Swiss Export Risk Insurance 2015
On April 13, 2016, the Federal Council approved the Swiss Export Risk Insurance (SERV) Annual Report 2015. Following moderate performance in the first three quarters, demand for SERV products rose significantly in the fourth quarter of 2015. Furthermore, the Federal Council increased the framework of obligation from CHF 12 to 14 billion; this determines the volume of transactions on the basis of SERV’s maximum exposure
In the 2015 financial year there was a lack of large transactions in the first few quarters. Compared to the previous year the level of new engagement fell by 28.8 % to CHF 3.179 billion, largely due to a fall in medium- to long-term transactions typical of major projects. The fall in the level of engagement was spread evenly across the sectors of mechanical engineering, power generation and distribution, and chemicals and pharmaceuticals. In the short-term sector, however, new engagements rose by 9.4 % to CHF 2.43 billion thanks to the chemicals and pharmaceuticals industry. In 2015 SERV insured around 867 transactions, a slight increase on the previous year (854). In the fourth quarter SERV recorded significantly higher demand for insurance commitments in principle (ICP) for major exports eligible for cover to Azerbaijan, Australia, Bangladesh, France, Ghana and the USA. Exposure, i.e. engagement plus the sum insured of insurance commitments in principle (ICP), reached a record level at the end of the period at CHF 10.558 billion.
As of the end of 2015, 89 % of the maximum framework of obligation set by the Federal Council amounting to CHF 12 billion had been utilised (previous year’s figure 81 per cent). SERV is currently looking at significant demand for possible new transactions. SERV‘s business is influenced to a great extent by large transactions where trends can be volatile. For large transactions of this nature, which tend to be capital intensive, exporters are dependent on receiving an ICP from SERV in good time before they can even submit a competitive bid. In order to ensure that SERV is able to operate effectively at all times, the Federal Council decided to raise the framework of obligation by CHF 2 billion to CHF 14 billion with immediate effect. In view of the strains in the Swiss export sector it is important for the federal government to shape the framework in such a way that exporters are able to plan effectively.
In 2015 SERV generated a net profit of around CHF 60 million. In 2015 the risk-bearing capacity was further reinforced. After including net income, SERV’s capital as at end of 2015 amounted to CHF 2631 million (previous year CHF 2571 million).
SERV was able to meet the strategic goals set by the Federal Council for the 2011 – 2015 reporting period. It makes a significant contribution to ensuring that Switzerland’s industrial sector is able to prepare successful bids, even in difficult markets and in cases involving complex products with high financing requirements.