,926)--

79,122862,883(96,864)(71,210)568,534

211,795(71,210)
1,625,470

Change in revaluation reserve andpension reserve group companies
Change in currency translation
reserve
Net income recognised directly inequityDividends
Balance at 31 December 2016

87

138

(15,364)Atradius | 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).
The Company financial statements are part of the 2016 consolidated financial statements, which are also included in theannual report. The Company income statement is presented in abbreviated form in accordance with Article 402 of Book 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 inthis 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 2 March 2017.

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 of Book 2 of the
Dutch Civil Code have been applied. The valuation principles for assets and liabilities and the method of determining theresult are identical to those applied in the consolidated financial statements. Reference is made to the notes thereto.
All amounts in the notes are shown in thousands of Euro (EUR), rounded to the nearest thousand, unless otherwise stated.
Consistent with market practices, the Company decided to make a clear distinction between the capital requirements thatare required for regulatory purposes and the equity position according to IFRS as the two approaches have different
objectives and definitions. In addition, the Solvency I framework is no longer applicable in 2016.
The parts within the legal reserve that related to ‘regulatory capital requirements for Solvency I’ and the related‘equalisation reserve’ have been released against the reserves to which they were originally allocated. The retrospective
impact of this change is reflected in the adjusted Company financial statements as per 1 January 2015, and has no impact
on the total equity, nor on the result for the year. For details on these adjustments, refer to the ‘Company statement ofchanges in equity’ and Note 4 ‘Capital and reserves’.

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:
Revaluation reserve;
Pension reserve;
Currency translation reserve;
Reserve intangible assets.

88

139

Atradius | Company financial statements 2016 Atradius N.V.

3

Investments in Group companies

The following table shows the changes in investments in group companies valued using the equity method:
2016

2015

Balance at 1 January

1,497,408

1,394,015

Share of profit/(loss)

219,899

183,904

Dividends received(74,210)(74,380)

Change in revaluation reserve and pension reserve(14,539)(9,513)

(825)

3,382

1,627,733

1,497,408

Foreign exchange reserve movements
Balance at 31 December

4

Capital and reserves

4.1

Share capital

The authorised share capital of Atradius N.V. amounts to EUR 250,000,000 and is divided into 250,000,000 ordinary
shares with a nominal value of EUR 1 each (2015: the same) of which 79,122,142 ordinary shares were issued and full paid
(2015: the same). The fully paid ordinary shares carry one vote per share and carry the right to dividends.

4.2

Share premium reserve

Balance at 1 January
Adjustment regulatory reserves

2016

2015

862,883

716,267-

216,263862,883

932,530

Transfer between legal reserve and share premium reserve-(4,767)

Dividends-(64,880)862,883

862,883

2016

2015

(84,426)

490,830-(573,892)

Restated balance(84,426)(83,062)

Change in revaluation reserve and pension reserve group companies(14,539)(9,513)

Change in currency translation reserve

(825)

3,382

Change in reserve intangible assets

2,926

4,767

(96,864)(84,426)

Restated balance

Balance at 31 December

4.3

Legal reserve

Balance at 1 January
Adjustment regulatory reserves

Balance at 31 December

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:-changes 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 and effect of asset ceilings within consolidated group companies presented in the pension

89

140

Atradius | All amounts in thousands of Euro, unless otherwise stated-reserve in the consolidated financial statements, are presented together in the legal reserve in the company
financial statements;
foreign currency translations on consolidated group companies, presented in the currency translation reservein the consolidated financial statements, are presented in the legal reserve in the company financial
statements.

In addition to the legal and regulatory restrictions on distributing dividends from subsidiaries to Atradius N.V., there arevarious other considerations and limitations that are taken into account in determining the appropriate levels of equity 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 a reliable quantification of theselimitations. Reference is made to paragraph 4.5 Capital Management in the consolidated annual report.
The following table shows the split of the legal reserve at the end of the reporting period:
2016

2015

Revaluation reserve and pension reserve group companies(115,556)(58,664)

Currency translation reserve(14,349)(55,877)

Reserve intangible assets

33,041

30,115

Total(96,864)(84,426)

2016

2015

464,449(54,370)-

357,629

Restated balance

464,449

303,259

Appropriation of prior year result

178,221161,190

Transfer between legal reserve and retained earnings(2,926)-

Dividends(71,210)-

Balance at 31 December

568,534

464,449

2016

2015

Balance at 1 January

141

1,226

Utilised(141)(1,085)

-

141

2016

2015

Other taxes

401

417

Long-term employee benefits

652

405

4.4

Retained earnings

Balance at 1 January
Adjustment regulatory reserves

5

Provision for deferred tax liabilities

Balance at 31 December

6

Other liabilities

Other liabilities

3,030

3,407

Total

4,083

4,229

90

141

Atradius | Company financial statements 2016 Atradius N.V.

7

Contingencies

The Company has contingent liabilities in respect of guarantees arising in the ordinary course of business. It is not
anticipated that any material liabilities will arise from the contingent liabilities. The Company has given guarantees to third
parties in the ordinary course of business amounting to EUR 0.5 million (2015: EUR 0.5 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
Participations Holding B.V., Atradius Information Services B.V., Atradius Collections Holding B.V. and Atradius Collections
B.V. All companies included in the fiscal unity are jointly and severally liable for the corporate income tax payable by thefiscal unity.
The Company is subject to litigation in the normal course of business. The Company believes that such litigation will nothave 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, (2015: EUR 250 million) issued
by Atradius Finance B.V. (see Note 16 of the consolidated financial statements).

