· Euler Hermes was successfully granted a license from the Financial Supervisory Commission
R.O.C. to issue trade credit insurance and surety bonds in the Taiwan market.
· Euler Hermes opens a branch in Taiwan and is now able to trade under its own license in the market.
· Taiwan is a solid export oriented economy. Corporate insolvencies are expected to continue to grow by +5% in 2018. More importantly, Days Sales Outstanding (DSO) for listed companies is on the rise (increasing from 72 in 2016 to 74 days in 2017).
TAIWAN - 12 JULY 2018 - Euler Hermes, the global leader in trade credit insurance, today announced the launch of its Taiwan branch. Euler Hermes Taiwan is now able to trade under its own license. Euler Hermes is a fully owned company of the German based Allianz SE Group.
Euler Hermes was successfully granted a license from the Financial Supervisory Commission
R.O.C. to issue trade credit insurance and surety bonds in the Taiwan market. Over the last 16 years, Euler Hermes worked with the local partners in Taiwan to provide the products to the market.
Trade credit insurance, also called accounts receivable insurance, is a financial tool that protects a company from its customer’s failure to pay. A business is providing trade credit to its customers, when the business supplies goods or services upfront but agrees to be paid at a later stage. This business can however purchase Euler Hermes’ credit insurance to safeguard against the possibility of default.
Bonding business, also known as “surety bonds” are contractual relationships where Euler Hermes vouches with its good name towards third parties for the business obligation of a contractor. The bond secures that the contractor will fulfil its obligations under the contract. By arranging a facility with Euler Hermes, the companies have the advantage that borrowing facilities and working capital arrangements with banks are not impacted.
“I am glad that the license was finally approved by the local regulator. This is an important milestone for our business in Taiwan. The Taiwanese team has moved into a new office and operates independently,” said Holger Schaefer, Head of Region, Asia Pacific at Euler Hermes. “We have built a solid foundation in Taiwan with steady business and portfolio growth, as well as a strong network of partnerships.”
Taiwan is a solid export oriented economy. GDP growth has been resilient over the past seven years despite a range of global shocks. Economic growth rose by an average +2.2% yearly between 2012 and 2017, compared to a growth of +1.8% yearly for high-income economies over the same period. Supported by a firm demand for exports, pro-innovation policies, and a rise in public infrastructure spending, Euler Hermes expects economic growth to rise by +2.4% on average during 2018-20.
Corporate insolvencies are expected to continue to grow by +5% in 2018. More importantly, Days Sales Outstanding (DSO) for listed companies is on the rise (increasing from 72 in 2016 to 74 days in 2017). This lengthening of DSO and the continued rise of insolvencies call for caution. Euler Hermes provides unique economic forecast and market intelligence to Taiwanese businesses to help anticipate challenges in trading with specific countries, sectors and buyers.
“Taiwan is a growth market. We have confidence in the market and continue to increase our investment in products and infrastructure,” concluded Vincent Kuo, Country Manager, Euler Hermes Taiwan.