annual report - CESCE England

Transcription

20
15
ANNUAL
REPORT
PROFILE OF CESCE
LETTER FROM THE SECRETARY OF STATE FOR TRADE
BUSINESS LINES
CESCE IN 2015
CORPORATE RESPONSIBILITY
1 PROFILE OF CESCE
2 LETTER FROM THE SECRETARY OF STATE FOR TRADE
4
10
3 BUSINESS LINES
14
3.1 CREDIT INSURANCE AND SOLUTIONS, CONSULTANCY AND SURETIES 15
3.1.1 Business model
3.1.2 Commercial range of credit insurance and solutions and consultancy services
3.1.3 Sureties
3.2 SPANISH EXPORT CREDIT AGENCY (ECA)
CONTENTS
3.2.1 Return to normality
3.2.2 The many faces of CESCE’s activities
3.3 INFORMACIÓN Y SERVICIOS
4 CESCE IN 2015
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32
35
43
48
4.1 ECONOMIC CLIMATE
4.2 PERFORMANCE IN 2015
4.2.1 Credit insurance and solutions, consultancy and sureties
4.2.2 Spanish Export Credit Agency (ECA)
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16
25
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ANNUAL REPORT 2015
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57
58
62
PROFILE OF CESCE
BUSINESS LINES
CESCE IN 2015
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5 CORPORATE RESPONSIBILITY
5.1 CESCE, A RESPONSIBLE COMPANY
71
5.2 COMMITMENT TO ITS STAKEHOLDERS
74
74
82
5.2.1 Employees
5.2.2 Customers
5.2.3 Suppliers
85
86
5.2.4 Community
5.3 COMMITMENT TO THE ENVIRONMENT
5.3.1 Environmental quality in CESCE
5.3.2 The environment in projects on behalf of the State
5.4 COMMITMENT TO GOOD GOVERNANCE
87
87
89
93
93
96
97
100
103
5.4.1 Governing bodies
5.4.2 Ethical framework
5.4.3 Risk management
5.4.4 Senior Management Team
5.4.5 Board of Directors
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ANNUAL REPORT 2015
PROFILE OF CESCE
PROFILE
BUSINESS LINES
CESCE IN 2015
1
Profile of CESCE
CESCE heads a group of companies offering
comprehensive trade credit management
solutions in Europe and Latin America. CESCE
is also the Spanish Export Credit Agency
(ECA) responsible for managing Export Credit
Insurance on behalf of the Spanish State.
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ANNUAL REPORT 2015
PROFILE OF CESCE
PROFILE
BUSINESS LINES
CESCE IN 2015
M
MISSION
To facilitate the robust growth of our
customers over the long term by
providing them with smart solutions
for managing commercial credit
encompassing the whole value chain
of the business (market prospecting,
management and coverage of risk,
and access to financing), and with
consultancy, surety and guarantee
solutions enabling them to tackle
new projects and accept new
businesses.
To comply with our public obligation as
managers of Export Credit Insurance on
behalf of the State in a way which is
technically rigorous and professional,
which strictly complies with applicable
legislation, and which is completely
focused on support for Spanish
companies’ internationalisation activities.
V
VISION
We would like to
consolidate our position
as the institution providing
the best support to
companies selling on
credit to other companies
by designing innovative
solutions which will
always give us the edge
over our competitors
conceptually and
technologically. We would
also like to become the
benchmark in the market
for our quality of service,
for the professional and
personal development
opportunities we offer our
employees, and for our
commitment to society.
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ANNUAL REPORT 2015
VA
VALUES
Innovation
Support for
economic activity and
internationalisation
Commitment
to our costumers
Ethical and responsible
conduct
Commitment to
people
PROFILE OF CESCE
PROFILE
BUSINESS LINES
CESCE IN 2015
10 countries
Presence in
in Europe and Latin America
1
2
7
6
9
8
1.
2.
3.
4.
CESCE
CESCE France
CESCE Portugal
CESCE Argentina
CESCE Brazil
5.
6.
7.
8.
9.
CESCE Chile
SEGUROEXPO Colombia
CESCEMEX Mexico
SECREX-CESCE Peru
LA MUNDIAL Venezuela
More than
4
5
3
Most influential
financial and insurance
company in the
140,000 customers
social
1.1
million
media
credit limits in force
1,463
24
125
agents
employees
sales
offices
th
4
nd
2
3
million
online users
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ANNUAL REPORT 2015
group worldwide
in Spain
IN CREDIT
AND SURETIES
PROFILE OF CESCE
PROFILE
BUSINESS LINES
CESCE IN 2015
Structure
Credit insurance and solutions,
consultancy and sureties
Spanish Export
Credit Agency (ECA)
Information
and services
Comprehensive services to help
companies grow in every phase of
the business cycle
Management on behalf of the Spanish State
of coverage of the commercial, political
and extraordinary risks related to the
internationalisation of Spanish companies.
Commercial, financial and marketing
information on companies and
entrepreneurs.
Spain
Argentina
Portugal
Brazil
France
Chile
Comprehensive credit management
services, technological solutions and
business process outsourcing.
Informa D&B
CTI
DBK Informa
Experian
Colombia
Logalty
Mexico
Spain
Peru
Portugal
Venezuela
Colombia
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ANNUAL REPORT 2015
1970
Launch of insurance activities
on CESCE’s own behalf and
creation of Informa D&B.
Cronología
Acquisition of the Dun &
Bradstreet business in Spain
and Portugal by Informa.
Shareholder
structure
1992
2000
BY PERCENTAGE
Spanish
State
50.25%
Grupo
Santander
2011
Grupo
BBVA
New regulatory framework
for the management of the
State Account.
Other Banks
12.375% and Insurance
Companies
Launch of CESCE MASTER
ORO: comprehensive
management of
commercial risk.
2012
2013
16.3%
CESCE Avanza:
redefinition of processes
and improvement of
productivity and quality
of customer service.
2008
21.075%
Departure from the
whole-turnover principle: Pay
Per Cover - a new way of
understanding credit insurance
for CESCE’s customers.
Creation of Consorcio
Internacional de
Aseguradores de Crédito
S.A (CIAC).
2004
2005
New business model based
on customer focus and
variable prices.
Foundation
of CESCE.
Operational and
commercial
integration at a
global level.
2014
Transformation of Pay Per Cover into a
more flexible product enabling the
customer to decide which debtors to
monitor
2015
Birth of the CESCE Consulting unit to
offer consultancy services
Standard & Poor's raises CESCE’s rating
to BBB+ with a stable outlook
CESCE, member of the UN Global
Compact
Launch of a new corporate website
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ANNUAL REPORT 2015
PROFILE OF CESCE
BUSINESS LINES
CESCE IN 2015
Financial indicators
55.8
50.4
39.2
34.6*
AS A PERCENTAGE
AND IN MILLIONS OF €
25.7
20.7*
Technical
results
Pre-tax
results
IN MILLIONS OF €
IN MILLIONS OF €
2013 2014 2015
373.1*
Insurance issued
399.4
Insurance issued
on own behalf
91%
€25,452.3 M
2013 2014 2015
75.6%
410.9
59%*
28%
Net
equity
Claims
rate
IN MILLIONS OF €
AS A PERCENTAJE
2013 2014 2015
9%
2013 2014 2015
(*) The 2013 financial statements have been revised to incorporate mandatory amendments relating to the change of accounting
criteria implemented in 2014 for the calculation of the technical provisions for risk management on behalf of the State.
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ANNUAL REPORT 2015
€2,641.4 M
Insurance issued
on behalf of the State
PROFILE OF CESCE
LETTERFROM
FROMTHE
THESECRETARY
SECRETARYOF
OFSTATE
STATE FOR
FOR TRADE
TRADE
LETTER
BUSINESS LINES
CESCE IN 2015
Letter from the
Secretary of State
for Trade
2
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ANNUAL REPORT 2015
PROFILE OF CESCE
LETTERFROM
FROMTHE
THESECRETARY
SECRETARYOF
OFSTATE
STATE FOR
FOR TRADE
TRADE
LETTER
BUSINESS LINES
CESCE IN 2015
CESCE closed the financial year with profits of
€30.9 million in the context of economic recovery in
the Eurozone and fierce competition
Dear Friends,
As Secretary of State for Trade and current Chairman of CESCE Board of
Directors meetings, it is my pleasure to present to you this Annual Report
providing an account of the company’s financial growth and its progress
on Corporate Social Responsibility in 2015. Allow me to summarise our
main activities below.
During the financial year we completed the segregation of the company’s
public and private activities, strengthening CESCE’s work as a Spanish Export
Credit Agency (ECA) and making its private activity as an insurer, guarantor and provider of credit solutions and consultancy services more independent, while ensuring its information and business services subsidiaries
operate with greater autonomy.