8

Personnel

The number of employees (full-time equivalents) working for the Company:
2016

2015

Total average number of employees (full-time equivalent)

6

6

Total year end number of employees

6

6

91

142

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

9 Auditor fees
The following expenses were made for audit and non-audit services rendered by Atradius’ external auditor:
2016

Deloitte
Accountants
B.V.

Other Deloitte
Networkorganisations

Total Deloitte
Network

Audit financial statements

842

1,791

2,633

Other audit services

326

468

794

-

-

-

Fiscal advisory services
Non-audit services

-

-

-

Total

1,168

2,259

3,427

2015

Deloitte
Accountants
B.V.

Other Deloitte
Networkorganisations

Total Deloitte
Network

1,035

1,332

2,367

257

162

419

Fiscal advisory services

-

-

-

Non-audit services

-

-

-

1,292

1,494

2,786

Audit financial statements
Other audit services

Total

These amounts relate to the actual expenses incurred for the audit of the related financial year, and other services, on an
accrual basis.

10 Remuneration of Management Board and Supervisory Board
For information on remuneration of the members of the Management Board and the Supervisory Board: see Note 36 of theconsolidated financial statements.

11 Proposed profit appropriation
11.1

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 Meeting.

11.2

Proposed appropriation of result

The Management Board proposes to the General Meeting to allocate the result for the year to the retained earnings and to
make a distribution of EUR 76.7 million out of the retained earnings.

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

92

143

Atradius | Company financial statements 2016 Atradius N.V.

Other information

144

Atradius | Annual report 2016 Atradius N.V.

Annual Report Atradius N.V.
Amsterdam, 2 March 2017
The Supervisory Board

The Management Board

Ignacio Álvarez (Chairman)
Francisco Arregui (Vice-Chairman)
Bernd Meyer
Dick Sluimers
Xavier Freixes
Hugo Serra
Désirée van Gorp
John Hourican
Carlos Halpern
José Maria Sunyer

Isidoro Unda (Chairman)
Andreas Tesch
Christian van Lint
Claus Gramlich-Eicher
Marc Henstridge

94

145

Atradius | Independent auditors report

Independent auditor’s report
To the shareholders and the Supervisory Board of Atradius N.V.

REPORT ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 INCLUDED IN
THE ANNUAL ACCOUNTS
Our opinion
We have audited the financial statements for the year ended December 31, 2016 of Atradius N.V. based in Amsterdam. The
financial statements include the consolidated financial statements and the company financial statements.
In our opinion:• T he consolidated financial statements included in these annual accounts give a true and fair view of the financial positionof Atradius N.V. as at December 31, 2016, and of its result and its cash flows for the year ended December 31, 2016 inaccordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9of Book 2 of the Dutch Civil Code.
 he company financial statements included in these annual accounts give a true and fair view of the financial position of• T
Atradius N.V. as at December 31, 2016, and of its result for the year ended December 31, 2016 in accordance with Part 9 ofBook 2 of the Dutch Civil Code.
The consolidated financial statements comprise:
1. The consolidated statement of financial position as at December 31, 2016.
2. The	following statements for 2016: the consolidated income statement, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash flows.
notes comprising a summary of the significant accounting policies and other explanatory information.
3. The	
The company financial statements comprise:
1. The company balance sheet as at December 31, 2016.
2. The company income statement for the year ended December 31, 2016.
3. The notes comprising a summary of the accounting policies and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing.
Our responsibilities under those standards are further described in the “Our responsibilities for the audit of the financial
statements” section of our report.
We are independent of Atradius N.V. in accordance with the Verordening inzake de onafhankelijkheid van accountants bij
assurance-opdrachten - ViO and other relevant independence regulations in the Netherlands. Furthermore we have compliedwith the (Verordening gedrags- en beroepsregels
accountants - VGBA.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
REPORT ON THE OTHER INFORMATION INCLUDED IN THE ANNUAL ACCOUNTSIn addition to the financial statements and our auditor’s report, the annual accounts contain other information that consists of:• Management Board’s report• Other information as required by Part 9 of Book 2 of the Dutch Civil Code
Based on the following procedures performed, we conclude that the other information:• Is consistent with the financial statements and does not contain material misstatements.
• Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.

146

Atradius | Company financial statements 2016 Atradius N.V.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial
statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of
those performed in our audit of the financial statements.
Management is responsible for the preparation of other information, including the Management Board’s report in accordancewith Part 9 of Book 2 of the Dutch Civil Code, and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.

DESCRIPTION OF RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS
Responsibilities of management and the Supervisory Board for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with EUIFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as
management 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, management is responsible for assessing the company’s ability
to continue as a going concern. Based on the financial reporting framework mentioned, management should prepare
the financial statements using the going concern basis of accounting unless management either intends to liquidate thecompany or to cease operations, or has no realistic alternative but to do so.
Management should disclose events and circumstances that may cast significant doubt on the company’s ability to continue
as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate
audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected allmaterial errors and fraud.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified
misstatements on our opinion.
We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordancewith Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.:• I dentifying 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, and obtaining audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
 btaining an understanding of internal control relevant to the audit in order to design audit procedures that are• O
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control.
• E valuating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• C oncluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the company’s ability to continue 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 such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

147

Atradius | Company financial statements 2016 Atradius N.V.

