Atradius Group is a world leader in trade credit risk thanks to a simple philosophy: close collaboration with its customers
Writer: Dani Redd | Project Manager: Sam Love
“You always think about insuring your property, or about key man insurance if you are an SME, and insuring your fleet if you have cars. It is mandatory to ensure these assets. But a business’ receivables balance sheet – often its largest asset – goes uninsured a lot of the time,” Gordon Cessford tells us.
He heads up the America region of Atradius, a multinational business specialising in trade credit insurance. In America, trade insurance is not very well known, and the market is underpenetrated.
This is something that Atradius is here to change.
“Credit insurance is a very simple product,” Cessford explains. “Company A sells to Company B. They give them an amount of time – say 60 days – to settle the receivable. If after that time the bill has not been settled, they flag it to Atradius. We try and collect, and if we can’t, then we settle that invoice.”
An insured customer thereby has the assurance that they will receive payment for services they provide. It gives larger companies confidence to explore new markets and offerings while, for smaller and medium businesses, it provides vital financial security.
In today’s current economic climate, trade credit insurance has never been more necessary.
Gordon Cessford, President of Atradius North America
"Feedback is such a valuable thing. It lets you know whether you are going in the right direction or if a particular area, such as underwriting or claims, needs a stronger focus”
A client-focused business
The Atradius Group is a world leader in credit insurance and debt collection, having been in operation since 1935. It currently has 3,700 staff members operating in 54 countries and revenues in excess of two billion euros. Atradius has 12 offices across the U.S., Canada and Mexico. The U.S. operation, Atradius Trade Credit Insurance, Inc. (ATCI) is headquartered near Baltimore, Maryland and also has offices in New York, Chicago, Irvine, Dallas, New Jersey and Indiana. ATCI works in two ways – with a range of broker partners and through its agents in the field who bring in direct business.
“One of the challenges in the U.S. market is the geographical spread, because we prefer being close to our clients. Working with such vast geographical distances makes it difficult to be as close as we would like to these clients,” Cessford says.
“I’ll give you an example – in China, most of the business is done in Beijing, Shanghai or Shenzhen, so with three offices we captured 60-70 percent of the market. You can’t do that with the U.S., it’s just too diverse. Our plan in the U.S. is to expand our reach so we can be closer to our clients.”
One can see the company’s commitment to this goal if we look at the growth of offices and employees over the course of the past eight years: ATCI more than tripled the amount of sales people and regional offices since 2012.
Being close to its clients is one of Atradius’ main goals, as well as, according to Cessford, one of the key factors differentiating them from the competition. The success of this approach is reflected in 94% customers renewing their contracts year over year, an industry high record.
The company takes pride in its customer service and makes sure that it is responsive to client requests and queries. On average, it replies to 89 percent of client credit limit requests within 48 hours.
“In order to respond to client request as quickly as we do, we have to have access to information such as credit reports and financials to underwrite it. For small-scale requests, we have artificial intelligence to aid the process, but a lot of it is done with people looking at numbers and giving expert opinions on the clients. We have a significant amount of information we invest in to help give such a quick response,” the President of Atradius in North America explains.
Atradius invests heavily in technology. It has a seamless online application process and a comprehensive analytics tool that clients can use to take a further look at their portfolios. It is also developing an application programming interface (API) that will allow customers and clients to directly interact with its systems – instead of logging on and asking for a credit limit, it is done automatically through their ERPs.
“That’s very much where we see our strong point moving forward – digital tools that will help us better serve our customers when we cannot physically be there in front of them,” Cessford said.
Cessford believes that building relationships is key to growing and maintaining business.
“We have our own sales team but broker partners are our lifeblood. We are very committed to working closely with them,” he explains.
“We have open, honest, transparent dialogue with them. They are brokers so their role is to find the best possible deal for their clients, but we work closely with them. I call it a true partnership. We have tough discussions with them – I don’t shy away from it, and neither do they; they like to engage.”
ATCI relies on brokers for constructive feedback about its products and services. Before COVID, it would hold regular meetings with its brokers to see what they are looking for and how they can improve. In 2021, it will undertake an extensive survey project to help ascertain the company’s strengths and areas needing work.
“Feedback is such a valuable thing. It lets you know whether you are going in the right direction or if a particular area, such as underwriting or claims, needs a stronger focus. We rely heavily on our broker partners to give us that feedback,” the President of ATCI says. Atradius’ continued high performance is a key aspect of relationship-building with brokers.
“We have to make sure we offer the service that is sold to clients – if they tell their client ‘go with Atradius, they are the best in class, have great underwriting skills and are fun people to work with,’ and then we’re none of those things, it doesn’t work. [Brokers] are good people to work with because they are always challenging us,” Cessford explains.
Moving the focus inside of the organization, he believes that Atradius is a high-performing company thanks to its excellent staff.
“Our people are the core of the business, and we have the best people in the business on our team,” he tells me.
Cessford believes that attracting and maintaining the best talent is fundamental to the business. Atradius ensures staff are well supported, both from a wellbeing perspective and in terms of their growth within the company.
It is important to understand each individual staff member – their goals, areas of strength and areas of development. Cessford welcomes internal feedback as much as he does external feedback, as it helps him develop his staff, which he believes is Atradius’ biggest asset.
“I have to give credit to our team who are hardworking, dedicated and committed to providing the best possible service to our clients, with a good deal of fun and smiles at the same time,” he says.
During 2020, the business landscape changed drastically on a week-by-week basis. Businesses have had to adapt and become more resilient. ATCI is no exception. The company put the health and safety of its staff first and foremost, so employees have been working from home since the onset of the pandemic to provide uninterrupted service to their clients.
Its second objective was to build more flexibility into products for its clients. In particular, Atradius Group offered some extensions in reporting deadlines and premiums settlement to ensure that businesses affected by Covid19 related closures and supply chain disruption could continue being protected by its insurance policies.
“This allows companies to still have the benefit of the coverage, which is what they need at the moment, because there’s such uncertainty around lockdown and businesses remaining solvent,” Cessford explains.
The pandemic, however, negatively affected the trade credit insurance sector as well.
“We are very up front about this issue,” Cessford says. “Clearly, the impact of COVID-19 on businesses means we have to manage our exposure levels, by reducing or sometimes removing credit limits. It’s not great news, but we are very transparent about what we’re doing and how and why we’re doing it.”
Atradius learned how to react from the 2007-2008 global financial crisis. “This time around, communication has been key. We’ve made coverage reductions with full transparency to the client. We have had great feedback from clients and brokers praising us for the way that this has been done. Despite the fact that reducing coverage is not what we prefer, the positive feedback we’ve received has been really heart-warming.”
Cessford stresses that coverage reductions should not be seen as Atradius working against the client; rather, it is working with them to help manage their credit limit.
“We are in the business of risk management and we are true partners with our clients,” he says. “We are in the business of supporting them – it’s not just about risk transfer. For example, with accident insurance, you have an accident, you get paid. With credit insurance, someone does not pay, you get your claim settled. But we are also managing that relationship so we ask our clients to only take risks they can afford. We’re adding value to that relationship and complementing what a company is already doing for their credit management procedures.”
Adding value to client relationships is what ATCI wants to continue doing. Like any business, it wants to continue growing, with plans to expand its reach throughout North America. But Cessford stresses the importance of growing sustainably and continuing to build partnerships and nurture staff talent.
“I want to work with clients and brokers who have a long-term goal in mind, not those who are here today, gone tomorrow. That is not the kind of relationship we look for,” he concludes.