Now that just over two months have passed since the World Health Organization declared Covid-19 a global pandemic, we have produced an analysis of how the crisis is affecting credit and political risk insurance (CPRI) and the response of our market thus far. Read it here.
BPL Global has today published its annual Market Insight report revealing that the oil, mining, metals and extractive industries continue to make up the largest proportion of demand for CPRI coverage.
Around a third of all BPL Global’s 2019 enquiries related to these sectors – of which around half were bank-financed deals.
Commenting on the findings, Sian Aspinall, Managing Director, BPL Global, says: “With many insurers now closed to any coal-related risk, and enquiries for renewables increasing, it will be interesting to see how this trend develops over the next few years. Certainly, we can expect the CPRI market to continue to diversify into new areas over the medium-to-long term.”
According to the report, the risks faced by CPRI insurers also continue to evolve, exemplified by civil unrest in robust economies such as Hong Kong and Chile. The Market Insight report shows increasing enquiries to cover risk located in OECD countries – a continuing development from historical demand for CPRI to cover emerging market risk. This demand accounted for approximately 25% of the broker’s enquiry flow in 2019, with over 10% relating to deals where the US, UK or France were the underlying country of risk.
Moreover, an analysis of the broker’s live policies shows a 46% increase in its exposure to North America in 2019, which has nearly doubled since January 2018 when it stood at US$1.35bn. Likewise, its exposure to Europe has increased to US$6.47bn – up by 75% compared to January 2018 when it stood at US$3.65bn. On the other hand, the broker’s exposure to Russia has decreased by approximately a third since January 2018 when it was US$1.13bn, reflecting the increasing impact of international sanctions on the market.
The report also reveals the findings of its annual CPRI market capacity survey. While Lloyd’s focus on the “Decile 10” of the least well-performing syndicates and challenging broader market conditions have led to a handful of insurers exiting the CPRI market, there remains strong capital support for this class of business, and overall maximum per risk capacity has remained stable in 2020 compared to the two previous years with the trend towards more medium-term capacity continuing.
Banks and financial institutions continue to represent the bulk of claims collections since the 2008 global financial crisis. Across the market as a whole, just over US$3bn across 486 claims were settled to such entities between 2007–2018, with BPL Global collecting approximately a third of these claims.
BPL Global has today announced the appointment of Anna Morgan as its new Legal Director to support and advise on legal matters across all product lines and client bases. Anna will work closely with the claims department, as well as advising on regulatory matters and policy wordings.
A qualified lawyer, with a background in finance law, Anna joins from Mitsubishi UFJ Financial Group (MUFG), bringing over eight years of in-house banking experience.
Anna comments: “I am very excited to be joining BPL Global at a time of increasing focus on legal issues from those on the frontline of developing the CPRI product. After working with BPL Global in the past, I’ve always been impressed by their professionalism and expertise. Having seen first-hand the benefits the CPRI product can bring to banks, in terms of enabling business as well as the capital relief advantages, I am pleased to be able to lend my perspective and knowledge to help develop it further.”
James Esdaile, Managing Director, BPL Global, comments: “As an accomplished legal expert with both in-house banking experience and familiarity with the CPRI market, Anna will be an invaluable resource for the BPL Global team, and instrumental in our ongoing effort to optimise the CPRI product for clients. We warmly welcome her to the team.”
Anna joined MUFG’s legal department in 2011, supporting its structured finance and corporate lending activities across EMEA. Working closely with the Credit Exposure Solutions team, Anna was heavily involved in developing the bank’s understanding and usage of the product, including helping to establish the bank’s template policy wording. In 2018, Anna moved across to MUFG’s Credit Portfolio Management team where she continued working with the product, as well as advising on risk mitigation strategies more generally.
Prior to MUFG, Anna worked for over six years at international law firm, Reed Smith (formerly Richards Butler) in its banking and finance department and took secondments to Barclays Commercial Bank and RBS.
Anna is a member of the Law Society of England and Wales and graduated in Modern European Languages (French and German) from the University of Durham.
BPL Global has opened a UK Branch of its French subsidiary, Berry Palmer & Lyle SAS, to service its existing European Economic Area (EEA) business and be fully ready for Brexit, whatever final form it takes.
Based in Paris, Berry Palmer & Lyle SAS has been serving the needs of French banking, exporter and corporate clients since 2001. The newly-formed UK Branch will operate under its management and control.
Sian Aspinall, Managing Director, BPL Global comments: “Servicing European-based clients has always been a vital part of our business and Brexit has in no way diminished this. Following a year’s worth of careful preparation, the establishment of a new UK Branch of our French company will ensure continuity and minimal disruption for our European clients post-Brexit. Amid the delays and uncertainty, we have taken the decision to open the UK Branch now, so that we are ready for whatever form Brexit may ultimately take.”
While new and existing EEA business will be serviced by the new UK Branch from 1st November 2019, BPL Global’s UK entity, Berry Palmer & Lyle Ltd, will continue to handle all UK and non-EEA based business as usual.