CESCE has fully adapted to the new legislation on State coverage approved
in 2014, giving a new boost to activity on behalf of the State and enabling
new markets to be opened up. Among other measures, the new legal framework has ensured the long-term sustainability of the instrument, with
the creation and consolidation of a Reserve Fund and a new State Account
Risks Committee, which has now held more than 100 meetings.
As a private insurer, CESCE has extended the range of commercial addedvalue services it offers through the provision of consultancy services. It has
also perfected the range of CESCE MASTER ORO solutions it offers (Full
Cover and Pay Per Cover), making the Risk Management service more
11
flexible: now the customer may decide in real time which suppliers it wishes
to monitor and which default risks it then wishes to cover. This has been
a commercial success, an increase of 8% being recorded in 2015 in the
number of customers of the company.
Within the information and services area, Informa D&B has absorbed its
subsidiary DBK, becoming a leader in the supply of sector information.
It has also launched its new marketing marketplace and has created the
Individuals’ Non-Payments Report, with access to the InfoDeuda Defaulters’
List. In turn, the subsidiary CTI has retained its business model based on
Business Process Outsourcing (BPO).
In the sphere of Corporate Social Responsibility, CESCE has furthered its
commitment to the 10 principles of the Global Compact by changing its
status from signatory to member of this international initiative. Being a
member enables us to get more actively involved in achieving the objectives
of the Global Compact, the ultimate end of which is to promote ethical
business management.
A profitable year
CESCE closed the financial year with profits of €30.9 million in the context of economic recovery in the Eurozone and fierce competition in
the sector.
ANNUAL REPORT 2015
PROFILE OF CESCE
LETTERFROM
FROMTHE
THESECRETARY
SECRETARYOF
OFSTATE
STATE FOR
FOR TRADE
TRADE
LETTER
BUSINESS LINES
CESCE IN 2015
In 2015 the new contracts figure related to CESCE’s
activity as a manager of internationalisation risks on
behalf of the State was outstanding
Examples of the companies’ fine performance include the combined direct
insurance ratio, which at 83% remained for the sixth year running below the
95% target threshold, the frequent claims ratio, which fell to 28%, and the
growth of the number of current policies by 8.6%, thanks to maintaining
CESCE’s sales efforts.
The development of risk prediction models and tools also enabled CESCE
to strengthen its financial solvency: on 31 December, CESCE’s net equity
was €410.9 million compared to €399.4 million the previous year, and its
surplus cover was €331.2 million, 132% of the total technical provisions.
With these parameters, CESCE has once again demonstrated the solidity of
its business model based on intensive use of information and data analysis,
a model which does not see customers solely as potential victims of risks
but rather as drivers of the economy and employment, CESCE’s job being
to protect these customers against possible default situations and help
them to grow.
In 2015 its customer service vocation led the company to create CESCE
Consulting, which offers companies tailored consultancy services providing
tools and methods to ensure business processes are consistent with risk
management systems.
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CESCE’s consultancy services supplement all the other solutions and services designed for the CESCE MASTER ORO customer. This formula, the
most innovative and comprehensive on the market, became even more
flexible in 2015, mentoring the entrepreneur throughout all the phases of
the business cycle: seeking and monitoring customers, covering commercial risk, and financing.
Beyond the mere satisfaction of all the customer’s business needs, CESCE
is still working to create positive experiences of its different channels (the
sales network, telephone helplines and the online CESNET platform) and
has launched a new cutting-edge corporate website which is easy to
use on all devices. It also continues to offer its support to entrepreneurs
through the delivery of various training activities, the publishing of reports,
the development of its “SME Advisors” blog and intense dialogue in the
social networks. SMEs have always been a priority for CESCE, as proven
by its various activities both on behalf of the State and on its own behalf.
Activity on behalf of the State
2015 saw a boost to CESCE’s activity as a manager of internationalisation risks
on behalf of the State. The vitality of international trade (which has played a
leading role in Spain’s economic recovery over recent years) made itself felt
in the new contracts figure, which recovered from the fall recorded during
the emergence from the crisis. That achievement was successfully combined
with CESCE’s difficult twin role as provider of free market services and last
resort insurer on the one hand, and guarantor of the instrument’s financial
equilibrium on the other.
Based on individual transactions, insurance issued amounted to €2.167 billion
in 2015, a very much higher figure than the average new contracts figure
recorded in the first decade of the century, which was around €1.6 billion.
However, the total number of insured transactions on behalf of the State
fell, due to the total segregation of CESCE’s activities for its own account
ANNUAL REPORT 2015
PROFILE OF CESCE
LETTERFROM
FROMTHE
THESECRETARY
SECRETARYOF
OFSTATE
STATE FOR
FOR TRADE
TRADE
LETTER
BUSINESS LINES
CESCE IN 2015
from those on behalf of the State. Hence in 2015, the whole-turnover modalities in which the State had assumed the political or extraordinary risks and
the company retained the commercial risks, now became fully covered by
CESCE for its own account.
Especially important was CESCE’s activity guaranteeing respect for the
environment in the projects it insures on behalf of the State, given that
the coverage of these projects is dependent on a positive environmental
impact assessment.
The most outstanding transaction of the financial year was the provision
of financing for the STAR refinery in Turkey. This is another example of the
essential role CESCE plays in financing the execution of large international
engineering projects.
We expect great challenges in the future, both to our activity as a Managing
Agent of risks on behalf of the State and to our activity as an insurer on our
own behalf. We believe in continuing to pursue profitable growth in both
branches of activity thanks to the strategic focus of the senior management, the loyal contribution of our suppliers and the efforts of each and
every one of the employees comprising our organisation. Thank you to
everyone for their work.
It is also worth stressing the role played by CESCE in the international sphere.
In 2015, a CESCE representative began to chair the Medium and Long Term
Committee of the Berne Union, an organisation comprising the main global
export and investment credit insurers.
Over the coming years, we aim to keep improving the instrument so it can
continue promoting the internationalisation of Spanish companies. With this
in mind, in 2015 we began to review and remodel our products’ general
conditions with the help of our main users, whom I would like to publicly
thank for the support provided.
To conclude, I would like to express my most sincere thanks to Mr. Álvaro
Bustamante de la Mora, who has devoted more than two decades of his life
to the company, the last four years as Chairman. Under his management
we have achieved historic levels of profitability and growth.
Yours faithfully,
CESCE, a member of the Global Compact
We took an important step in the sphere of Corporate Social Responsibility
by becoming a member of the UN Global Compact. By doing so we not
only reiterated our commitment to its 10 principles on human rights, work,
the environment and anti-corruption, we also strengthened our support
for those universal ethical values.
During 2015, we strove to balance our business targets with the expectations of our customers and suppliers as well as the wider community, and
in our workplaces we strengthened our commitment to the conservation
of the environment.
13
Jaime García-Legaz Ponce
Secretary of State for Trade
ANNUAL REPORT 2015
PROFILE OF CESCE
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LINES
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3
Business lines
3.1 Credit insurance and solutions,
consultancy and sureties
15
3.1.1 Business model
3.1.2 Commercial range of credit insurance
and solutions and consultancy services
16
25
3.1.3 Sureties
31
3.2 Spanish Export Credit Agency (ECA)
3.2.1 Return to normality
3.2.2 The many faces of CESCE’s activities
3.3 Information and services
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ANNUAL REPORT 2015
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35
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PROFILE OF CESCE
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LINES
BUSINESS
CESCE IN 2015
Credit
insurance
and solutions,
consultancy
and sureties
Principles of the
commercial proposal
3.1
CESCE provides companies integrated
commercial insurance, surety and
consultancy solutions to support their
growth in all phases of the business
cycle: market prospecting, risk
management and coverage, access
to funding, and consultancy. This
comprehensive customer-focused value
proposal is based on intensive use of
information, data analysis and the use of
technological tools in decision-making.
central element of risk is the
1 The
debtor not the customer
The basic unit of the risk is not the insured, but rather the
insured’s debtor. Hence CESCE analyses the risk of each
debtor and helps its customers to retain the best and protect
themselves against the worst.
2
Variable prices and coverage
CESCE is the only company in the market offering a different price
for each type of debtor, on the basis that each debtor’s payment
performance is very different.
The customer is not required to insure its entire debtor portfolio, it
only has to decide the level of coverage it wants to take out at any
given moment.
3 Credit insurance does
not depend on the cycle
Prices are set on the basis of the future estimated cost of claims
using prediction mechanisms, regardless of the results of previous
financial years.
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ANNUAL REPORT 2015
PROFILE OF CESCE
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LINES
BUSINESS
CESCE IN 2015
Axes of the
business model
3.1.1. Business model
CESCE has an innovative business model based on a strategic commitment to knowledge and a sustained investment in technology, enabling
it to offer comprehensive protection to companies in all phases of their
commercial activity.
Customer focus
Through intensive use of information and data analysis, it helps companies
to select and monitor customers, advises them on how to cover transactions, and offers them funding formulae to reduce the effect of default on
their liquidity.
