1. Working with Banks - Credit Insurance Solutions
April 2017

2. Summary Introduction of Coface Group Coface in Asia Pacific Region
Solutions for the Banks
Annexure - What is Trade Credit Insurance?

3. 1
Introduction of Coface Group

4. Coface at a glance Credit insurance specialist & leader
A global leader for safer trade
A credit insurance specialist
~€ 475bn of capacity2 available for B2B credit
50,000 policies underwriten in 100 countries
Risk coverage in over 200 countries
€ 1,411m revenues in 2016
Of which 89% credit insurance
Of which 11% complementary services
Broad geographical footprint
A solid financial structure and resilient profitability
€ 1,767 m1 in capital in 2015
AA- by Fitch / A2 by Moody’s, standalone IFS
83.1% net combined ratio in 2014
4,200 employees with 70 nationalities represented
Direct presence in 67 countries
Largest footprint vs. top global competitors
A longstanding experienced player
1 Reported total equity (IFRS)
2 Insured receivables (theoretical maximum exposure under the group’s insurance policies) at end-2014
In business since 1946
Strong market awareness of Coface as the historic brand
Renowned macro- & micro-economic expertise /

5. Shareholder structure as of 31st December 2016
Natixis is a corporate and investment arm of “Groupe BPCE”, the second-largest banking group in France.
1 (1) Including shares held in treasury under the Share buyback program, i.e. 0.22% of the capital (of which 152,059 shares from the Liquidity Agreement (0.10%) and 191,951 shares from Own Shares Transactions (0.12%)) /

6. Global solutions, local services
Coface is present directly, or through its partners, in 98 countries, providing support for customers in more than 200 countries.
The Group uses its own international network, which is complemented by the “Coface Partner” network.
Availability of the Coface ˜Group credit-insurance offer worldwide
Direct: Coface has a portfolio of licenses
which allow it to directly issue credit insurance contracts.
Freedom of Services:
Coface issue contracts from another European country where it has a license thanks to the UE principle
of free movement of services
˜˜Offshore: Coface occasionnaly issues contracts from abroad, and according to the conditions of the country concerned.
˜˜Coface Partner : Coface may use an insurer
that has a license in the country concerned, which issues the contract and retrocedes
all or part of the Coface Group's risks, according
to the principle of "fronting". /

7. 2
Coface in Asia Pacific Region

8. Coface in Asia Pacific 121M€ ~400 13 14 ~2,000
Dedicated to long-term partnerships, trust and consistency
121M€
Turnover (2015)
First international credit insurance group to enter Asia Pacific
Leading insurer in Asia Pacific with experience and in-depth knowledge of the local business environment
~400
employees
Experienced underwriting and claims teams with clear high level of delegations supported by solid credit analysts and claims adjusters
89% customer satisfaction based on customer survey report by 3rd party 13
markets of presence 14
markets of services
Regional in-house Economist providing in- depth sector, insolvency and economic analysis
~2,000
policies / 8

9. Long experience in Asia Pacific
2011:
Coface Asia Pacific Region
1995:
1996:
2004:
Coface
Japan
Hong Kong
Australia
 Coface
Singapore
2000:
2001:
2009:
2013:
2015:
 Coface
Coface China
Coface
South Korea
Coface India
Coface Malaysia
Coface Taiwan
Coface Thailand
Vietnam
Indonesia
Philippines / 99

10. Coface‘s Presence in Asia Pacific Region
India ( Mumbai, Bangalore and New Delhi)
China (Shanghai, Beijing)
South Korea (Seoul)
Coface India Credit Management Services Pvt. Ltd
Coface (Shanghai) Information Services Co. Ltd.
Coface Services Korea Co., Ltd.
Thailand (Bangkok)
Hong Kong (Regional Office) – direct license
Hong Kong Branch
Japan ( Tokyo, Osaka) – direct license
Japan Branch
Coface Services (Thailand) Co., Ltd.
Malaysia (Kuala Lumpur)
Singapore - direct license
Taiwan (Taipei) - direct license
Coface Services (M) Sdn Bhd
Singapore Branch
Taiwan Branch
Vietnam (Ho Chi Minh City)
Indonesia (Jakarta)
Australia/NZ (Sydney / Melbourne) - direct license
Australia Branch
Coface Services Vietnam Co Ltd
Coface Indonesia Representative Office / 10