• Evaluating the overall presentation, structure and content of the financial statements, including the disclosures.
• E valuating whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing thegroup audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group
entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group
entities for which an audit or review had to be carried out on the complete set of financial information or specific items.
We communicate with management regarding, among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant findings in internal control that we identify during our audit.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bearon our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the key audit matters. We describe thesematters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremelyrare circumstances, not communicating the matter is in the public interest.
Amsterdam, March 2, 2017
Deloitte Accountants B.V.
R.J.M. Maarschalk148

Atradius | Glossary

Glossary
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 insurance.

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 / 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.

149

Atradius | Glossary

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

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

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

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

Atradius Insights
An advanced online business intelligence tool to support our customers with a detailed analysis of their debtor
portfolio and can 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 shortand medium-term risks involved in multiple instalment agreements with private individuals and businesses(business-to-consumer).

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

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

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

Policy underwriting
The activity related to establishing the terms and conditions of the insurance policy designed to mitigate 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.

150

Atradius | Glossary

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

SME
Small and medium-sized enterprises.

Solvency II
An EU Directive that codifies the EU insurance regulation. 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 andstrategies with ten universally accepted principles in the areas of human rights, labour, environment andanti-corruption.

151

Overview of subsidiaries,
Overview
Overview
Overview
Overview
ofofcompaniesofsubsidiaries,ofsubsidiaries,
subsidiaries,
subsidiaries,
associatedandassociatedassociatedassociatedassociatedcompanies
companies
companies
companies
and
and
and
and
minorityshareholdings
minorityminorityminorityminorityshareholdings
shareholdings
shareholdings
shareholdings

The following table sets forth, as at 31 December 2016, the name and jurisdiction of establishment of the subsidiaries,

The following
The
Thefollowing
following
ThetableThefollowing
table
followingsets
tableforth,
sets
sets
table
forth,
table
forth,
assets
atsetsas31
forth,
asat
Decemberatforth,
31
31
asDecember
December
atas31at2016,
December
31 December
2016,
2016,
the name
the2016,
thename
2016,
name
and
thejurisdiction
and
the
name
andnamejurisdiction
jurisdiction
andandjurisdictionof establishment
jurisdictionofofestablishment
establishmentof establishment
ofof
establishment
theofof
subsidiaries,
thethesubsidiaries,ofsubsidiaries,
theof thesubsidiaries,
subsidiaries,
branches, associated companies and minority shareholdings of Atradius N.V. All companies are, directly or indirectly,
branches,branches,branches,
associatedbranches,
associatedbranches,
associatedcompanies
associatedassociatedcompanies
companies
andcompanies
companies
minority
andandminority
minority
andshareholdings
andminorityshareholdings
shareholdings
minorityshareholdings
ofshareholdings
AtradiusofofAtradius
Atradius
ofN.V.
Atradius
of
All
N.V.
N.V.
Atradius
companies
All
All
N.V.
companies
companies
N.V.
All are,companies
All companies
directly
are,
are,directly
directlyare,or indirectly,are,directlyorordirectly
indirectly,
indirectly,
orwhollyindirectly,
or indirectly,
whollywhollywholly
whollywhollyowned
unlessotherwise
indicated.
The
companies
arelistedin alphabeticalorder.
owned
owned
owned
unlessowned
unlessunlessotherwise
owned
unlessotherwiseotherwise
unlessindicated.
otherwiseotherwise
indicated.
indicated.
The
indicated.
companies
The
indicated.
Thecompanies
companies
TheThearecompanies
listedcompanies
arearelisted
listedinarealphabeticalin
listedareinalphabeticalalphabeticallistedin alphabeticalorder.
in alphabeticalorder.
order.order.
order.
Name
Name Name
Name

Country
Ownership
Name
OwnersOwnersOwnersCountry Country
CountryOwners
CountryCountry
Name Owners
Name
Name
Name Name
hip
hip
hip
hip
hip
Kenya Kenya
Kenya 1Kenya
shareKenya
1 1shareshare Atradius
1Finance
share1 share
African Trade
AfricanAfricanInsurance
Trade
Trade
AfricanInsurance
Insurance
AgencyAfricanTrade Agency
Trade
Insurance
AgencyInsurance
AgencyAgencyAtradius
Atradius
Finance
B.V.
Finance
Atradius
Atradius
B.V.
B.V.
FinanceFinance
B.V. B.V.
UAE
UAE
49%UAEAtradius
49%
49% Atradius
49% Information
49%
Al Mulla Al
Atradius
AlMulla
MullaAtradiusInsurance
Atradius
Al Mulla
Al
Insurance
Insurance
Atradius
Mulla
Consultancy
Atradius
Consultancy
Insurance
Consultancy& Insurance
Brokerage
Consultancy&&Brokerage
Brokerage
Consultancy(L.L.C.)& Brokerage(L.L.C.)(L.L.C.)&UAE
Brokerage(L.L.C.)(L.L.C.)UAE
Information
Atradius
Information
Atradius
Services
Atradius
Information
Services
B.V.
Services
Information
B.V.
B.V.
Services
Services
B.V. B.V.
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
B.V. AtradiusCollections
B.V.
B.V. Collections
B.V. B.V.
BelgiumBelgium
branchBelgiumbranchbranchBelgium
Belgiumbranchbranch
BelgiumBelgium
branchBelgiumbranchbranchBelgium
Belgiumbranchbranch
BelgiumBelgium
Belgium Belgium
Belgium
DenmarkDenmark
Denmarkbranch branch
DenmarkbranchDenmarkbranchbranch
Name NameCountry
Ownership
Ownershi
OwnershiOwnershi
OwnershiCountry Country
CountryOwnershi
CountryCountrypppppNetherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
BelgiumBelgium
Belgium Belgium
Belgium
DenmarkDenmark
DenmarkDenmark
Denmark

