According to Intrum Justitia, bad debts of more than € 350 billion were written off in Europe in 2013, which is around three percent of all outstanding transactions. Internal research into Dutch companies with debtor portfolios in excess of € 250 million reveals that some companies have had to write off up to 10 percent of their net result on their customers. According to some estimates, around 25 percent of companies actually go bankrupt due to bad debt losses alone. It is with good reason that many annual reports state that credit risks are often the biggest threat to business continuity. In this article, we explain our approach to credit risk management for corporates.
European insurers are not only facing extremely low interest rates and the introduction of the Ultimate Forward Rate (UFR), they must especially take into account the presumed requirements of Solvency II, due to come into effect in 2016. How does an insurer approach the risks in 2014? Theo Berg, director of Group Actuarial Risk Management at the Delta Lloyd Group, gives his view.
On a day to day basis I regularly hear “I have to pop to Risk to find out what they think about this”, or “What does Compliance say?” and “Does this fit in with our risk allocation?” The responsibility for a transaction seems to be split over many different levels. So who is really solely responsible for their own work?
The shutdown of the American government illustrated once again the potentially huge implications of liquidity risk. Recent history is littered with liquidity events, resulting in increasingly strict regulation in this sphere.