11. Coface Insurance Partners in Asia Pacific Region
India
ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED
IFFCO TOKIO GENERAL INSURANCE COMPANY LIMITED
BHARTI AXA GENERAL INSURANCE COMPANY LIMITED
UNIVERSAL SOMPO GENERAL INSURANCE COMPANY LIMITED
China
PING AN P&C INSURANCE COMPANY OF CHINA, LTD
CHINA TAIPING INSURANCE
SOMPO JAPAN INSURANCE (CHINA)
CO., LTD.
FUBON INSURANCE (CHINA)
LIG INSURANCE
South Korea
SEOUL GUARANTEE INSURANCE COMPANY (SGIC)
KOREA TRADE INSURANCE CORPORATION (KSURE)
Japan
AIOI NISSAY DOWA INSURANCE CO., LTD.
SOMPO JAPAN NIPPONKOA INSURANCE INC.
Hong Kong
SOMPO JAPAN NIPPONKOA INSURANCE (HONG KONG) CO., LTD.
CHINA PING AN INSURANCE (HONG KONG) CO., LTD.
Singapore
TENET SOMPO INSURANCE PTE. LTD.
EQ INSURANCE
Taiwan
FUBON INSURANCE CO., LTD.
SHIN KONG INSURANCE
SOUTH CHINA INSURANCE
Thailand
MUANG THAI INSURANCE PUBLIC
COMPANY LIMITED
AXA INSURANCE PCL
SOMPO JAPAN INSURANCE (THAILAND) CO., LTD.
THE SIAM COMMERCIAL SAMAGGI INSURANCE PUBLIC COMPANY LIMITED
Malaysia
AXA AFFIN GENERAL INSURANCE BHD
BERJAYA SOMPO INSURANCE BHD
MULTI-PURPOSE INSURANS BHD
Indonesia
PT ASURANSI ADIRA DINAMIKA
ASURANSI CENTRAL ASIA
Philippines
PGA SOMPO JAPAN INC
Vietnam
BAO MINH INSURANCE CORP.
UNITED INSURANCE COMPANY OF VIETNAM
PVI INSURANCE / 11

12. Strong local risk underwriting and claims services
S. Korea ● China ● ● ● ●
Japan ● ● ●
Taiwan ● ● ●
India ● ● ●
Hong Kong ● ● ● ●
Thailand ● ● Singapore ● ● ●
Indonesia ●
Risk Underwriting
Claims
Enhanced Information Centre
Debt Collection
Centre
Malaysia
Australia ● ● ● ●
Vietnam / 12

13. 3
Solutions for Banks / Factors
Partnership

14. Why Banks work with Coface
Global risk underwriting, infrastructure and knowledge
Insurance
A booster for the bank’s business
Capital relief /

15. How Trade Credit Insurance is adding value?
For Safer Trade
With its worldwide risk underwriting, infrastructure and knowledge, Coface provides the bank the tool to leverage its business potential
Prevention, risk assessment and risk monitoring
Insurance Coface is putting its
cash at risk
Coface provides the bank with insurance in case anything unexpected happens
Under circumstances the bank will benefit from capital relief under Basel 3 based on our strong and stable financial ratings
Capital relief Basel 3 regulation /

16. Benefits of Credit Insurance to the Bank
What are the benefits for the bank?
Increased revenues:
enhanced ability to finance account receivables (domestic and export)
Increased profitability:
reduction of customer default risk
lower cost of capital (collateral provided by Coface rated AA-)
overview on the quality of customer’s receivable book
Customer retention:
anchor the customer relationship over the long term
Services like buyer assessment & Debt collection /

17. Banks – Two Approaches / 1. Banks as Partner/ Referral Scheme
2. Risk Transfer Products
Client is the Insured
Bank is the insured
Credit Insurance Policy (with or without loss payee to Bank)
Factoring, Distributor Financing, Buyer’s credit, Structured Trade Finance, Single Risk,…
Banking Products offered in all countries either by Coface directly or through our Fronting Partners /

18. 1. Whole turnover trade credit insurance (Bank is loss-payee)

19. Credit Insurance: Loss Payee Structure
Trade Credit Insurance
Coface endorses Bank as Loss Payee
5. Buyer defaults past due
date. Bank notifies Coface
6. Coface indemnifies bank
1. Invoice Discounting/ Bills Discounting
With/ Without recourse purchase agreement
4. Payment to Bank on
due date
Bank
3. Disbursement of funds
against assigned invoices
Supplier
Buyer
2. Sale of goods and/or services /