Canada branch
CanadaCanadabranchbranchCanadaCanadabranchbranch

Canada Canada
Canada Canada
CanadaFrance branchFranceFrancebranchbranchFranceFrance
branchbranchFrance France
FranceCzech Republic
Czech
CzechRepublicbranchRepublic
Czechbranch
Czech
branchRepublic
Republic
branchbranch

Czech Republic
Czech
CzechRepublic
Republic
Czech Czech
Republic
Republic
GermanyGermany
branchGermanybranch
GermanybranchGermanybranchbranch

GermanyGermany
Germany Germany
Germany

DenmarkDenmark
Denmarkbranch branch
DenmarkbranchDenmarkbranchbranch

DenmarkDenmark
DenmarkDenmark
Denmark
Ireland branch
Ireland
IrelandbranchbranchIrelandIrelandbranchbranch

Ireland Ireland
Ireland

IrelandIreland

France branchFranceFrancebranchbranchFranceFrance
branchbranchFrance France
FranceFranceFrance Italy branch
Italy
ItalybranchbranchItaly branch
Italy branch

Italy

Italy
Italy

Italy Italy

GermanyGermany
branchGermanybranch
GermanybranchGermanybranchbranch

GermanyGermany
Germany Germany
Germany
Japan branch
Japan
JapanbranchbranchJapan Japan
branchbranch

Japan

Japan
Japan

Japan Japan

HungaryHungary
branchHungarybranchbranchHungary
Hungary
branchbranch

HungaryHungary
Hungary Hungary
Hungary
Norway Norway
branchNorwaybranchbranchNorwayNorwaybranchbranch

Norway Norway
Norway Norway
NorwayIreland branch
Ireland
IrelandbranchbranchIrelandIrelandbranchbranch

Ireland Ireland
Ireland

IrelandIrelandSpain branch
Spain
SpainbranchbranchSpain branch
Spain branch

Spain

Italy branch
Italy
ItalybranchbranchItaly branch
Italy branch

Italy

Italy Italy

Sweden Sweden
Sweden Sweden
SwedenPoland branch
PolandPolandbranchbranchPolandPoland
branchbranch

Poland Poland
Poland

Italy
Italy

Sweden Sweden
branchSwedenbranchbranchSwedenSwedenbranchbranch

PolandPolandSwitzerland
Switzerland
Switzerland
branchSwitzerland
branchbranch
Switzerland
branchbranch

Spain
Spain

FranceFrance

Spain Spain

Switzerland
Switzerland
Switzerland
Switzerland
Switzerland

AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
Holding
Atradius
Collections
Holding
B.V.
Holding
Collections
B.V.
B.V.
Holding
Holding
B.V. B.V.

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
ThailandThailand
branchThailandbranchbranchThailandThailandbranchbranch

ThailandThailand
Thailand Thailand
Thailand

AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
LimitedAtradius
Collections
LimitedLimitedCollections
LimitedLimitedCanada Canada
Canada Canada
CanadaUnited Kingdom
UnitedUnitedKingdom
branchKingdom
Unitedbranch
UnitedKingdombranchKingdom
branchbranch

United United
UnitedUnitedUnited

AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
LimitedAtradius
Collections
LimitedLimitedCollections
LimitedLimited

Kingdom
Kingdom
Kingdom India
Kingdom
KingdomHong Kong
Hong
HongKong
Kong
Hong Kong
Hong
Kong Atradius
India
India
India
Atradius
India
Atradius
CreditIndia
India
Atradius
Management
CreditCreditAtradius
India
Management
Management
CreditIndia
Services
CreditManagement
Services
PrivateServicesManagement
Ltd.
PrivatePrivateServices
Ltd.
Services
Ltd.
PrivatePrivate
Ltd.
Ltd.India

AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
LimitedAtradius
Collections
LimitedLimitedCollections
LimitedLimitedUnited Kingdom
UnitedUnitedKingdom
Kingdom
UnitedUnited
Kingdom
Kingdom
Atradius
Atradius
Insurance
AtradiusInsurance
Insurance
Atradius
Holding
Atradius
Holding
N.V.
Insurance
Holding
Insurance
N.V.
N.V.
Holding
Holding
N.V. N.V.
KingdomSingapore
Kingdom
Kingdom Singapore
Kingdom
Kingdom
Singapore
Singapore
Singapore
AtradiusAtradius
Investments
AtradiusInvestments
Investments
Atradius
LimitedAtradius
Investments
LimitedLimitedInvestments
LimitedLimitedNetherlands
Netherlands
Netherlands
Netherlands
Netherlands

AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
Pte. Limited
Atradius
Collections
Pte.
Pte.Limited
Collections
LimitedPte. Limited
Pte. Limited

Ireland Ireland
Ireland

IrelandIreland

AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
Pty. Limited
Atradius
Collections
Pty.
Pty.Limited
Collections
LimitedPty. Limited
Pty. Limited

AustraliaAustralia
Australia Australia
Australia
AtradiusAtradius
ItaliaAtradiusIntermediazioni
Italia
ItaliaAtradiusIntermediazioni
Intermediazioni
Atradius
ItaliaS.R.L.
Intermediazioni
ItaliaS.R.L.
Intermediazioni
S.R.L.
S.R.L. S.R.L.

Italy

Italy Italy

BrazilBrazilBrazilAtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
Serviços
Atradius
Collections
Serviços
deServiços
CobrançasCollections
dedeServiços
Cobranças
Cobranças
deServiços
Dívidasde Cobranças
dede
Ltda
de
DívidasDívidasCobranças
de
Ltda
Ltda
Dívidasde Dívidas
Ltda
Ltda Brazil Brazil
AtradiusAtradius
Participations
AtradiusParticipations
Participations
Atradius
Holding
Atradius
Participations
Holding
B.V.
Holding
Participations
B.V.
B.V.
Holding
Holding
B.V. B.V.
Mexico Mexico
Mexico MexicoMexico
AtradiusAtradiusCollections,
AtradiusCollections,Collections,
Atradius
S.A. Atradiusde Collections,
C.V.
S.A.
S.A.deCollections,deC.V.
C.V.
S.A. deS.A.
C.V.de C.V.
AtradiusAtradius
Pension
AtradiusPension
Trustees
Pension
Atradius
Atradius
Trustees
Ltd.
Trustees
PensionPensionLtd.
Ltd.
Trustees
Trustees
Ltd. Ltd.
AtradiusAtradiusCollections
AtradiusCollections
Collections
Atradius
S.L. AtradiusCollections
S.L.
S.L. Collections
S.L. S.L.

Spain

Spain
Spain

USA

USA
USA

Spain Spain
AtradiusAtradius
Reinsurance
AtradiusReinsurance
Reinsurance
Atradius
DACAtradius
Reinsurance
DAC
DAC
Reinsurance
DAC DAC

Italy
Italy

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
United United
United UnitedUnited
KingdomIreland
Kingdom
Kingdom Ireland
Kingdom
Kingdom
Ireland
Ireland
Ireland

USA USAAtradiusAtradius
Russia Russia
Russia RussiaRussia
AtradiusAtradiusCollections,
AtradiusCollections,Collections,
Atradius
Inc. AtradiusCollections,
Inc.
Inc.Collections,
Inc. Inc.
Rus
Atradius
CreditRus
Rus
Atradius
Insurance
CreditCreditAtradius
Rus
Insurance
Insurance
LLC
CreditRus Credit
LLC
Insurance
LLC Insurance
LLC LLC
China
China
China China
Mexico Mexico
Mexico MexicoMexico
AtradiusAtradiusCorporate
AtradiusCorporate
Corporate
Atradius
Management
Atradius
Management
Corporate
Management
Consulting
Corporate
Management
Consulting
Consulting(Shanghai)Management
Consulting(Shanghai)(Shanghai)
Co.,Consulting
Ltd.(Shanghai)
Co.,
Co.,
Ltd.
(Shanghai)Ltd. China
Co.,
Ltd.
Co., Ltd.
AtradiusAtradius
Seguros
AtradiusSeguros
deSeguros
Atradius
Crédito,Atradius
dede
Seguros
Crédito,S.A.
Crédito,Seguros
de
S.A.
S.A.
Crédito,de Crédito,
S.A. S.A.
USA
USA
USA
USA USAAtradiusAtradius
USA
USA
USA
USA USA
AtradiusAtradiusCreditAtradius
Insurance
CreditCreditAtradius
Insurance
Atradius
Insurance
Agency,Credit Agency,
CreditInc.
Insurance
Agency,Insurance
Inc.
Inc.
Agency,Agency,Inc. Inc.
Trade
Atradius
Credit
Trade
Trade
Atradius
Insurance,
CreditCreditAtradius
Trade
Insurance,
Insurance,
Inc.
Trade
Credit Credit
Insurance,
Inc.
Inc. Insurance,
Inc. Inc.
Netherlands
Netherlands
Netherlands
Netherlands
South Korea
South
SouthKorea
Korea
South South
Korea Korea
AtradiusAtradiusCreditAtradius
Management
CreditCreditAtradius
Management
Atradius
Management
CreditServices
CreditManagement
Services
B.V.
ServicesManagement
B.V.
B.V.
Services
Services
B.V. B.V.Netherlands
AtradiusAtradius
Trade
Atradius
Insurance
Trade
Trade
Atradius
Insurance
Insurance
Atradius
Brokerage
Trade Brokerage
Trade
Insurance
Brokerage
Yuhan
Insurance
Hoesa
Brokerage
Yuhan
Yuhan
Brokerage
Hoesa
Hoesa
YuhanYuhan
HoesaHoesa
RussiaAtradiusAtradiusCreditAtradius
Management
CreditCreditAtradius
Management
Atradius
Management
CreditServices
CreditManagement
Services(RUS)
ServicesManagement
LLC
(RUS)
(RUS)
Services
LLC
LLC
Services(RUS) (RUS)
LLCRussia
LLC Russia
Spain
Spain
Spain
AtradiusAtradius
CréditoAtradius
yCrédito
Caución
CréditoAtradius
yAtradius
yCaución
S.A.
CréditoCaución
de Crédito
Seguros
S.A.
yS.A.
Caución
dede
ySegurosyCaución
Seguros
Reaseguros
S.A. deyS.A.
yReaseguros
Seguros
Reaseguros
de Seguros
y Reaseguros
y Reaseguros

