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Credit risk insurance at BAEZ
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• What is credit risk insurance?
• The credit risks insurance is a specific
  insurance product
• Essence insurance of receivables under trade
  deals
• on the domestic market
• on the international market

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• INSURANCE OF RECEIVABLES
• (on the domestic and the international market)
• Risks covered
• commercial risks (under domestic and
  international trade deals) risks related to the
  buyer
• protracted default
• insolvency of the buyer
• non-commercial (or political) risks risks
  related to the buyers country
• war, strike, embargo, coup d'etat
• moratorium on payments
• confiscation and nationalization
• changes in the payment regime etc.

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Credit risks insurance scheme
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Stages of the insurance process
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• Why to insure?
• The receivables are an asset, which deserves
  protection
• The insurance is an instrument for a business
  promotion
• competitive advantage
• assessment of buyers
• prevention and monitoring
• financial stability guarantee
• easier access to financing
• The insurance is an instrument for a business
  expansion
• new partners
• new markets
• higher turnover
• The insurance is part of the corporate strategy

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• Main functions of the Credit Risk Insurance
• loss prevention
• current and detailed financial information of
  the buyer
• credit limit recommendation for each buyer
• constant qualified credit control
• loss reduction
• contract dependant on the risk situation of the
  insured
• assistance in overdue debts collection
• payment of insurance indemnification in case the
  previous two did not work out

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• Disadvantages when providing credit terms

• BUYER ADVANTAGES
• receives credit terms
• no need to dispose of proper free funds at the
  moment of the delivery
• SELLER - DISADVANTAGES
• payment insecurity
• the deferred payment engages financial resources
• possible problems with the debt colelction

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• The risk nature is constantly changing
• poor economic situation
• changes in the market conditions
• necessity of expansion
• new clients
• internationalization
• insufficient working capital
• difficulties in the financial sector

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AVERAGE PAYMENT TERMS IN EUROPE Research of
Intrum Justitia in 2013 European Payment Index
2013
Country Private sector Private sector Public sector Public sector
Country Contractual payment (days) Real payment (days) Contractual payment (days) Real payment (days)
Austria 25 35 30 42
Finland 20 25 20 23
France 40 55 40 60
Germany 25 35 25 35
Sweden 30 35 30 32
United Kingdom 25 40 25 40
Portugal 50 85 80 135
Spain 60 85 80 155
Greece 35 55 50 155
Italy 65 95 80 170
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• And not to forget
• Credit risk insurance additional financing
  security
• Option 1 The insurance policy is transferred in
  favour of a third beneficiary
• Option 2 The bank insures the credit

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Option 1 Insurance of receivables in favour of
third beneficiary
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Option 2 Bank credit insurance
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• Who is BAEZ?
• Bulgarian Export Insurance Agency JSC. Is a
  specialized insurance company
• Founded in 1998
• Shareholder 100 Republic of Bulgaria
• (Ministry of economy)
• The Bulgarian analogue of well-known
  international export credit and investment
  insurers
• Aim
• to stimulate and support the Bulgarian exporters
  on the international market
• to protect them from risks
• Other insurance products
• insurance of Bulgarian investments abroad
• L/C insurance
• bank guarantee insurance

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• Why BAEZ?
• created to stimulate and support
• exporters
• SMEs
• priority economic sectors
• solid resources for insurance indemnifications
• undertake higher risks, the profit is not major
  motive

business
credit risks
BAEZ
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You never know...



... Your best partners could be seen on this
slide...
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because even the best professional need a safety
net!
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BULGARIAN EXPORT INSURANCE AGENCY JSC.
The state guarantee for your business

• Sofia 1301, 55 Alexander Stamboliiski Blvd.
• Tel. [phone], fax [phone]
• ?-mail baez_at_baez.bg, www.baez.bg