Download AGENDA – draft 1

FILE 2012032
MINUTES
COMMITTEE OF UNDERWRITERS MEETING
HOTEL LEV – LJUBLJANA
15 & 16 MARCH 2012
Chair: Felipe Buhigas (Vice-Chair)
Present:
Invited Guests
Felix Winzap
Alessandro Terzulli
PASA
SACE SRV
Austria
Valerie Talbot
GARANT
Belgium
Ine Vanreusel
DUCROIRE|DELCREDERE
France
Bertrand de la Boussiniere
Emanuel Cortyl
COFACE
GROUPAMA ASSURANCE CREDIT
Germany
Heike Verwold
Markus Stefan Deubert
MUNICH RE
ZURICH INSURANCE PLC
Israel
Adi Nov
ICIC
Slovenia
Bojana Kifnar-Strmcnik
Simona Pirc
Igor Pirnat
SID-FIRST CREDIT
SID-FIRST CREDIT
SID-FIRST CREDIT
Spain
Antonio Ocaña Madrid
Pedro Regata Cuesta
Felipe Buhigas
Rafael Echevarria
ATRADIUS - CYC
CESCE
MAPFRE
MAPFRE
Switzerland
Nazmije Skoverqani
Christoph Virchow
AXA-WINTERTHUR
AXIS RE
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United Kingdom
Nick Walklett
Ray Massey
HCC INTERNATIONAL
QBE
Apologies:
Chair – Rossella Pappalardo / SACE BT; Eric Lenoir / ATRADIUS; Hugues Bourgain /
COFACE; Jochen Böhm / COFACE DEUTSCHLAND; Arthur Schellekens / COFACE
NEDERLAND; Ian Tacey / HCC INTERNATIONAL; Cai Lixin / PICC; Jianzhong Kang /
PICC; Marina Machan-Kaiser / PRIMSA; Martin Penn / QBE; Trevor Williams / QBE;
Natasa Arko / SID FIRST CREDIT; Natasa Peterlin / SID FIRST CREDIT
Not Present:
ASPEN RE – Switzerland
ATRADIUS - France
CHINA I&G - China
COFACE AUSTRIA – Austria
COFACE DEUTSCHLAND – Germany
COFACE NEDERLAND – Netherlands
LOMBARD – South Africa
NATIONALE BORG - Netherlands
NOVAE GROUP - UK
PARTNER RE - Switzerland
SCOR SWITZERLAND - Switzerland
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1. CONSTITUTION OF MEETING
The Vice chairman opened the meeting and delegates were given the opportunity to introduce
themselves
2. CONFIRMATION OF MINUTES
The minutes of the meeting held on 22 & 23 September 2011 (Amsterdam) (FILE 2011104)
were confirmed.
3. THE EUROZONE CRISIS - TOUR DE TABLE
Delegates were invited to give a brief review of developments in their home countries,
considering the effects of the Eurozone crisis (country downgrades):
Belgium:
A document on Belgium economy was prepared.
Germany:
In summary, German economy is still running well and considered as being robust. The
economy slightly declined in the last months of 2011 due to the European debt crisis and the
global slowdown. A recession is expected for the next months, but a sustained period of
weakness is not expected. A positive sign is that many companies are still planning to invest.
Main export markets for Germany are France, USA, The Netherlands, UK and Italy. German
Exports - which are an important factor for Germany - will probably be influenced negatively
in the next months, but domestic business is expected to be relatively stable.
The big unknown is the development of the sovereign debt crisis and the coping with it. The
European Central Bank announced the tightening of the financing conditions which will have
an impact on companies.
Unemployment rate slightly increased from 7.1% to 7.3% in January 2012.
In 2011 growth was 3% (in 2010 this was 3.6%). For 2012 the German economy is forecasted
to grow at 0.2%.
Inflation in 2011 was 2.2% (in 2010 1.1%). For 2012 this is expected to stand at 1.7%.
Sectors: chemical industry has improved, as well metal and electronics. Construction is
getting worse. Automotive was very good in 2011, e.g. Volkswagen rewarded each and every
employee with 7,500 Euros due to the good result in 2011.
Israel:
S&P has upgraded Israel's long-term foreign-currency rating from A to A+. According to
S&P the rating reflects Israel's improved economic policy flexibility as a result of strong
growth and careful macroeconomic management, continued government debt burden
reduction and responsible fiscal policy.
However, the global crisis remains the main concern for the Israeli economy as Israel is an
export oriented country (40% of GDP is export).
The Geo-politic climate in the Middle East, specially situation in Syria and Iran as well as the
political internal issues (peace process) are also a major concern in assessing Israel's risk in
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the following months. Nevertheless, Israel's risk premium is lower than in 2011 (1.9% on 5
year CDS) and the local currency evaluated.
During the second half of 2009 there was a strong rebound in the Israeli economy, 2010 and
the beginning of 2011 were also very positive returning to a 5% growth GDP. However, due
to the slowdown in the world economy in 2011 full year GDP growth is expected to decline
to around 3.8%. Q4 GDP growth rate was 3.2%.
One of the main indicators for a slowdown is the decrease in export in Q3 and Q4 We also
had a decrease in private consumption of 4% in Q4.
Budget deficit for 2012 is expected to increase from the 1.5% in the last 2-3 years due to
decline in tax collection. Current trade deficit for February has climbed to 0.58Billion USD,
after two years of very low deficit and surpluses.