RussiaRussia
CLAL Credit
CLAL
CLAL
Insurance
CreditCredit
CLAL
Insurance
Insurance
Ltd.
Credit
CLAL Ltd.
CreditInsurance
Ltd. Insurance
Ltd. Ltd.

Israel Israel
IsraelIsraelIsrael 20%
20%
20%
Spain Spain
Tunisia
Tunisia
Tunisia
Tunisia
Tunisia
Compagnie
Compagnie
Compagnie
Tunisienne
Compagnie
Tunisienne
Tunisienne
pourCompagniel'Assurance
Tunisienne
pourpourl'Assurance
Tunisiennel'Assurance
dupourCommercel'Assurance
pour
duduCommerce
Commercel'Assurance
Exterieur
du Commerce
Exterieur
Exterieur
S.A.
du Commerce
S.A.
Exterieur
S.A. Exterieur
S.A. S.A.
3.92%
3.92%
3.92%

20% 20%3.92% 3.92%

AustraliaAustralia
Australia Australia
Australia
Chile
Compañia
Compañia
Compañia
de Seguros
deCompañia
deSegurosdeSeguros
Compañia
CréditodededeSeguros
Continental
CréditoCréditode Seguros
deContinental
Continental
CréditoS.A.
de Crédito
Continental
S.A.
S.A.Continental
S.A. S.A.

50%* 50%*

BelgiumBelgium
branchBelgiumbranchbranchBelgium
Belgiumbranchbranch

Chile
Chile
Chile
Chile 50%*
50%*
50%*
Austria Austria
Austria AustriaAustria
Crédito yCrédito
Caución
Créditoy yCaucióndo
CréditoCaución
BrasilCréditodoyGestaodo
Caución
BrasilBrasily CaucióndeGestaodo
GestaoRiscosBrasildedodede
RiscosBrasilGestaoRiscosCréditoGestaodedede
eCrédito
RiscosServicos
Créditode Riscosdee eServicos
CréditoServicosdeBrazil
Créditoe Servicos
BrazileBrazil
Servicos Brazil Brazil
LTDA
LTDA
LTDA
LTDA
LTDA
BelgiumBelgium
Belgium Belgium
BelgiumBrazilS.A.
BrazilBrazilBrazil Brazil
Crédito yCrédito
Caución
Créditoy yCaución
Seguradora
CréditoCaución
CréditoSeguradora
ySeguradora
Caución
de yCrédito
Caución
Seguradora
dede
eCrédito
Garantias
CréditoSeguradoradee eGarantias
CréditoGarantias
S.A.de CréditoeS.A.
Garantias
S.A.e Garantias
S.A.

Canada branch
CanadaCanadabranchbranchCanadaCanadabranchbranch

Canada Canada
Canada Canada
CanadaDAP Holding
DAP
DAPHolding
N.V.
Holding
DAP
N.V.
N.V.
Holding
DAP Holding
N.V. N.V.

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
2.37%
2.37%
2.37%

2.37% 2.37%

Czech Republic
Czech
CzechRepublicbranchRepublic
Czechbranch
Czech
branchRepublic
Republic
branchbranch

Czech Republic
Czech
CzechRepublic
Republic
Czech Czech
Republic
Republic
Gestifatura
Gestifatura
Gestifatura
Ltda. Gestifatura
Ltda.
Ltda.
Gestifatura
Ltda. Ltda.

PortugalPortugal
Portugal Portugal
Portugal
80%
80%
80%

80% 80%DenmarkDenmark
Denmarkbranch branch
DenmarkbranchDenmarkbranchbranch

DenmarkDenmark
DenmarkDenmark
Denmark
Giant-net
Giant-net
Giant-net
B.V.
B.V.
Giant-net
B.V. Giant-net
B.V. B.V.

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands

Finland branch
FinlandFinlandbranchbranchFinlandFinlandbranchbranch

Finland Finland
Finland Finland
Finland
GraydonGraydon
Holding
GraydonHolding
N.V.
Holding
GraydonGraydon
N.V.
N.V.
Holding
Holding
N.V. N.V.