Technological leadership
This comprehensive value proposal is based on the premise that it is the
customer’s debtor rather than the customer who is responsible for any
claims. Therefore, CESCE focuses its activity on shielding companies against
bad customers and helping them find and keep good customers.
Operational excellence
Based on this logic, CESCE sets different prices depending on the payment
history of each of its customer’s debtors. It is the only company in the market
that offers the opportunity to cover only the transactions deemed most critical,
without the need to cover the entire portfolio.
International outlook
Premiums are set on the basis of the estimated future cost of claims regardless
of the results of previous financial years, and risks are underwritten based on
the predicted performance of default indicators. This unique predictive model
reduces claims and provides the necessary financial stability to resist adverse
economic cycles.
Financial solidity
.
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ANNUAL REPORT 2015
PROFILE OF CESCE
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LINES
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CESCE IN 2015
Thanks to CESCE’s multi-channel strategy, the
customer may begin a transaction in one
channel and finish it in another
Customer focus
Over 140,000 customers worldwide rely on CESCE and its subsidiaries.
To help them with their main business processes (seeking and monitoring customers, globalisation and finance) and to protect them against default, each year the company invests in new technologies.
Analytic knowledge to satisfy the customer
Empathy with its customers is based on analytic knowledge. Since 2013
CESCE has had a Customer Relationship Management (CRM) tool to enable
it to offer the right service or solution to any customer at any time.
Thanks to its analytic capabilities, CESCE records information on the customer and defines specific action guidelines based on their needs regarding the significance a specific situation has for that customer and the
customer‘s level of satisfaction with the company.
Hence it is able to attract better customers and to retain those customers
more inclined to buy.
All areas of the company focus on customer management. The Marketing Department is responsible for coordinating and aligning the customer
management projects of the areas involved, both projects linked to the
business and transversal projects.
Based on the idea that customer loyalty is intimately related to the number
and quality of interactions, the company has doubled its efforts to establish lines of communication through various channels in a consistent and
coordinated manner.
Positive and distinctive experiences overall
Hence CESCE has adopted a multi-channel strategy: the customer can
expect the same experience regardless of the medium used and may begin
a transaction in one channel and finish it in another.
To create a positive experience for users and establishing relationships
ensuring they will remain, the Company designed its own Customer Experience strategy to guarantee customers a positive and distinctive experience
overall beyond the mere satisfaction of their needs, a strategy which was
bolstered in 2015.
To ensure the customer has a positive and integrated experience, CESCE
has created different channels based on unique customer insight and has
adapted them to the various devices and contexts in which they may be
used, making them easier to navigate thanks to the measurement and
evaluation of contacts.
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ANNUAL REPORT 2015
PROFILE OF CESCE
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The same value proposal
in different channels
CESCE has three different means of delivering its value proposal to customers: the sales network, telephone helplines and the CESNET digital
platform.
•
Sales network
The sales network consists of 24 branches and 125 sales agents working across
Europe and Latin America.
Those agents play a fundamental role in the creation of positive experiences
for the customers given that they possess all the information recorded in the
CRM tool and can thus anticipate customers’ needs, offering them solutions
and services consistent with their circumstances and priorities.
The close bonds sales managers maintain with their customers enable
them to talk up the positive significant actions performed by CESCE and
play down the effect of any actions which may have spoilt customers’
experience. The result is improved customer satisfaction and increased
customer loyalty.
•
Telephone helplines
CESCE’s Customer Service Centre (CSC) provides it with the necessary
flexibility to respond to customer needs. A properly-trained, front-line
service team redirects calls to a group of experts in each business area in
highly complex cases.
The company also has a continuous customer voice active listening
programme, providing holistic insight into the customer and enabling it to
improve its service.
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ANNUAL REPORT 2015
PROFILE OF CESCE
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LINES
BUSINESS
CESCE IN 2015
The CESNET operating platform channels more
than 95% of business transactions
During 2015, the Customer Service Centre in Europe and Latin America resolved
105,000 queries at a high level of quality and efficiency: 95% of calls were
answered in less than 30 seconds, 95% of requests were resolved within 24
hours and the complaints rate was only 0.2%.
Internet: CESNET
The CESNET operating platform channels more than 95% of business transactions. Customers may use this platform to manage risk, monitor their
policies, report sales, extensions and defaults to the company, and perform other functions. They also have the opportunity to access a service
monitoring the performance of their customer portfolios, which provides
immediate warnings of any modification of their risks.
Customers may configure the platform to receive warnings on any device
or ensure the system automatically applies their policies. Customer may
also transfer all the information they need to manage their risks to their
own computer.
Customers may access CESNET through the corporate website www.cesce.
com, which in 2015 was re-designed to bring it up to date, to make it easier to
use and to adapt it for use on all devices. Each country’s corporate websites
can also be browsed from the new website.
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ANNUAL REPORT 2015
PROFILE OF CESCE
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LINES
BUSINESS
CESCE IN 2015
The digital strategy is based on intensive use of data
and its transformation into the knowledge
required to offer a significant experience
Technological
leadership
CESCE defines itself as intelligence applied to commercial risk management. Technology is the element facilitating its strategy, and its analytic
capability to convert data into knowledge is at the heart of the key business
processes: coverage of risks and management of services.
Since 2008, when CESCE decided to reinvent itself and commit itself to
innovation in order to meet its customers’ needs, the company has focused its investment on the implementation and use of digital capabilities. In
2015, CESCE invested €7 million in R&D&i.
The digital strategy is based on intensive use of data and its transformation
into the knowledge required to offer a significant experience to our customers. CESCE’s strategy has three axes:
1.To turn the analytic knowledge of the customers into a strategic asset.
2.To facilitate access, provide conviction and encourage collaboration between our customers and CESCE.
3.To apply knowledge and transform our operating and business model to
provide a high-quality response to our customers.
Based on these premises, not only are the company’s basic processes
and activities automated end-to-end, but they are designed to incorporate
analytic capabilities.
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The information is integrated throughout the value chain via an automated
connection permitting the real-time processing of millions of pieces of data
on hundreds of companies contained in numerous information sources
through the application of statistical algorithms. That makes it possible
to predict default risks and control claims as well as detect “moments of
truth” relating to our customers based on their specific profile, in order to
trigger tailored actions.
This system is fed by different sources: data provided by the customers;
information on sectors and countries prepared by the team of analysts; and
sophisticated prediction models and databases from CESCE’s subsidiary
Informa D&B providing information on over 240 million companies from
more than 200 countries worldwide.
For many years now, CESCE has been committed to opening new lines
of communication with its customers, including the social networks to
which not only CESCE actively listens, but on which it has its own voice,
being positioned as one of the most highly-rated influencers in the different
available rankings (as demonstrated by its Klout Score of 80).
In order to tackle the challenges of global integration and the enrichment
of its innovation ecosystem, CESCE has entered into strategic alliances
ANNUAL REPORT 2015
PROFILE OF CESCE
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LINES
BUSINESS
CESCE IN 2015
The Innovation Observatory dedicated its efforts
to several areas of interest: knowledge about the
customer via big data and block chain technology
Spending
on R&D&i
IN MILLIONS OF EUROS
8
7.00
6.84
with market leaders such as IBM, Google and Salesforce. Leverage of
technological provisioning in the cloud represents a significant savings in
operational and investment costs, as it provides cutting-edge technology
under the pay-per-use formula, and permits CESCE to create a flexible
technological architecture by exploiting the elasticity of cloud provisioning
and open standards.
7
6
4.56
These companies provide the company with the necessary technology to
be able to implement new innovation projects flexibly and economically
and offer comprehensive multi-sector technological insight.
3.61
5
4
3.34
3
2.46
Innovation Observatory
2
One result of the agreement with IBM is the birth of the Innovation Observatory which, among the other functions it performs, continuously analyses
the application of digital capabilities to CESCE’s strategy.
1
0
In 2015, the Innovation Observatory dedicated its efforts to several areas
of interest to CESCE’s strategy: “big data” applied to obtain additional information on the performance of companies; block chain technology; and
the use of the latter in trade.
21
2010 2011
ANNUAL REPORT 2015
2012 2013 2014 2015
PROFILE OF CESCE
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CESCE IN 2015
Operational
excellence
In 2015, 90% of all decisions on coverage
and more than 85% on claims payments
were assessed automatically
The company is equipped with a global and digital operational system
based on the intensive use of information technology which permits
business scalability.
In order to optimise processes and control costs in a changing digital
environment, in 2015 the company kept perfecting its key processes:
risk coverage and claims handling. Both processes are modelled and
automated.
Within the risk coverage process, the company continued to make progress on automated decision-making, without the need to resort to the
analyst. The system processes thousands of pieces of information each
day and provides a real-time response in almost all cases. Hence in 2015
90% of coverage decisions were taken automatically.