The banking sector in Israel remains stable. Weaker economic performance, concerns about
some corporate debt and global financial crisis did hurt bank profitability. However, major
crisis is unlikely, as Israeli banks have had a more cautious approach. The regulator continues
in implementing steps to strengthen both equity and visibility.
Unemployment rate has increased up to 8% during 2008 crisis, however during 2011 it is
down to a very low level of about 6% and is still kept at a very low rate. The expect inflation
rate is reduced to 2-2.5%, Interest rate is at 2.5%.
Italy
A presentation on Italian economy was prepared.
Slovenia:
Slovenian economy in brief:
 GDP:
o 2009 contracted by 8.1%;
o 2010 modest increase by 1.2%;
o 2011 contracted by 0.2%;
o 2012 contracted by 0.9% (estim.);
o 2013 modest increase by 1.2% (forecast.).
 Unemployment:
o 2009 9.1%,
o 2010 10.7%;
o 2011 11.8%;
o 2012 12.9% (estim.);
o 2013 13.5% (forecast)
 Export:
o 2010 7.8% growth;
o 2011 6.8% growth;
o 2012 1.4% growth (estim.);
o 2013 5.4% growth (forecast)
 General government balance (as % in GDP):
o 2009 -6;
o 2010 -5.6;
o 2011 -5.7 (estim.);
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o 2012 -4.2 (forecast)
Government gross debt (as % in GDP):
o 2009 35.4;
o 2010 38.8;
o 2011 47
Inflation (in %):
o 2009 0.9;
o 2010 1.8;
o 2011 1.8; 2012 2.0 (forecast)
High risk sectors: construction, furniture and textile
Low risk sector: pharmaceutical sector, chemical
The Slovene sovereign debt was downgraded by S&P on 13rd January to A+. Fitch followed
on 27th January with a downgrade to A and also placed two of Slovenia's state-owned banks
on a negative outlook. Slovenia's banks are adjusting to higher capital ratios of 12% as well
as increasing their provisioning for bad loans. Slovenia's public debt to GDP ratio rose from
23% in 2007 to 47 at the end of 2011. New government that was elected in the end of 2011
has a very difficult task to impose deep austerity measures as well as to begin with structural
reforms in pension and education system and many others.
Spain:
Poor growth. GDP fell 0.3% in the 4th quarter of 2011 (barely +0.3% year-on-year). Real
growth of GDP in all of 2011 is estimated at 0.7%.
Prospects for 2011 are negative: in the context of the foreseeable European recession,
the majority of analysts forecast that GDP will decrease more than 1% this year. Deficit in
2011 will rise to 8% approx. of GDP and targets agreed will not be met. The EU expects
budget deficit to be cut down further to 4.4% of GDP in 2012.
Economic stagnation. In 2011 indicators of all economic sectors were negative: neither
construction nor the industrial sector managed to recover after the long depression,
while services (except tourism) suffer the effects of weak private consumption and
stagnating credit.
Very high unemployment. The economic downturn triggered a strong increase in
unemployment, the number of jobless now exceeds 5 million.
In the last quarter of 2011, the number of unemployed rose by 295.300 (577.000 new jobless
registered in the last 12 months). This tendency will continue during 2012 with
unemployment at about 23%.
Descent of prices. After peaking at 3.8% in April, prices initiated a slow descent down to 2%
in January 2012. Underlying inflation stands at 1.5%.
Even though the ECB recently cut interest rates to 1%, prices are expected to remain stable at
about 2%.
Insolvencies: 2011 closes with an increase in insolvencies of 12%, 6.056 companies, i.e.,
doubling the figure declared in 2008.
Switzerland:
A presentation on the Swiss economy was prepared.
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4. ITALY: THE PRINCIPAL ECONOMIC INDICATORS AND FORECASTS FOR
2012/2013
A presentation on current economic trends and outlook for Italy was given by Alessandro Terzulli,
Senior Economist at SACE (FILE 2012016).
5. HUNGARY – TOUR DE TABLE
Markets were reviewed paying special attention to Hungary, where members shared their
experience in particular with regard to payment trends and levels of commitment.
6. AUSTRALIA
It was agreed to postpone this topic.
7. TRADE SECTORS
Though the situation of main trade sectors in each country was discussed during the tour the
table, it was decided to review the automotive, construction and steel industries in the next
meeting.
8. BRAZIL
A country presentation was given by Rodolfo Bretscher from Novae.
9. RISK UNDERWRITING AND SALES
Christoph Virchow from Axis Re introduced a debate among members concerning the
cooperation and relationship between risks underwriting and sales teams within companies.
10. NEW SOURCES OF ENERGY – COMMODITIES AND ENERGY
It was agreed to postpone this topic.
11. NEW TOPICS
The following topics were proposed though members agreed on having the possibility to suggest new
topics a few weeks before the next meeting:
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Review on the situation in Spain
Review on the situation in Portugal
Presentation on China
Special topic about information providers
Review of the automotive, construction and steel industries
Other remaining topics (Australia, renewable energies) could be included in the agenda for
the next meeting.
12. OTHER BUSINESS
The next meeting of the Committee will form part of the Autumn Meetings 2012 and will
be held on Thursday 20 and Friday 21 September 2012 in The Hague.
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