Claims soar from R182m to R532m

The trade debt insurer, Credit Guarantee Insurance Corporation (CGIC), says it has weathered the storm of what it describes as the most up-and-down period in its existence. Commenting on its results for the financial year ended December 31, 2009, MD Mike Truter said: “The past eighteen months have been the most volatile period in the 54-year history of Credit Guarantee.” Defaulting SA debtor companies accounted for the majority of the commercial claims in 2009 – which soared from R182-million in 2008 to over R532-m. The largest of these was an amount of R60-m on the failure of an unnamed buying group in the household goods sector. “Substantial export claims were also paid on defaulting importers elsewhere in the world,” Truter added, “the biggest being in respect of a transaction with a steel importer in the USA which resulted in Credit Guarantee paying an indemnity of over R40-m.” He added that it was clear that many of the company’s clients would not have survived the recession had they not insured their trade debt risk against non- payment. “But,” he told FTW, “despite the prevailing economic cycle, we still paid ‘no-claim’ bonuses exceeding R55.1-m to clients on the domestic front and R13.5-m to export clients, indicating that it was not all ‘Armageddon’.”