The granting of benefits in case of default is also performed in an automated and modelled form. Each case is analysed using CESCE’s own
algorithms, which determines if the company is due compensation or
not. This process benefits both CESCE and its customers: the company
improves its efficiency and reduces its costs while the customers see
indemnities being paid more quickly. More than 85% of claims payments
were assessed automatically in real time during 2015.
Digitalisation of “front office” services
The insurer has also developed several initiatives designed to digitalise
“front office” services, such as digital marketing (360º customer vision,
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social and mobile marketing), customer experience (design of the customer experience, behavioural patterns, application of strategies), and
distribution and sales channels (agent mobility, social media channels,
innovation in products and services).
A globally-integrated
company
In 2015 CESCE continued with the process of implementing a global
operational model both for the parent company and its international
subsidiaries, using the same management platform and the same nomenclature for different business segments.
The majority of its critical processes (risks, after-sales, recoveries, reinsurance, etc.) are integrated, exploiting the capabilities and resources
CESCE possesses in Europe and Latin America to provide a service to its
customers in whatever part of the world they are located.
We can now say that CESCE is already a globally integrated company.
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International
outlook
CESCE operates in ten European and Latin American countries.
Its head office is in Spain, it has branches in France and Portugal,
and has subsidiaries in the main Latin American markets: Argentina,
Brazil, Chile, Colombia, Mexico, Peru and Venezuela.
CESCE’s presence in Latin America is channelled via the International Consortium of Credit Insurers (CIAC). The stakeholders in this joint venture
are CESCE (63.12%), the insurance company Münchener Rück (15.04%),
and the banks BBVA (10.92%) and Santander (10.92%).
All customers may access the same credit solutions and services
thanks to the establishment of a global operating model. Hence Latin
America has now had access to CESCE MASTER ORO and CESCE
Classic since 2014.
Consolidation in Latin America
The growing demand for credit makes it likely that CESCE will consolidate
its leading position in Latin America, where it is one of the main players.
The provision of solutions for financial institutions, a market niche in which
CESCE stands out far from its competitors, continued to strengthen in the
financial year 2015.
In the guarantees business (sureties, bonding and performance guarantees),
CESCE continued enhancing its commercial activity to remain one of the
companies present in all the main Latin American markets.
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In 2015, Standard & Poor’s raised the company’s
long-term solvency rating from BBB to BBB+
with a stable outlook
Financial
solidity
Every year CESCE’s analytical capacity to predict risks enables it to return
a significant surplus in its solvency margin (i.e. the resources it possesses
to meet potential claims). At the end of 2015 there was a solvency margin
surplus of €270 million, representing 14.7 times its minimum amount of €18.3
million.
In recent years the company has made significant progress on the control,
monitoring and measurement of risks in order to meet the standards set by
the European Union in the Solvency II Directive and the Delegated Regulation
supplementing it.
This European legislation eliminates the most significant differences between
the legislation of member states and thus establishes a legal framework within
which insurance and reinsurance companies may operate in a single internal
market.
The European initiative took effect in Spain on 1 January 2016 after the Spanish
Parliament approved Law 20/2015, of 14 July 2015, on the Regulation, Supervision and Solvency of Insurance and Reinsurance Companies (LOSSEAR)
together with the Regulation on the Regulation, Supervision and Solvency
of Insurance and Reinsurance Companies (Royal Decree 1060/2015, of 20
November).
Both laws transpose the European directives into Spanish legislation and
constitute the basic legal texts governing the requirements of the new Solvency II system.
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The innovations introduced by the new legislation include a new method
of calculating solvency requirements, a reinforced governance system, the
unification of information systems by institutions, a new supervision model
offering the supervisor greater functions, a prior authorisation system and
the capacity to issue technical guides and circulars.
Rating
upgrade
In 2015 the risk ratings agency Standard & Poor raised CESCE’s long-term
solvency rating from BBB to BBB+ with a stable outlook.
The risk rating agency believes that CESCE has a strong business profile, based
on its solvency capital exceeding AAA and its impressive results.
Standard and Poor’s concludes that its outlook is stable, its competitive position expected to be satisfactory and its capital and income predicted to
be moderately high over the next two years. The risks rating agency also
highlighted CESCE’s position in the national credit and sureties market.
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CESCE MASTER ORO
Pay Per Cover and Full Cover
Risk
Management
3.1.2. Commercial range of
credit insurance and solutions
and consultancy services
• Advanced mechanism to control risks
based on statistical models using the
internet and mobile phones
• Specialist consultants
Risk
coverage
• Pay Per Cover: the customer chooses which of its
customers to monitor so that later, if it so desires, it
may cover the default risk
• Full Cover: the customer insures its whole
portfolio and the price of each transaction depends
on the payment performance of the debtor
Financing
The CESCE MASTER ORO solution amalgamates that set of services into a
single product, which may be managed from the digital CESNET platform.
• CESCE Fondo Apoyo a Empresas
In 2015, consultancy services were added to this high added-value range
through CESCE Consulting. This unit offers new tools and methodologies
ensuring business processes and risk management systems are coherent.
• Insurance Certificates
• Liquidity Titles
Market
prospecting
CESCE has revolutionised commercial insurance through innovative solutions
and services covering companies’ main needs: finding and monitoring customers, covering commercial risk and financing.
• Spain: Prospecta databases - 2 million
companies
• Abroad: GRS Global - 250 million companies
in 200 countries
CESCE MASTER ORO
• Country Risk: reports, fact sheets
CONSULTANCY
Risk Management
Processes
Technology
Analysis
At all times CESCE’s customers may monitor the payment performance of
their customers through the Risk Management service. This is an innovative
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portfolio analysis system, which may be used to monitor the risks of their
debtors in real time through the most appropriate channel in each context
(internet, mobile phone).
This monitoring mechanism is based on decision-making statistical models
processing millions of pieces of data on thousands of companies, establishing an advanced outsourcing apparatus which may be used to monitor
commercial risks. This mechanism also feeds off the experience of a team
of 70 professionals in 10 countries with more than 40 years in credit risk
management.
In 2015 the Risk Management service became more flexible, permitting
customers to monitor and classify in real time solely those customers
they select from their entire portfolio.
The monitoring services offered by CESCE include Dun Trade, which
enables customers to compare their companies’ real situation with the
competition, the market and the sector, and hence to adjust recovery
and payment times. Among other benefits, the Dun Trade programme
enables customers to ascertain how debtors are paying other suppliers
providing their information to Dun Trade.
Risk coverage
Full Cover provides total protection to companies as it covers the risk
of all their debtors, offering them a coverage commitment related to
their customers’ level of risk. The benefit compared to other companies
lies in the fact that it offers different prices for debtors who perform
differently.
The two solutions cover defaults of up to 95% of a company’s sales and
compensation is paid within 60 days of the information about the claim
being received.
In both modalities, CESCE MASTER ORO integrates services tailored to
the needs of each company, such as the identification of potential customers, the monitoring of customer portfolios and access to immediate
finance (as discussed below).
It is also possible to take out solely insurance cover through the CESCE
Classic policy.
Financing
CESCE helps companies finance themselves through innovative bank
and non-bank financing solutions and discounting of their sales invoices
(with or without recourse).
CESCE MASTER ORO offers two types of risk coverage: Pay Per Cover
and Full Cover.
Pay Per Cover permits policyholders to monitor their customer portfolios
and cover the risks deemed most critical whenever they wish, with no
obligation to cover their entire portfolio.
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To ease access to finance from credit institutions, CESCE provides companies with two innovative solutions: Liquidity Guarantees and Insurance
Certificates. However, companies who wish to obtain liquidity without
resorting to banks can turn to the CESCE Fondo Apoyo a Empresas (Business Support Fund).
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CESCE MASTER ORO offers two types of risk
coverage: Pay Per Cover and Full Cover
Process for
obtaining funds:
CESCE Fondo
Apoyo a Empresas
CESCE Fondo Apoyo a Empresas
Application for support:
Via the CESNET platform.
The CESCE Fondo Apoyo a Empresas is an innovative financing channel
and alternative to banks enabling companies to obtain liquidity quickly
and safely through the sale of trade invoices under the factoring without
recourse modality.
Study and approval:
Approval process for
issuing the Liquidity
Title.
Any company, whether or not a CESCE MASTER ORO customer, may access
this funding formula which does not use up the bank lines of credit of the
company or the customer paying the bills, is not included in the CIRBE (Bank
of Spain’s Risk Information Centre), and provides a level of diversification to its
pool of financiers, introducing in many cases non-bank financing.
The financing process is very simple, since it features a fully-automated circuit
for entering into contracts. The customer obtains funds immediately from the
moment the application is formalised (current average time is 2.1 days).
Obtaining of funds:
A transfer is made to
the customer.
The transaction is performed under the factoring without recourse modality,
i.e. the company shall not be liable for the potential insolvency of the debtor,
the Fund assuming the whole default risk associated with the transaction.
