1. FACTORING AND CREDIT INSURANCE COMPETITORS OR COMPLEMENTS Dominique CHARPENTIER WARSAW, October 24th 2003

2. CONTENT INTRODUCTION: THE ORIGINS
FACTORING AND CREDIT INSURANCE AS COMPETITORS
FROM A STATIC ANALYSIS
FROM A DYNAMIC ANALYSIS
FACTORING AND CREDIT INSURANCE AS COMPLEMENTS TO EACH OTHER
BUSINESS RELATIONS BETWEEN BOTH ACTIVITIES
COMBINED PRODUCTS
CONCLUSION: TOWARDS A GLOBAL RECEIVABLES MANAGEMENT CONCEPT

3. INTRODUCTION THE ORIGINS
Kapitel
INTRODUCTION THE ORIGINS
CREDIT INSURANCE:
From the early years of 20th century
To make the domestic commercial transactions more secure
Government schemes to boost exports
FACTORING:
In the 60ies
To give access to financing sources to companies unable to use the classical bank sources
Gerling Gesellschaft/Abteilung

4. FACTORING AND CREDIT INSURANCE AS COMPETITORS FROM A STATIC ANALYSIS
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FACTORING AND CREDIT INSURANCE AS COMPETITORS FROM A STATIC ANALYSIS
CREDIT INSURANCE: A BLEND OF 3 SERVICES
INFORMATION
COVERAGE AND INDEMNIFICATION
RECOVERY
FACTORING: A BUNDLED OFFER OF SERVICES
FINANCING
COVERAGE
PURCHASE WITHOUT RECOURSE
RECEIVABLES MANAGEMENT
ACCOUNTING OUTSOURCING
DUNNING, COLLECTION, PAYMENTS ALLOCATION, RECOVERY
OVERLAPPING AREAS OF SERVICES

5. FACTORING AND CREDIT INSURANCE AS COMPETITORS FROM A DYNAMIC ANALYSIS
CREDIT INSURERS ADD VALUE TO THEIR BASIC PRODUCT
TOWARDS (INDIRECT) FINANCING VIA
LINKS WITH BANKS: THE CERIP PRODUCT OF EULER SFAC AND COFACE IN FRANCE
LINKS TO SECURITISATION: EUREFIN PRODUCT OF GERLING NCM
TOWARDS FULL COLLECTION SERVICE
FROM RECOVERY TO COLLECTION
IT TOOLS TO MANAGE CREDIT INSURANCE POLICY
INTERIM CREDIT MANAGEMENT
FACTORS UNBUNDLE THEIR PRODUCT
NON MANAGED FACTORING
HOME FACTORING
INVOICE DISCOUNTING
MATURITY FACTORING
BOTH SECTORS TO SERVE THE SAME BUSINESS NEEDS

6. FACTORING AND CREDIT INSURANCE AS COMPLEMENTS BUSINESS RELATIONS
MOST FACTORS RELY ON CREDIT INSURANCE POLICY
FOR ALL OR PART OF THEIR RECEIVABLES
FROM A WHOLE TURNOVER OR AN EXCESS APPROACH
SUBCONTRACTING THE BUYER RISK MANAGEMENT
ALL 3 BIGGEST CREDIT INSURERS HAVE THEIR OWN FACTORING ORGANISATION (S)
EULER-HERMES: EUROFACTOR
GERLING NCM FACTORING ORGANISATION
COFACE:
COFACREDIT IN FRANCE
LINK TO FACTOREM
AK FINANZ IN GERMANY

7. FACTORING AND CREDIT INSURANCE AS COMPLEMENTS COMBINED PRODUCTS
ADVANCED DELEGATION FACTORING CONTRACTS
DELEGATION CONTRACTS ARE USUAL IN FACTORING, BUT
USUAL C/I LIMITS TO INDEMNIFICATION
RECEIVABLES GIVEN BACK TO THE SELLER IN CASE OF NON PAYMENT
ADVANCED DELEGATION CONTRACT (CONCERTO PRODUCT OF GERLING NCM)
100% INDEMNIFICATION
MAINTAINED FINANCING UNTIL INDEMNIFICATION
ONE SHOT FACTORING
OPEN OPTION TO POLICY HOLDER
WITHIN THE WHOLE INSURED TURNOVER (AVOID ANTI-SELECTION)
ONE OPERATION FACTORING
CREDIT INSURANCE POLICY ADMINISTRATION
FACTOR USUALLY HANDLES THE SELLER’S C/I POLICY
OPEN THIS SERVICE TO NON FACTORED INSURED COMPANIES

8. CONCLUSION
CONVERGENCE IS NOT OPPOSING FACTORING AND CREDIT INSURANCE TO EACH OTHER
CONVERGENCE IS CREATING A GLOBAL CONCEPT OF RECEIVABLES MANAGEMENT
A TOOL BOX TO ADAPT THE OFFER THE THE SPECIFIC NEEDS OF EACH COMPANY