20. Loss Payee - Different Types
BANKS
Simple Loss Payee
Extended Loss Payee
(without recourse)
Financing Products
Post shipment working capital financing, receivable financing, Bills Discounting, invoice discounting, Export Financing
Purchase of invoice without recourse to the Seller (Factoring)
Financing Process
Trade loans with invoices/receivables as 'security‘ (no purchase of receivables)
The bank’s risk exposure is always on Client (Seller)
Invoice is assigned / transferred to the Bank, asset owned by the Bank BUT with option to sell back to supplier only in event of dispute only
Co-insurance Clauses No
Yes
Bank's Obligations / Rights
Very low
High /

21. 2a. Without recourse Factoring/Receivables purchase program
(Bank is the Insured)

22. Without Recourse Factoring
5. Buyer defaults past due date. Bank notifies Coface
Trade Credit Insurance
1. Without recourse
factoring agreement (Disclosed / Undisclosed)
6. Coface indemnifies bank
4. Payment to Bank on due date
Bank
3. Disbursement of funds against assigned invoices
Supplier
Buyer
2. Sale of goods and/or services / 23

23. 2b. Distributor Financing Insurance
(Bank is the Insured)

24. Distributor / Dealer Financing
The Dealer sends purchase order to their Seller
The Seller delivers goods and invoices the Dealer.
Dealer checks the quantity and quality of the delivered goods.
c. Dealer checks correctness of the invoice
b. Dealer sends his validation to the bank
Supplier
(2) Delivery/ Shipment
(1) Purchase
Order
(3) Disbursement (after validation of invoice)
Credit Buyer Agreement
Bank
PORTFOLIO OF DEALERS
(4) Repayment of Credit
(5)
Indemnification
Dealer presents invoices & related documents to the Bank. The money is disbursed by the Bank directly to the Seller
Dealer pays to the Bank on the due date, as set into Dealer’s Credit Agreement (5)
If Dealer fails to repay (protracted default or insolvency), Coface will indemnify the Bank according to the provisions of the credit insurance policy.
/ 25 25

25. 2c. Structured Credit Insurance Political Risk Insurance (Bank is the Insured)

26. Structured Trade Credit Insurance: what is covered?
1) Trade Finance / Commodity Finance - Credit Risk:
Supplier or Supplier’s bank insures the credit risk of the buyer
Cover non-payment and insolvency risk
Can also cover pre-shipment risk (breach of contract)
2) Project Finance - Credit Risk:
SPV loan repayment, usually based on offtaker’s quality
3) Performance Risk
For advance payment / pre-payment contracts
Buyer or Buyer’s bank insures the risk that the Supplier does not deliver and cannot refund the advance to buyer /

27. Political Risk Insurance (1/2)
Confiscation
Seizure of some or all of a company’s assets by a government.
Situation of being deprived of facilities on decision by a government in the interest of the public good.
Expropriation
Nationalisation
Expropriation pronounced by a legislative body to remove owners or companies with transfer of their management authority to bodies representing the government and assignment of their assets to the State.
Deprivation
Prevents the owner from the use of its assets by host government. /

28. Political Risk Insurance (2/2)
Inconvertibility – Non Transfer
Inability of the Insured to convert local currency into policy currency and to transfer such monies outside of the country
Covers payment of invoices, dividend or capital repatriation and / or cross-border loan repayments
Political Violence
Covers damage to physical assets (ie commodity inventories or industrial assets)
Caused by war, civil war, general strikes, riots, etc… /

29. Annexure
What is Trade Credit Insurance?

30. Trade Credit Insurance
Basics of Trade Credit Insurance
Prevention Recovery
Insurance
Trade Credit Insurance
Prevention
– Of the inability of customers to meet their financial obligation
Recovery
– Recovery of unpaid invoices/debts
Insurance
– Indemnification of up to 90% of invoices /

31. Credit Insurance Flow / 6. Upon investigation, Insurer honors claims
Sign Trade Credit Insurance policy
Assessment on buyers’
credit worthiness
Grant buyer credit limit
Set credit period
COFACE
5. Buyer defaults on invoice past due date. Supplier
notifies Insurer
4. Acceptance of goods delivered and Payment to
Supplier on due date
3. Delivery of goods and invoices
Supplier/ Policy holder
Buyer
2. Sales contract
(open
account terms) /