BPL Global’s Chairman, Charles Berry, has been appointed as the President of the Insurance Institute of London (IIL). Berry, who succeeds Nicolas Aubert, CEO, Willis Towers Watson GB, will serve in office for the 2019-20 term alongside new Deputy President Anthony Baldwin, CEO and Board Director, AIG UK.
Delivering his first presidential address at the IIL’s AGM on 30th September, Berry said: “It is a great honour to serve the Institute as President, but somewhat daunting as I have big shoes to fill. I will do my very best to represent all sectors of the market and build upon the increasing momentum and hard work that has been the hallmark of Nicolas’s leadership in the past 12 months.”
He continued: “My theme for the year – ‘Who do you act for?’ – stems from my belief that trust in financial markets depends on market professionals being transparent as to who they act for: buyer or seller; client or capital provider. I look forward to developing this theme during a year full of challenges, but also one promising opportunity for all.”
A Fellow of the Chartered Insurance Institute, Berry has long been acknowledged as a leading industry expert, speaker and lecturer, educating on a range of topics including the use of credit insurance for banks, broader political violence cover post-9/11 and, more recently, a proper market for “war risks on land”.
On 1st October, Berry gave his first lecture in his capacity as IIL President at Lloyd’s, where he outlined the capabilities and activities of today’s credit and political risk insurance market, and the importance of London market professionals being clear about the interests they seek to serve.
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BPL Global, the leading credit and political risk insurance (CPRI) broker, has today announced the appointment of Gregory King-Underwood as Director and Head of Global Reinsurance and Portfolio Solutions.
A former barrister, King-Underwood moved to Guy Carpenter in 2012 where he latterly headed up the reinsurance broker’s trade credit, political risk, and surety and bond practice. Now based out of BPL Global’s London office, King-Underwood is charged with helping the broker capitalise on the growing synergies between the CPRI and reinsurance markets, as well as to provide portfolio-based cover for efficient risk transfer and better use of capital for both financial institution and corporate clients.
King-Underwood comments: “BPL Global has long stood out to me as the leading broker in the CPRI space. Therefore, I am delighted to not only be given the chance to build an equally strong reinsurance and portfolio solutions platform to add to BPL Global’s current offering, but to also explore the many growth opportunities afforded by the current period of market volatility and the demand for capital relief transactions.”
James Esdaile, Managing Director, BPL Global says: “We are very excited to welcome Gregory to BPL Global. His reinsurance experience will be invaluable in informing our strategy at a time of rising synthetic securitisation in the market, and as we receive an increasing number of enquiries related to the potential use of captives, our client base will also benefit directly from his insights.”
In an exclusive interview with INTO AFRICA, BPL Global Directors, George Bellord and Sam Evans, discuss the impact that the current global political and economic climate is having on the demand for trade credit insurance.
The credit and political risk insurance (CPRI) market is well known for its adaptability and being quick off the mark in order to seize new opportunities. In response to recent demand, insurers are now able to offer cover for non-trade financing, project financing, aviation and real estate. That said, Africa is still seen as an area where the obligors are located – indeed, the continent accounts for over US$9.5billion of exposure in BPL Global’s portfolio.
“The high growth rates of many countries across Africa, such as Ethiopia and the Cote D’Ivoire,” comments Evans, “have meant increased levels of trade, as well as infrastructure projects, ranging from energy to roadway construction.”
As a result, financiers are using credit insurance to leverage their positions in such projects and to mitigate the commercial and political risks that can accompany undertaking business in emerging markets.
“We are living in increasingly uncertain times…businesses are seeking further ways to mitigate increased levels of risk with their trading partners as uncertainty grows,” adds Bellord.
Read the full article here (please turn to page 49).
BPL Global has been awarded the title “Best Trade Credit and Political Risk Insurance Broker” at Global Trade Review’s (GTR) Leaders in Trade awards, and “Best Insurance Broker” in Trade Finance Analytics’ Awards.
This year marks the ninth in a row that BPL Global has been recognised as the leading CPRI broker in GTR’s annual awards, which recognise excellence in the trade, commodity, supply chain and export finance and fintech markets. Meanwhile, it is the first year the Trade Finance Analytics accolade, which assesses a variety of brokers across different classes, has been awarded to BPL Global.
“These two well-respected awards are a fantastic affirmation of the consistency and quality of our service as we help our multinational banking, trading, exporting and corporate clients manage their risk in today’s ever-changing marketplace,” says Sian Aspinall, Managing Director at BPL Global. “We look forward to continue pushing the envelope on what we can offer to our clients and the wider market.”
A full writeup of GTR’s awards can be found here, and the list of winners of Trade Finance Analytics’ awards can be found here.
In Insurance Day’s “Big Interview”, our Managing Directors, Sian Aspinall and James Esdaile, discuss how BPL Global is thriving as an independent, monoline broker despite increasing industry consolidation.
“We think the market has the potential to grow exponentially,” says Sian Aspinall. “We are in a very strong position…by having the right people present in the right hubs.”
