Euler Hermes accomplished very strong results in 2018, with revenues rising 7% to EUR 2,705 million and volume-driven growth spread across most regions.
Operating profit increased by 17% to EUR 431 million, due to a combination of revenues growth, higher service margins, and a lower net combined ratio. The last, which stands at 77.9%, is decreasing (-3.3%-p) thanks to higher claims run off and a lower expense ratio. Net income increased by 8% to EUR 345 million. In commercial terms, Euler Hermes achieved this year the highest level of new business in its history, which, combined with a healthy retention rate of 90%, boosted organic growth to its highest level since 2013. Consequently, as of December 31st, 2018, Euler Hermes reached its historically highest level of commercial portfolio value in trade credit at EUR 2,096 million, up 6%. In addition, the Group also confirmed its rank as #1 brand recommended for trade credit insurance in 2018, for customers and brokers.
These excellent results allow Euler Hermes to speed up its new strategy “Confidence to be bold” to expand beyond its traditional business line, trade credit insurance (TCI), thus reinforcing surety, fraud solutions, insurance financing, and digital partnerships. Indeed, Euler Hermes is paving its way to becoming the most innovative B2B trade credit insurer and redefining trade finance. This translated into various initiatives throughout the year.
“This year has been very special, with our main shareholder Allianz now owning 100% of our company, thanks to the successful simplified tender offer it has launched in 2018. It is a very positive recognition of the hard work and strong results all of us have contributed to achieve over the years. Our 2018 full year results confirm the relevance of our strategic plan with record highs in terms of commercial performance. Our net income reaches €345 million, up 8.4%, with all regions contributing to organic growth. In parallel, we are boosting our investments in terms of innovation and customer centricity, to speed up the activation of our 2019-2021 strategic plan. We want to become the most innovative B2B insurance company and these latest results clearly confirm that we are on the right track”, said Wilfried Verstraete, Chairman of the Euler Hermes Board of Management.
Cristina Rusuleanu, Country Manager, Euler Hermes Romania, said in her turn: “After a decline in the number of insolvencies over the last 4 years (excluding 2017), we expect an increase in insolvency by + 3% in 2019. Thus, if in 2018 the economic environment was more favorable to agriculture-related activities (the number of insolvencies decreasing by -21% vs 2017) and wholesale and retail trade (-4%), but more adverse to economic agents in the transactions sector real estate (+ 43%) and hotels and restaurants (+ 13%), 2019 will increase payment delays that will require a high level of financial risk monitoring by companies. In this regard, our specialists believe that the industries most affected in 2019 will be construction, retail, agri-food, transport and services. “
In March 2019, under the umbrella of “Confidence in Tomorrow,” Euler Hermes also launched in Romania the new, more interactive, friendlier and easier to use site with country and sectoral risk analyzes. It is a powerful tool that helps customers select the right prospects and make business with confidence.
Euler Hermes is a credit insurance company that offers a wide range of bonding, guarantees and collection services for the management of business-to-business trade receivables.