32. Trade Credit insurance: Management of trade risk
Risks linked to you either :
or Environment it operates in (Political) covered
The Counterparty (Commercial)
covered
Insolvency
Protracted Default
Government Moratorium
Non Transfer of Risks
Cancellation of Import License
Occurrence of War, Revolution
not covered
not covered
Non Acceptance Of Goods
Trade Dispute
Devaluation or Depreciation
of Currencies /

33. Credit Insurance & Risk Management – comprehensive solution
Collection and mass processing of information
Risk monitoring
Analysis and rating of credit risk:
‘Debtor
Risk Assessment’ according to a single scale
Exchanges
with the customer
Risk underwriting i.e. decision of risk exposure /

34. Main Exclusions / Genuine trade disputes
Sale to subsidiary & associates
Sales made against irrevocable confirmed letters of credit
Sales against advance payments
Sales to individuals or for non-commercial use
Pre-shipment risk
Consequential losses & Interest on late payment
Loss in excess of Credit Limits
Nuclear Risk
Loss due to Foreign currency fluctuations
A war between two or more of the following countries: France, China, Russia, the U.K and the
U.S.A. /

35. Product Features / Insured Percentage Premium Rate Minimum Premium
Maximum Liability
Maximum Credit Period
Time Limit for Notification of Overdue Accounts
Maximum Invoicing Period
Maximum Transfer Period
Claims Waiting Period
Declaration
Up to 90%
On turnover / on Outstanding / on Credit Limits % of Estimated Premium
Multiplier of Premium Paid / Fixed Amount 180 days (including credit extensions) 210 days
10 days, starting from the delivery date 30 days, starting from the Invoice date
Insolvency : 30 days / Non-Payment : 5 months
Reporting period : Monthly / Installment : Monthly /

36. Pricing parameters / Pricing based on 5 factors: (Seller/ Buyer)
 Insurable Turnover (higher the insurable t/o, lower the rate)
 Industry (some industries being riskier than others)
 Countries (latest country risk profile on )
 Credit Period
 Past trade losses
(Seller/ Buyer) /

37. Key Obligations of policy holder
Be realistic in your prediction of estimated insurable turnover
Be realistic in your limit requests on your debtors
Pay the premium on time
Apply for credit limits for buyers on time (once policy is issued)
Provide turnover declarations on time
Report adverse information or a CLAIM on time /

38. What are the benefits of trade credit insurance?
Financial risk management tool
Protect Business Transactions
Secure Business
Growth
Framework to improve credit control effectiveness
Expand sales securely in new markets
Protect the balance sheet against bad debts (up to 90% recovery)
Provide detailed information on potential new buyers
Independent and objective risk assessment of customers
Trade Receivables account on average for 35% of corporate total assets (25% of companies collapse because of bad debts) and without Trade Credit Insurance, receivables are not covered
Offer more competitive payment terms to secure sales
Constant monitoring of customers’ creditworthiness
Possible higher level of funding at a better rate, using Trade Receivables
Efficient debt recovery services /

39. Credit Insurance Timeline
5.Notification of overdue account
7. Indemnification
1. Delivery
2. Invoice
6. Claim
summary
3.Initial due date
4.Extended due date
Maximum Invoicing Period
10 days
Maximum Invoicing Period
30 days
claim
waiting period:
5 months from the Notification of Overdue Account
initial credit period: 90 days
initial credit period: 60 days
extension: 90 days
extension: 60 days
time limit for Notification of overdue account:
30 days from
extended due date
Payment Process 30 days
Payment Process 30 days
time limit for
claim
waiting period:
5 months from the Notification of Overdue Account
Notification of overdue
account: 30 days from
extended due date
maximum credit period set in the policy days
maximum credit period set in the policy days
All shipments covered
Stop new shipments
Stop new shipments /

40. Claims – Assessment of cover
WHAT ARE THE STEPS INVOLVED?
To check that the Notification of overdue is in compliance with the terms of the policy.
To ensure that insured submit all relevant Documents.
To liaise with Insured if further information or clarification required.
Has the intervention fee been paid?
MAJOR REASONS FOR REJECTION OF CLAIM
Breach of MCP/Late Notification
Dispute as the reason for non-payment
No prior approval from Coface with regards to the repayment plan
Outstanding fee and premium payment
Insufficient supporting documents /