During 2015, finance of more than €55 million was raised on 4,600 invoices,
representing a growth of 29%.
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2.1
The process takes an average 2.1 days.
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In 2015, CESCE made its product Pay Per Cover more
flexible, enabling customers to decide which
debtors they wish to monitor
The number of companies financed by the Fund grew by 35%, with 391
debtors in 14 countries, thus demonstrating the significant help it provides
to companies who wish to expand internationally.
In 2015, the company extended the specific sales network it provides for
this financial product in addition to its customised call centres, CESCE
being one of the first institutions to offer financial solutions purchased
online.
Opening CESCE Fondo Apoyo a Empresas to companies which were
not previously CESCE MASTER ORO customers in 2014 has enabled the
insurer to promote its services to companies who were self-insured and
win them as customers under any of its credit coverage modalities.
Póliza Factoring
CESCE also offers factoring-based solutions such as Póliza Factoring,
which is specifically designed for financial institutions or collaboration
agreements with different Spanish or Latin American financial institutions to
facilitate access to financing our customers through the issue of guarantees.
Such is the closeness of its links with the financial world that CESCE has been
admitted as a member of ASOFACTORING (Colombian Association of Factoring) and AEF (Spanish Association of Factoring) alongside the major banks.
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CESCE keeps working both to consolidate its various factoring-oriented
solutions and to create growth and economic/financial restructuring alternatives for companies.
CESCE customers get access to a list of 2 million
Spanish companies along with an analysis and
valuation of each company for coverage purposes
Access to bank financing
CESCE MASTER ORO customers are provided with solutions facilitating
access to bank financing. By activating any of the Risk Coverage mechanisms (Pay per Cover or Full Cover), companies can benefit from the issue
of Liquidity Titles and Insurance Certificates.
• Insurance Certificates are documents confirming the existence of cover
for specific invoices under the insurance policy.
This service enables customers to apply for the certification of invoices
notified the insurer maturing within 25 days or more as from the date of
the application, in respect of credit granted debtors resident anywhere in
the world, simultaneously indicating the financial institution to be compensated in the event of default.
• Liquidity Titles are documents issued by CESCE for invoices covered by
the insurance. These documents meet the criteria of a CESCE personal
guarantee in favour of financial institutions, as acknowledged by the Bank
of Spain for the purposes of the Basel II regulations.
CESCE issues Liquidity Titles after a process validating compliance with
the insurance conditions and technical and commercial verification of the
trade credits for which the CESCE customer wishes to obtain the Liquidity
Certificate. To date, no other credit insurer performs such services.
Through these two solutions CESCE has issued more than €300 million
worth of guarantees in favour of various financial institutions to help its
customers get access to financing.
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Market
Prospecting
The search for solvent customers is an arduous task to which companies
devote time, effort and financial resources. Aware of this difficulty, CESCE
offers its customers the Market Prospecting service, enabling them to find
new customers both in Spain and abroad in an efficient way.
CESCE customers get access to a list of 2 million Spanish companies
along with an analysis and valuation of each company for coverage purposes based on Prospecta, the largest database in the market. CESCE
offers customers who wish to expand internationally the GRS Global
service, through which potential customers may be sought from over
250 million companies worldwide.
This information is supplemented by the Country Risk service, which
offers a diagnosis of risks arising from trade and investment abroad
including macroeconomic tables, Country Risk reports and documents
on Spain.
Customers also have access to Prens@mail, a service monitoring the press
and significant legal incidents segmented by company.
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CONSULTANCY
CESCE offers customised consultancy services for each company,
with tools that include risk and recoveries management, incorporate
financial information from Informa D&B, and connect to its customers’
credit solutions through CESCE Consulting.
CESCE Consulting’s mission is to provide companies with efficient tools
and methods to control commercial credit risks, granting them the freedom to manage and control default, the company’s business processes
efficiently cohering with the risk management systems supporting it.
For CESCE and its subsidiaries this new activity represents a significant
qualitative leap in the business world as it incorporates into the whole
group’s aggregate range of products and services a very important component much in demand from today’s enterprise: consultancy.
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3.1.3 Sureties
CESCE offers surety insurance to businesses. The company backs the policyholder before the different public administrations or the private sector
in respect of the economic liabilities he may be required to honour as a
result of the default on guaranteed obligations arising from either a contract
(works, supply or provision of services) or from a legal provision.
CESCE’s surety insurance, among other advantages, facilitates commercial
trade , frees up resources and expedites the analysis of new lines and the
issue of guarantees.
The main types of surety offered by CESCE are for:
- Public tenders (bid maintenance)
- Proper contractual performance
- Advance payments and supplies
- Customs obligations
- Purchasing of advertising time on television
- The Spanish Agricultural Guarantee Fund – FEGA
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Spanish Export Credit
Agency (ECA)
As an Export Credit Agency (ECA), CESCE has managed on
behalf of the State the political, commercial and extraordinary
risks associated with the internationalisation of Spanish
companies since 1970. In 2015 contracting recovered and the
new regulatory framework approved in 2014 took full effect. A
process was also initiated to improve the quality of the services
in collaboration with customers.
3.2
3.2.1 Return
to normality
Ce
nt r
od
©
GL
O B e co n
AL
v
BO enci
on
BE
e
From the perspective of CESCE’s State Account, 2015 represented above
all a return to normality. Fear of the “Spanish risk” and its hypothetical
contagious effect on CESCE’s activity lie behind us and trust in the system
seems to be fully restored.
sd
eL
im
a/
PE
RÚ
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The new contracts figure recovered from the low recorded in the wake of
the crisis. We have noted a return of credit on conditions closer to those
of our neighbouring countries, in terms of both repayment periods and
prices. The range of bank guarantees has recovered, enabling CESCE to
return to “normal” risk-sharing rates.
The regulatory changes approved in 2014 are fully in effect. CESCE has
completed the separation of public and private activities. The Internationalisation Risk Reserve Fund, which it is worth remembering reinforces
the solidity of the instrument, mitigates the impact of possible future
crises and protects the instrument from the aforementioned “Spanish
risk”, has been constituted and endowed. And the State Account Risks
Committee is no longer in the running-in phase and has now held more
than 100 meetings.
CDGAE (Government Economic Affairs Committee)
One of the changes introduced in this legislation was the approval mechanism for “exceptional transactions”, a concept which includes but is not
limited to large-scale transactions (credits of more than €400 million or
more than €150 million if Project Finance or guarantees are involved),
transactions with debtors already bearing a significant burden of risk, and
transactions in HIPC countries.
The approval mechanism for all these coverage requests involves ratification
by the Government Economic Affairs Committee. During 2015, a total of
seven transactions were approved under this procedure.
Large transactions, innovative structures
However, not everything was “normal” in 2015. A characteristic trait of the
business was the predominance of large projects in terms of policies, offers
and above all letters of intent. Besides the STAR refinery discussed below,
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the year’s stellar project (excuse the pun), several funding projects with
limited recourse were analysed. We received a large number of queries
about funding in local currency, which although they have not yet resulted in specific policies, seems to indicate growing interest in this product
(CESCE may cover credits in local currency and not apply the crystallisation
clause, i.e. the obligation to convert the outstanding balances of the debt
to hard currency after a default).
Regarding the interest shown by geographical area: CESCE has begun to
see significant and innovative structures in Paraguay; we are finalising the
negotiation of its second first demand guarantee for a buyer credit in Indonesia; we have received numerous queries about large projects in Egypt;
and retain our interest in Ecuador (although the paperwork remains slow).
Angola continues to be one of the most requested destinations. And on
another level, in 2014 CESCE established a ceiling for small transactions in
Cuba with a maximum term of one year. That ceiling, under which around
250 individual transactions have been approved, has now been renewed
twice. Cuba is the country where by far the largest number of policies have
been taken out, although the total amount insured through these contracts
is moderate. At the end of 2015 coverage for medium-term transactions
was established (up to 5 years), high demand being anticipated for this
destination. The same could be said of Iran, where coverage was renewed
from the beginning of 2016 after the lifting of European sanctions.
Despite CESCE continuing to actively participate in surety transactions, contracting figures have dropped, among other causes owing to the company’s
lower participation in the risks and to this year’s average value of transactions being smaller than in previous years.
Improvements to CESCE products
Aware of the need to improve some aspects of its customer service, in
2015 CESCE held meetings with the instrument’s main users from which it
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CESCE is exploring various formulas to adapt the
range of services on offer to the specific
needs of SMEs
which is expected to help facilitate access to this type of finance by exporting SMEs. It is worth recalling that CESCE covers risks arising from credits
to exporting companies under its Bank Guarantee Policies , provided that
the contract financed is an export contract. Of course, this modality is in
the list of products to be reviewed.
Another measure aimed at SMEs is the simplification of the conditionings
of the Supplier Credit policies in order to facilitate discounting of invoices
or bills by banks.
