KUKE grows twice as fast as the market
Export and domestic receivables insured by KUKE grew in 2018 twice was fast as the market average. The value of this turnover in KUKE reached PLN 43.5 bn, which means an increase of 20% on an annual basis.
The data published today by the Polish Chamber of Insurance show that the amount of insured turnover of Polish companies on the domestic market increased by 10% in 2018 yoy reaching PLN 505 bn. At the same time, KUKE insured trade receivables worth PLN 43.5 bn. This translates to an increase of 20 per cent on an annual basis. With the much higher dynamics than the average market, the KUKE’s share in the market of trade insurance in Poland increased from 7.9% to 8.6%.
Last year, our business of trade credit insurance developed steadily, both for the domestic and export turnover, reaching an increase of 20% on an annual basis in both segments. We managed to sign almost half as many new contracts as in 2017. At the same time, the number of renewed policies increased by 11% compared to the previous year. This results, among others, from greater openness to risk in those segments of the economy that were characterized by faster growth and offered good prospects for the upcoming quarters, said Tomasz Ślagórski, Vice-President of KUKE.
At the same time, the gross written premium from short-term export and domestic insurance receivables increased in KUKE by 36% compared to 2017, while the market recorded an increase of 11%. As a result, the KUKE’s share in this category increased to almost 10% from 8% at the end of 2017. At the same time, the amount of compensations and benefits paid out in KUKE decreased by 18%, while for the entire market this drop was 8%.
Two thirds of the compensations paid out related to the insolvency of domestic counterparties. As regards international markets, the largest share in claims paid out by KUKE resulted from unpaid amounts due from trade partners of Polish companies from Ireland, Norway, Germany and Italy. At the end of the year, there was a noticeable increase in the risk of non-payment by British contractors, which could have resulted both from the issues faced by some of the local companies in connection with Brexit, as well as the growing level of frauds. Unfortunately, it is still clearly visible that the level of receivables insurance by Polish companies is low compared to, for example, Western European countries, said Tomasz Ślagórski.
Because of the expected weaker pace of economic growth in the country and abroad, KUKE expects an increase in the number of bankruptcies and restructurisations of 11% in 2019. Polish enterprises will experience a lower rate of development of the Euro zone, and for domestic risks, the most significant decline is the drop in the profitability of some entities as a result of the growing operating costs.