Economic uncertainty remains the biggest issue for exporters globally, a world expert in risk management has warned.
Bhupesh Gupta, the newly appointed Asia Pacific CEO for Coface, says the current unpredictable world economy will not change anytime soon.
“There is too much complexity and too much inter-linkage,” he says.
“We are living in a world where economic uncertainty is going to continue for many more years.”
Issues such as Brexit will continue to affect economic stability and business confidence in future years, he predicts.
“For a stable economy globally you need a high level of consumer and business confidence at the same time – across the world. “This may never happen in our lifetime.”
In an exclusive interview with Dynamic Export during a recent visit to Sydney, Mr Gupta said the biggest threat – economic uncertainty – is also the biggest opportunity for his company.
With offices in 100 countries, Coface is a global leader in trade credit insurance and global risk management.
The Coface Group offers companies around the globe solutions to protect them against the risk of financial default of their clients, both on the domestic market and for export.
Last year the Group, supported by its 4,500+ staff, posted a consolidated turnover of €1.490 billion. It secured transactions of 40,000 companies in more than 200 countries.
Each quarter, Coface publishes its assessments of country risk for 160 countries, based on its unique knowledge of companies’ payment behaviour and on the expertise of its 340 underwriters located close to clients and their debtors.
Sydney is a key location in Coface’s Asia-Pacific network.
Mr Gupta, who was appointed to his new role in September this year, is a hands-on leader who enjoys being at the coalface with staff and clients.
“It’s important to connect with my teams at every level,” Mr Gupta told Dynamic Export.
Now based in Hong Kong, Mr Gupta, is able to draw on over 25 years of international experience in credit, origination and risk management.
Before joining Coface he had a long and successful career as a senior executive with GE Capital.
During his Sydney visit Mr Gupta was accompanied by Hugh Burke who was recently appointed to the position as Chief Commercial Officer of Coface Asia Pacific Region.
Both executives met with Coface Sydney staff to learn more about the Australian operation.
“Australia is an important market for Coface – and one of our best markets,” said Mr Gupta.
This is mainly due to Australia’s efficient legal system, jurisdiction, government processes, business culture and strong work ethic.
“It’s a market we are keen to grow.”
For Australia, commodities, construction and mining remain at the top of the risk sectors, while pharmaceuticals and consumer goods tend to be much more stable, says Mr Gupta.
He admits Australian exporters have been slow to embrace the concept of trade credit insurance to reduce their risk.
Intrinsic part of trade cycle
Surprisingly, only about 10% of exporters in Australia take credit insurance cover, compared with 40% in Europe.
The reasons are simple, he says. Many exporters aren’t aware or don’t understand how credit insurance works.
And because there is a limited number of companies in the Australian marketplace offering the product there has not been a great deal of “noise” about its benefits.
“But we are an intrinsic part of the trade cycle,” Mr Gupta says proudly.
“We will do what we can to grow the market (in Australia) – there are definitely opportunities here,” he says.
Three-year strategic plan
For Coface, 2016 has been a stellar year.
International ratings agency Fitch recently affirmed the company’s AA- rating, reflecting the company’s “strong business profile and geographical diversification in credit insurance and its solid capital position.”
Fitch’s affirmation follows the launch of Coface’s new three-year strategic plan Fit to Win.
Fit to Win has identified three strategic priorities for Coface to become the industry’s most agile global trade credit partner:
1. Strengthen risk management & information
2. Improve operational efficiency & client service
3. Implement differentiated growth strategies
Mr Gupta says with Fit to Win clients can expect a better, faster and more responsive service than ever before.
“We want to ensure our customers get the best possible experience,” he says. “They can expect to see an increasing focus on customer service.”
Earlier this year Coface was a big winner at the Asian Banking and Finance (ABF) Insurance Asia Awards 2016.
The company was named Asian Credit Insurer of the Year (Regional Award) and Digital Insurance Initiative of the Year – Singapore (Country Award).
The Digital Insurance Initiative of the Year – Singapore award was in recognition of its Easyliner and CofaMove insurance products.
Easyliner, a simple online solution to protect against unpaid invoices. It is fully operated online whereby customer can generate instant quotation and contract in just a few minutes. Coface is also the first credit insurer that provides a smartphone application CofaMove for its customers to manage their customer and supplier portfolio.
Over the past 20 years Coface has had a direct presence in 13 markets in the Asia Pacific region.
Mr Gupta says clients shouldn’t expect to see any dramatic changes in the next couple of years.
Better and faster delivery
“It will be more about the further development of our existing products and the delivery of those products,” he says.
“We will strive to provide better delivery, faster delivery and more efficient coverage.
“Our job is to help lubricate trade across the world … to help people be more efficient and focused while trading.
“We are here to help our customers sell their products and the sale is not complete until you’ve been paid for it.
“We want to give them more certainty in getting their cash back so they can focus on what they are best at – manufacturing and selling products.
“We take the risk for them.”