Miscellaneous
extracted new ideas for improvement on which it has been working. The
first step is the product review through the remodelling of general conditions. CESCE would like to thank all the banks and companies collaborating
with the company in this process for the time they are dedicating to it and
their valuable contributions to redefining products.
For the moment, the general conditions of the Guarantor’s Bond Insurance (now Guarantor’s Surety Insurance) have been amended and are in
the final approval stage. The second reviewed product, the Works Abroad
Insurance, is at the time of writing in the public consultation stage. The
next product on the list to be reviewed are the Documentary Credits
Confirmation Policies, both the open and individual modality, which will
incorporate as a major innovation the coverage of default by private
financial institutions.
CESCE is also exploring various formulas to adapt the range of services it
offers to the specific needs of SMEs. One first step in that direction was
the improvement of the Bond Facility for SMEs. Firstly, a second tranche
of €50 million has been approved for once the original €50 million sum
has been exhausted. Furthermore, CESCE has expanded its remit not only
to surety transactions but also to pre-credit or working capital financing,
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At the end of 2015 CESCE hosted the second round table organised by
TXF, attended by several of the country’s main exporters and financiers.
Javier Valero, Chairman of Globaltec and former Managing Director of
CESCE, acted as moderator of a meeting in which interesting ideas were
presented and constructive criticism was not lacking (fortunately). The
round table encouraged CESCE to keep improving the official financial
support mechanism for internationalisation.
One of the year’s most important events was the appointment of Beatriz
Reguero, Director of the State Account, as Chair of the Medium and Long
Term Committee of the Berne Union, the club of the main global insurers
of export and investment credits. Each year its more than 50 members
insure or loan around $2 billion, representing 10% of world trade.
Over the coming years CESCE will then have a presence on the decisionmaking bodies of this important organisation for our sector, giving us an
active voice on the definition of meeting agendas and a more visible role
in the development of the business.
In short, 2015 was a return to normality, although at the end of the day:
what is “normal”?
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3.2.2 The many
faces of CESCE’s
activities
Please find below information about a selection of projects where official support from
CESCE as the State Export Credit Agency has
contributed to the global experience of Spanish businesses.
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Liquefied gas storage tanks in Moín
COSTA RICA - GRUPO DURO FELGUERA, SA
Exporter
FELGUERA IHI, SA
Contractor
Refinadora Costarricense de Petróleo, SA ”RECOPE”
Country
Costa Rica
Value of transaction
US$48.9 million
Type of transaction
Funding through Buyer Credit
Term
10 years
Sector
Gas and oil
Date closed
2 December 2015
Insuring banks
BNP Paribas Fortis SA/NV and Société Générale Sucursal en España
Riesgos cubiertos
Credit default risk
CESCE Insurance Modality
Buyer Credit
Felguera IHI, SA won the tender organised by RECOPE for
the turnkey construction of four liquefied gas storage tanks
and for all conneced works at the Moín Refinery in Puerto
Limón, Costa Rica.
This contract is included within the Costa Rican refinery’s
Liquefied Petroleum Gas Storage Systems Project.
the energy, industry and oil and gas sectors and the provision
of specialist services for industry and the manufacture of
capital goods.
The contract was financed through a credit granted by BNP
and SG to the Costa Rican buyer. CESCE has participated in
the transaction through a Buyer Credit guarantee. The policy
took effect in December 2015.
Part of the DURO FELGUERA group, Felguera IHI is a company specialising in the execution of “turnkey” projects for
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Liquefied gas storage
tanks / Costa Rica
© Grupo Duro Felguera SA
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Convention Centre
Façade / PERU
© Grupo Global BOBE
Lima Convention Centre Façade
PERU - GRUPO GLOBAL BOBE
Exporter
INBOBE
Contractor
Constructora OAS, Perú
Country
Perú
US$3.5 million
Type of transaction
Technical guarantees
Term
10 months
Sector
Construction
Date closed
9 June 2015
Bank guarantor/insured
Santander
Risks covered
Credit default risk arising from enforcement of guarantees
Guarantor’s Bond Insurance (under the Bond Line for SMEs)
Through its subsidiary Inbobe Perú, Grupo Inbobe has designed, manufactured and installed the façades of the new Lima
Convention Centre. The new building was opened at the end
of 2015, hosting the IMF’s Annual General Meeting.
Through its subsidiaries, Inbobe acts in the construction sector as a subcontractor for large construction companies, conducting engineering work, providing materials and supplying
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the skilled workforce needed to build ventilated façades and
curtain walls for unique structures.
On this occasion, CESCE supported the construction company through the Guarantor’s Bond Insurance Policy. The
insurance covers the technical guarantees issued by the
Banco de Crédito del Perú, counter-guaranteed by Banco
Santander, CESCE’s insured.
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Construction and equipment of the fishing school
CEFOPESCAS - ANGOLA
Exporter
INCATEMA CONSULTING & ENGINEERING SL
Contractor
MINISTRY OF FISHING
Country
Angola
US$98,342,755.23
Type of transaction
Funding through Buyer Credit
Term
Execution: 3 years, Financing: 8.5 years
Sector
Construction and equipment
Date closed
1 December 2015
Financing banks/Insured
Bank syndicate comprising Banco Bilbao Vizcaya Argentaria SA, Banco
Santander SA and Caixabank SA
Risks covered
Risk of default on the credit granted by the bank syndicate to the buyer
Buyer Credit Insurance Policy
At the end of 2014 Incatema Consulting & Engineering SL
signed a contract with the Ministry of Fishing of the Republic
of Angola to execute a project designed to create a fishing
school complex called CEFOPESCAS, located in the Ramiro
township to the south of Luanda. This is a project exerting
a major influence on exports, since the goods and services
exported are totally of Spanish origin, involving a large number of Spanish suppliers.
Incatema executes construction projects in the spheres of
agricultural production, irrigation, the agri-food industry, fishing, the water cycle and architecture, covering a wide range
of jobs and using cutting-edge technology in the design and
management of the works. To implement these projects it
has its own architecture department. For many years it has
participated in professional training and higher education projects in the fields of agriculture and fishing. It has executed
several contracts in Angola over recent years.
On this occasion, CESCE supported the exporting company
through Buyer Credit insurance. The insurance covers credit
granted by the banking syndicate (BBVA, Banco de Santander
SA and Caixabank SA) to the Republic of Angola to finance
the export contract.
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Construction of the fishing school
and its equipment / ANGOLA
© CEFOPESCAS
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400 kV transmission line
Loyangalani-Suswa (Lake Turkana), KENYA - ISOLUX INGENIERíA, S.A.
Exporter
ISOLUX INGENIERÍA, S.A.
Contractor
KENYA ELECTRICITY TRANSMISSION COMPANY LIMITED (KETRACO)
Debtor
REPUBLIC OF KENYA
Country
KENYA
Contract >€142 million | Buyer Credit covered: >€58 million
Type of transaction
Turnkey contract.
Financed by Buyer Credit and a
Company Internationalisation Fund
(FIEM) credit
Ejecución: 2 años, Amortización: 8,5 años
Term
Execution: 2 years, Repayment: 8.5 years
Sector
Energy
Date closed
July 2015 (signing of the Policy)
Insured
Banking syndicate: Deutsche Bank (Agent Bank), BNP Paribas, Banco Santander,
Société Générale.
Risks covered
Credit default risk
Buyer Credit Policy
The Spanish company ISOLUX INGENIERÍA is now constructing the 400 kV transmission line between the settlements of
Loyangalani and Suswa in the vicinity of Lake Turkana in Kenya.
400 kV Transmission Line / KENYA
© ISOLUX Ingeniería, SA
CESCE has supported this Spanish company by covering
the banking syndicate led by Deutsche Bank, which granted
a Buyer Credit as part of the funding of the turnkey project
being executed by ISOLUX INGENIERÍA in conjunction with
Kenya’s national electricity company KETRACO. FIEM also
granted the project a credit, and the debtor for both credits
is the Republic of Kenya.
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ISOLUX CORSAN is a leading global company in the spheres
of licensing, energy, construction and industrial services, performing activities in more than 45 countries for more than 80
years. In the field of energy, it has erected transmission lines
amounting to a total length of more than 12,000 kilometres.
The coverage was formalised in July 2015 through the signature of the Buyer Credit insurance policy covering political risk
on a credit of just over €58 million with a duration of more
than 10 years (2 years construction/execution and 8.5 years
repayment), a credit intended to finance the sales/exports
of goods and services which are largely of Spanish origin.
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Tulcea Project (Plot 1)
ROMANIA - OCIDE CONSTRUCCIÓN, SA
Exporter
OCIDE CONSTRUCCIÓN, S.A.
Guarantor
BANKIA, S.A.