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands

France branchFranceFrancebranchbranchFranceFrance
branchbranchFrance France
FranceAustraliaAustralia
branchAustraliabranch
Australia
branchAustralia
branchbranch
Austria branch
Austria
AustriabranchbranchAustriaAustria
branchbranchFranceFrance
GraydonGraydon
Incasso
GraydonB.V.
IncassoIncasso
GraydonGraydon
B.V.
B.V.
IncassoIncasso
B.V. B.V.
GermanyGermany
Germany Germany
Germany
GraydonGraydon
Nederland
GraydonNederland
Nederland
GraydonB.V Graydon
Nederland
B.V
B.V Nederland
B.V B.V

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands

GermanyGermany
branchGermanybranch
GermanybranchGermanybranchbranch
Greece branch
GreeceGreecebranchbranchGreeceGreece
branchbranch

Greece Greece
GreeceBelgiumBelgium
Belgium Belgium
BelgiumHong Kong
Hong
Hong
branch
Kong
Kong
Hong
branchbranchKong
Hong branch
Kong branch

Hong Kong
Hong
HongKong
Kong
Hong Kong
Hong
Kong Graydon
GraydonUK
GraydonLtd. UK
UK
Graydon
Ltd.
Ltd.Graydon
UK Ltd.
UK Ltd.

HungaryHungary
branchHungarybranchbranchHungary
Hungary
branchbranch

HungaryHungary
Hungary Hungary
Hungary
Hotel Maatschappij
Hotel
HotelMaatschappij
Maatschappij
Hotelde Wittenburg
Maatschappij
HoteldedeWittenburg
Maatschappij
Wittenburg
B.V. de Wittenburg
B.V.
B.V.
de Wittenburg
B.V. B.V.

Ireland branch
Ireland
IrelandbranchbranchIrelandIrelandbranchbranch

Ireland Ireland
Ireland

IrelandIreland
Iberinform
Iberinform
IberinformInternacional
IberinformInternacional
Internacional
S.A.u.
IberinformInternacional
S.A.u.
S.A.u.
Internacional
S.A.u. S.A.u.

United Kingdom
UnitedUnitedKingdom
Kingdom
UnitedUnited
Kingdom
Kingdom
Kingdom
Kingdom
Kingdom
Kingdom
Kingdom
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
2.7%
2.7%
2.7%
2.7% 2.7%
Spain Spain
Spain
Spain Spain

Italy branch
Italy
ItalybranchbranchItaly branch
Italy branch

Italy

Italy
Italy

Italy ItalyIberinmobiliaria,
Iberinmobiliaria,
Iberinmobiliaria,
S.A.u.
Iberinmobiliaria,
S.A.u.
Iberinmobiliaria,
S.A.u.
S.A.u. S.A.u.

Spain

Japan branch
Japan
JapanbranchbranchJapan Japan
branchbranch

Japan

Japan
Japan

GreeceGreece
GraydonGraydon
Belgium
GraydonBelgium
N.V.
Belgium
GraydonGraydon
N.V.
N.V.
Belgium
Belgium
N.V. N.V.

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands

Spain
Spain

Spain Spain

Japan JapanIGNIOS GestãoIGNIOSIGNIOS
IntegradaGestãoGestãoIGNIOS
Integrada
Integrada
IGNIOSdeGestãoRiscoGestão
deIntegrada
S.A.
deRisco
Risco
Integrada
S.A.
S.A.
de Riscode S.A.
Risco S.A.
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
InformesInformes
Mexico,InformesS.A.
Mexico,Informes
Mexico,de C.V.
Informes
S.A.
S.A.
Mexico,dedeC.V.
C.V.
Mexico,S.A. deS.A.
C.V.de C.V.

PortugalPortugal
Portugal Portugal
Portugal
80%
80%
80%

Luxembourg
Luxembourg
Luxembourg
branchLuxembourg
branchbranchLuxembourg
branchbranch

Mexico Mexico
MexicoMexicoMexico

Netherlands
Netherlands
Netherlands
branchNetherlands
branchbranchNetherlands
branchbranch

Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Invercyca,
Invercyca,
Invercyca,
S.A.u. S.A.u.
Invercyca,
S.A.u.Invercyca,
S.A.u. S.A.u.

Spain

Spain Spain

New ZealandNew
NewZealandbranchZealandNew
branchbranchZealand
New Zealandbranchbranch

New ZealandNew
NewZealand
Zealand
New Zealand
NewNCM
Zealand
(UK)
NCM
NCM
Holdings(UK)(UK)Holdings
NCM
Ltd.
Holdings
(UK)
NCM
Ltd.
Holdings
Ltd.
(UK) Holdings
Ltd. Ltd.

United Kingdom
UnitedUnitedKingdom
Kingdom
UnitedUnited
Kingdom
Kingdom

Norway Norway
branchNorwaybranchbranchNorwayNorwaybranchbranch

Norway Norway
Norway Norway
NorwayNCM Credit
NCM
NCM
Insurance
CreditCreditNCM
Insurance
Insurance
Ltd.
Credit
NCM Ltd.
CreditInsurance
Ltd. Insurance
Ltd. Ltd.

United Kingdom
UnitedUnitedKingdom
Kingdom
UnitedUnited
Kingdom
Kingdom

Poland branch
PolandPolandbranchbranchPolandPoland
branchbranch

Poland Poland
PolandUnited Kingdom
UnitedUnitedKingdom
Kingdom
UnitedUnited
Kingdom
Kingdom

PortugalPortugal
branchPortugalbranchbranchPortugalPortugalbranchbranch

PortugalPortugal
Portugal Portugal
Portugal
NCM UK NCM
Agency
NCMUK
UK
Ltd.
AgencyAgencyNCM UK
Ltd.
NCM
Ltd.
AgencyUK Agency
Ltd. Ltd.