Beneficiary
AQUASERV SA - TULCEA
Country
ROMANIA
€8.6 million
Type of transaction Bond
Works and Maintenance Guarantee
Works Period
48 MONTHS
Bond Period
14 MONTHS
Sector
Construction
Date closed
August 2015
Risks covered
Risks during the construction or execution phase of the works
abroad and coverage of the credit arising from the enforcement
of the guarantee
Construction Work Abroad Insurance and Guarantor’s Bond
Insurance (under the Bonds Line for SMEs)
The company OCIDE CONSTRUCCIÓN has executed a
project in Romania consisting of renovating and extending
the distribution network and drainage system in the Tulcea
agglomeration (plot 1).
OCIDE CONSTRUCCIÓN’s main activity is civil engineering,
mainly for public authorities, related to hydraulic projects
(drainage, pipelines, purification plants, etc.), linear infras-
tructure (railways and roads) and non-residential buildings
(schools, hospitals, etc.).
On this occasion, CESCE has supported the construction
company directly through Construction Work Abroad Insurance and indirectly through the Guarantor’s Bond Insurance
covering BANKIA, the bank issuing the guarantee.
Tulcea Project / ROMANIA
© Ocide Construcción, SA
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Finis Terrae Photovoltaic Power Station
CHILE - PRODIEL
Photovoltaic Power Station / CHILE
© PRODIEL
Exporter
PRODIEL Proyectos de Instalaciones Eléctricas, SL
Contractor
Parque Eólico Renaico SPA
Country
Chile
US$75.8 million
Type of transaction
Technical guarantees
Term
19 months
Sector
Renewable Energy
Date closed
June 2015
Bank guarantors/insured
Deutsche Bank SAE, BBVA and Bankia SA
Risks covered
Coverage of the credit arising from the enforcement of the
advance payment and performance bonds
Guarantor’s Bond Insurance (under the Bonds Line for SMEs)
The Spanish company PRODIEL, Proyectos de Instalaciones
Eléctricas S.L. is constructing the Finis Terrae Photovoltaic
Power Station. The contract was signed by Prodiel and Parque Eólico Renaico SPA in January 2015 after a public tender.
The latter company is owned by Enel Green Power Chile Ltda.
The scope of this EPC contract includes detail engineering,
earthworks, supply and installation of the single-axis solar
tracker, electrical work, installation of photovoltaic modules
and commissioning.
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PRODIEL is a company specialising in engineering, development, and the construction and maintenance of all kinds
of projects involving electricity, renewable energy, telecommunications and industry.
In June 2015 CESCE signed a Guarantor’s Bond Insurance
Contract covering 50% of the credit involving PRODIEL in
the event of enforcement of the advance payment and performance guarantees. The banks issuing the guarantees and
CESCE’s insured are Deutsche Bank, BBVA and Bankia.
STAR Refinery (Aegean Refinery Project)
STAR Refinery / TURKEY
© Técnicas Reunidas, SA
TURKEY - TÉCNICAS REUNIDAS, SA
Exporter
TÉCNICAS REUNIDAS (Spain) / SAIPEM (Italy) /
ENGINEERING & CONSTRUCTION (Korea) /
ITOCHU (Japan)
SOCAR (State Oil Company Of Azerbaijan Republic)
Ministerio de Economía de la República de Azerbaiyán
Developers
SOCAR (State Oil Company of Azerbaijan Republic)
Ministry of Economy of the Republic of Azerbaijan
Turquía
Contractor
STAR ”STAR REFINERI ANONIM SIRKETI” (Project Company)
Country
Turkey
Project: > US$5.6 billion | EPC Contract: > US$3.6 billion; Buyer
Credit covered: US$600 million
Type of transaction
Project Finance
Term
Execution: 46 months, Repayment: 14 years
Sector
Petroleum industry
Date closed
May 2015 (signing of the Policy)
Insuring banks
Banking syndicate: BBVA (Agent Bank), Banco Popular, BNP
Paribas, Crédit Agricole, Deutsche Bank, ING Bank, CaixaBank,
Banco Santander, Société Générale.
Risks covered
Default risk (political and commercial)
Buyer Credit Policy (Project Finance Scheme)
As leader of the consortium of contractors and exporters,
TÉCNICAS REUNIDAS is already immersed in the construction of the STAR refinery in Aliaga on Turkey’s Egeo coast
50 km to the north of Izmir, a refinery designed to reach an
average processing capacity of 10 million tonnes of crude
oil per year for high added-value products complying with
the strictest environmental standards.
Engineering News Record) and is considered to be the top
turnkey refinery contractor over the last 5 years. In 2014 Técnicas Reunidas won the biggest refinery design and construction contract awarded to a single contractor in the world. It
has successfully performed more than 500 projects involving
oil and gas, petrochemical units and fertilisers and is currently
working in more than 30 countries.
TÉCNICAS REUNIDAS is one of the leading global engineering companies in the oil and gas sector (according to the
On this occasion, CESCE has supported the involvement of
the Spanish company in this international project by covering
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ANNUAL REPORT 2015
the funding of the Spanish stake in the EPC construction
contract, largely comprising Spanish goods and services.
The coverage was formalised through the signature of the
Buyer Credit Insurance Policy contract in May 2015, covering
the political and commercial risks of the financing transaction
through a Project Finance scheme consisting of a US$600
million credit with a duration of almost 18 years (46 months
construction/execution time and 14 years repayment time).
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Information and services
3.3
CESCE relies on two strategic suppliers to support its financing
and credit insurance system: its subsidiaries Informa D&B and
CTI. In Spain, Portugal and Colombia, Informa D&B is the leader
in the supply of information about companies to companies.
CTI provides outsourcing services involving business processes
and technological solutions.
D&B REPORT
Informa D&B’s mission is to supply commercial, financial, sector and marketing information to increase customer and supplier knowledge and minimise commercial risk.
Created in 1992 as the strategic supplier for its parent company CESCE,
Informa D&B works jointly with CESCE to create comprehensive credit
solutions and to offer its customers online information on more than 250
million companies worldwide.
Informa D&B is the only Spanish company to offer its customers online
access to the international Dun & Bradstreet database (the D&B WorldBase),
the largest commercial, financial and marketing database in the world.
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During 2015, Informa D&B absorbed its subsidiary
DBK, the first Spanish company to specialise in
preparing sector and competition studies
Informa D&B
national database
6.7
million
national economic players
In Spain, Informa D&B’s database is fed by public and private information sources, like the Official Gazette of the Companies Registry, the Account Deposits,
the Official State Gazette (BOE), the Official Gazettes of the Provinces and
Autonomous Communities, the national and regional press, ad hoc investigations and various publications. Informa D&B also compiles and processes all
the information on default (RAI, EBE, Paydex indicator, InfoDeuda).
3.5
million
rated active companies
and self-employed professionals
Informa D&B offers its customers an Online Reputation Report so that they
can ascertain the position of Spanish companies on the internet and in the
social networks.
13.2 million
More than
company balance sheets
Informa D&B absorbs DBK
14 million
During 2015, Informa D&B absorbed its subsidiary DBK, the first Spanish company to specialise in preparing sector and competition studies, Informa D&B
thus becoming a leader in the supply of sector information.
More than
company managers
DBK then became part of Informa D&B, gathering all the sector information
products Informa D&B sells under the umbrella of the DBK Sector Observatory.
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You can find national and international databases
of all kinds in Informa D&B’s new
marketing marketplace
First marketing marketplace
Besides DBK’s new website, Informa D&B has created the first marketing marketplace through the Informa and eInforma trademarks.
This marketplace provides the user with competition analysis tools,
in-depth sector studies, online reputation reports and localisation
studies.
National and international databases of all kinds may be found on
the new website, including those offering emails with permission
to conduct marketing campaigns. The website also provides the
opportunity to access other Informa and eInforma marketing
services, such as the arrangement of interviews with potential
customers to facilitate commercial activity.
Individuals’ Non-Payments Report
Finally in 2015 Informa D&B created the first and only report to include
information on individuals’ defaults, the Individuals’ Non-Payments Report,
with access to the InfoDeuda Defaulters’ List.
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For the second consecutive year Informa D&B was
included on the Best Workplaces list, which identifies
the 50 best companies to work for
The list has more than 1.2 million records of individuals with
an unpaid debt balance of more than €1.7 billion.
Among the best companies to work for
In recognition of its work as a socially responsible company,
Informa D&B was included for the second consecutive year in
the Best Workplaces list. This list includes the 50 best companies
to work for in Spain according to the prestigious international
consultancy Great Place to Work.
Commitment to innovation
Informa D&B’s leading position is based on intensive purchasing of all
available business information, high-quality processing of that information,
continuous improvement of its company ratings and analysis systems, and
constant commitment to innovation in the design of new products and
services.
In 1996 Informa D&B was the first European company and the second
company worldwide to sell its commercial information services via the
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internet. However, despite being a company which bases its success on
being at the heart of the online world, it does not neglect face-to-face
relationships. Hence it possesses the most extensive sales network in its
sector, including a network of 15 offices in Spain.