Singapore
Singapore
Singaporebranch branch
SingaporebranchSingaporebranchbranch
SlovakiaSlovakia
branchSlovakiabranchbranchSlovakia
Slovakia
branchbranch

Singapore
Singapore
SingaporeSingapore
Singapore
Nederlandse
Nederlandse
Nederlandse
Financieringsmaatschappij
Nederlandse
Financieringsmaatschappij
Financieringsmaatschappij
Nederlandse
Financieringsmaatschappij
Financieringsmaatschappij
voor Ontwikkelingslanden
voor
voorOntwikkelingslanden
Ontwikkelingslanden
voor Ontwikkelingslanden
voor Ontwikkelingslanden
Netherlands
Netherlands
Netherlands
Netherlands
0.50%
Netherlands
0.50%
0.50%
N.V.
N.V.
N.V.
N.V.
N.V.
SlovakiaSlovakia
Slovakia Slovakia
Slovakia
OpenCompanies
OpenCompanies
OpenCompanies
B.V.
OpenCompanies
OpenCompanies
B.V.
B.V.
B.V. B.V.
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands

Sweden Sweden
branchSwedenbranchbranchSwedenSwedenbranchbranch

Sweden Sweden
Sweden Sweden
SwedenPT AtradiusPT
PTAtradius
Information
Atradius
PT
Information
Information
Atradius
Services
PT Atradius
Information
Services
Indonesia
Services
Information
Indonesia
Indonesia
Services
Services
Indonesia
Indonesia

Switzerland
Switzerland
Switzerland
branchSwitzerland
branchbranch
Switzerland
branchbranch

Switzerland
Switzerland
Switzerland
Switzerland
Switzerland
PolandPolandPoland Poland
99.99%
Poland99.99%
99.99% 99.99%
99.99%Starzy ski
StarzyStarzyi WspólnicyskiskiStarzyi Wspólnicy
i Wspólnicy
Kancelaria
Starzyski i Wspólnicy
Kancelaria
Kancelariaski
Prawnai Wspólnicy
Kancelaria
Prawnaspó
PrawnakaKancelaria
komandytowa
spó
spó
Prawnakakakomandytowa
Prawnakomandytowa
spó kaspó
komandytowa
kakomandytowa

Turkey branch
TurkeyTurkeybranchbranchTurkeyTurkey
branchbranch

Turkey Turkey
TurkeyUnited Kingdom
UnitedUnitedKingdom
branchKingdom
Unitedbranch
UnitedKingdombranchKingdom
branchbranch

United Kingdom
UnitedUnitedKingdom
Kingdom
UnitedUnited
Kingdom
LebanonLebanon
Lebanon Lebanon
48.9%
Lebanon
48.9%
48.9%
TheKingdom
Lebanese
The
TheLebanese
Lebanese
CreditThe
Insurer
CreditLebanese
CreditThes.a.l.
Insurer
Lebanese
Insurer
Credits.a.l.
s.a.l.
CreditInsurerInsurer
s.a.l. s.a.l.
KingdomNetherlands
Kingdom
Kingdom Netherlands
Kingdom
Kingdom
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
0.65%
Netherlands
0.65%
0.65%
Verenigde
Verenigde
Verenigde
Assurantiebedrijven
Verenigde
Assurantiebedrijven
Assurantiebedrijven
Verenigde
Assurantiebedrijven
Nederland
Assurantiebedrijven
Nederland
Nederland
N.V.
Nederland
N.V.
N.V. Nederland
N.V. N.V. Netherlands

AtradiusAtradius
Dutch
Atradius
State
Dutch
Dutch
Atradius
BusinessState
Atradius
State
Dutch
Business
N.V.
Business
Dutch
StateN.V.
Business
N.V.
State Business
N.V. N.V.

PolandPoland
NCM TeriNCM
Ltd.
NCMTeri
TeriLtd.
NCM
Ltd. Teri
NCMLtd.
Teri Ltd.

TurkeyTurkey
Technical
Technical
Technical
Credit Insurance
CreditTechnical
CreditInsurance
Technical
Insurance
Consultants
Credit Consultants
CreditInsurance
Consultants
S.A.
Insurance
Consultants
S.A.
S.A.Consultants
S.A. S.A.

AtradiusAtradiusEnterprise
AtradiusEnterpriseEnterprise
Atradius
Management
Atradius
EnterpriseManagement
Management
Consulting
EnterpriseManagement
Consulting
Consulting(Shanghai)Management
Consulting(Shanghai)(Shanghai)
Co.,Consulting
Ltd.(Shanghai)
Co.,
Co.,
China
Ltd.
(Shanghai)Ltd. China
Co.,
China
Ltd.
Co., China
Ltd. China* Minus one* *Minus
Minus
share
one
one
* Minus
share
share* Minusone share
one share

50

50
50 50 50
152

Spain
Spain

80% 80%

United Kingdom
UnitedUnitedKingdom
Kingdom
UnitedUnited
Kingdom
Kingdom
0.50%0.50%

Indonesia
Indonesia
IndonesiaIndonesia
Indonesia
BelgiumBelgium
Belgium Belgium
Belgium
48.9%48.9%
0.65%0.65%

Disclaimer
The information in the chapter ‘The global economic environment in 2016’ 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