CTI launched the Financial Sector Sales Directorate
aimed at preserving the compensation
and payments business
CTI
In 2015 CTI retained its business model based on Business Process Outsourcing (BPO) and technology, strengthening its specialisation in information
processing and payment systems as well as commercial credit management.
Its strategy continues to focus on profitability (through optimisation of its
gross margin per service), control, moderation and reduction of expenditure, and integration of CTI’s business into the activities and products and
services offered by the group’s companies.
Growth and diversification
Throughout the financial year, action has been taken in the growth and
diversification phases of the company’s commercial area in line with a new
economic stage generating greater receptivity in the market.
Within a commercial approach to taking action based on sectors of activity, in January the Financial Sector Commercial Directorate was created
to preserve the compensation and payments business and increase turnover on business process technology and management with the sector’s
companies.
In the middle of November, the Industry and Services Sector Directorate
was created to increase turnover on business and service lines with non-
47
financial companies and institutions, where traditionally CTI has limited
its focus.
Technological solutions
The Cash Flow Management Optimisation Tool, CTI’s own technological
solution, keeps producing results and meeting commercial expectations.
The “CTI Cash” trademark has been registered so it can be marketed.
The telemarketing services delivered in close collaboration with Informa
D&B have been consolidated.
New Marketing Plan
From a corporate point of view, the company’s brand image has been
considerably strengthened through internal and external communications
and customer recruitment campaigns in line with the 2015 Marketing Plan.
Furthermore, the company has developed a Comprehensive Document
Management Project applicable to all of its functional areas and embarked
on a continuous process to incorporate management of the financial area
into SAP. Both projects will culminate in the first months of 2016.
ANNUAL REPORT 2015
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IN 2015
2015
CESCE
4
CESCE in 2015
4.1 ECONOMIC CLIMATE
4.2 PERFORMANCE IN 2015
4.2.1 Credit insurance and solutions, consultancy and sureties
4.2.2 Spanish Export Credit Agency (ECA)
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Economic
environment
In 2015 the international economy experienced moments
of uncertainty and unease, which translated into increased
moderation of global growth. Within the context of this
slowdown Spain led growth in the Eurozone with an increase in
GDP of 3.2%, a rate which may however be curbed in 2016.
4.1
The intense volatility of the international financial markets throughout the
year, with significant falls on the world’s stock exchanges, just reflects
investors’ concern about several pockets of risk, some of which are unprecedented, clouding the political and economic outlook. Uncertainty and
unease are possibly the two defining traits of 2015.
The year ended with the lowest global growth since 2009 (3.1%), which
despite being a relatively acceptable rate, after three consecutive years of
rates lower than 3.5%, seems to confirm that global activity has entered a
phase of moderate growth. The changing composition of that growth is
also relevant. The emerging countries are no longer playing the leading
role as drivers of global growth. In 2015 the difference in growth between
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GDP growth rates
BY PERCENTAGE
2009
2010
2011
2012
2013
2014
2015
2016p
Worldwide
-0.1
5.4
4.2
3.5
3.3
3.4
3.1
3.2
Advanced economies
-3.4
3.1
1.7
1.2
1.2
1.8
1.9
1.9
Emerging and developing economies
3.0
7.4
6.3
5.3
4.9
4.6
4.0
4.1
Source: IMF
the emerging and advanced economies was the lowest in the last 15 years.
The notable slowdown of the emerging economies, with China at the head,
is not being completely offset by the recovery in the advanced countries,
translating into a slowdown of global growth. Obviously this was reflected
in world trade, which slowed down slightly (2.8%) compared to 2014 (3%).
This trend was fundamentally consistent with the persistent weakness in
demand (especially in the emerging economies) and the fall in prices of
raw materials, the transition in China being the main explanatory factor.
The slowdown in China is undoubtedly one of the
main factors influencing global growth
The slowdown in the Asian giant is undoubtedly one of the main factors
influencing global growth. Excessively dependent on investment, its export
model, based on cheap and abundant manpower and overexploitation of
natural resources, is depleted. The rebalancing act involving private consumption and services playing a greater role and the environment being
treated more respectfully will inevitably entail more modest growth rates.
A slowdown affecting a country which has become the second biggest
global economy and the leading importer poses a significant challenge to
the whole world.
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The price of oil has fallen 75% since its peak in 2014,
metal costs half what it did in 2011 and agricultural
products are a third cheaper than what they were
Secondly, and closely linked to the aforementioned risk, the price of raw
materials has collapsed. The price of oil has fallen 75% since its peak in 2014,
metal costs half what it did in 2011 and agricultural products are a third
cheaper than five years ago. The slump in prices represents the beginning
of a new phase in the development of the global economy, with important
consequences for producers and consumers. The adjustment is especially
painful for those countries strongly dependent on exports of raw materials,
whose public and external accounts are being decimated.
Thirdly, this year was marked by an intense debate about the Federal Reserve’s
monetary stimuli and their subsequent withdrawal. The intense injection
of liquidity undertaken by the main central banks of the advanced coun-
7
6
5
Difference in growth between emerging
and advanced economies 1980-2015
4
3
BY PERCENTAGE
2
1
0
-1
-2
1980
1985
1990
1995
2000
2005
2010
2015
Source: IMF
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2015 was marked by an intense debate about
the Federal Reserve’s monetary stimuli and their
subsequent withdrawal
tries since the international financial crisis exploded in 2008 has been
unprecedented. These stimuli are still not being withdrawn. While the
Federal Reserve and possibly the Bank of England are quietly initiating
the normalisation of their policies, the Bank of Japan and the European
Central Bank are still intensifying them. This discrepancy adds greater
uncertainty and reflects uneven recovery in the developed countries.
Another risk factor is the performance of emerging countries other
than China, which are experiencing a triple shock: the slowdown in
China, the low prices of raw materials, and the hardening of financial
conditions in the wake of the USA’s rates rise.
The final risk factor is the triggering of an escalation of geopolitical tensions,
undermining confidence and disrupting commercial, financial and tourism
flows. We refer both to the threat of international terrorism, currently perpetrated most visibly by ISIS, and regional crises such as the refugee crisis
in Europe or the conflict between Ukraine and Russia.
Added to the above is the general feeling that economic decision-makers
have been left practically no room for manoeuvre in tackling or mitigating
a major slowdown of economic activity. In terms of monetary policy, rates
have hit rock bottom and public and private debt is very high (especially
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2015
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There is the risk of an escalation of geopolitical
tensions, undermining confidence and disrupting
commercial, financial and tourism flows
in the emerging countries), limiting the possibility of using fiscal policy to
stabilise the cycle. In turn, structural policies have not played the leading
role they deserve.
Advanced countries seem to be stuck in a state of weak growth. In 2015
GDP increased in those countries by 1.9%, the forecasts for this year and
the next being growth of 2.2%. In any event, this is a moderate and uneven
recovery facing many economic and political risks.
The emerging countries face a complex scenario caused by the falling
prices of raw materials and the hardening of financial conditions in the
wake of rising Federal Reserve rates. These adverse factors have given rise
to significant imbalances in both public and external accounts which in
turn have encouraged currency depreciation, feeding inflation, raising the
burden of debts in foreign currency and driving up imports and financial
costs. Despite that, emerging countries as a whole recorded significant
growth of 4% in 2015, and forecasts predict 4.5% for this year.
Spain
Spain led growth in the Eurozone in 2015. After a difficult period of
adjustment, the economy grew 3.2% and in March this year recorded eleven
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consecutive quarters of growth. This increase was also accompanied by
more balanced growth. All the components of internal demand began to
grow and despite making a moderate negative contribution, foreign trade
remains dynamic. Spain closed 2015 with financing capability valued at €21.1
billion equivalent to 2.1% of GDP, 43.5% higher than the figure recorded in
2014. This fact is especially positive for a country which incurred chronic
foreign deficits in buoyant phases of the cycle.
Internal demand is once again the engine of growth, driven by greater access to credit for companies and households, rising confidence
and an increase in disposable income thanks to significant creation of
employment.
However, the improvement in economic growth is also due to the
progress made in recent years transforming Spain from one of the
Eurozone’s most critically afflicted countries into a benchmark for
growth.
Firstly, this successful outcome is largely due to the impressive rise of the
export sector leading the recovery. Between 2009 and 2015 exports grew
more than 50% (from €160 billion to more than €250 billion), making Spain
today the ninth biggest exporter in the world. Foreign sales of goods and
services currently represent 33.4% of GDP, the highest figure in history. In
2009 such sales represented 22.7% of total GDP. Among the advanced
economies Spain stands out for not having lost global market share in
exports since 2002, its market share (1.67% of world exports) approximating
its contribution to global GDP (1.73%).
Secondly, economic expansion is also due to the improvement in financial
conditions. Spanish companies now have better access to bank financing,
facilitated on the one hand by the ECB’s measures reducing the cost and
increasing the availability of credit, and encouraged on the other hand by
the restructuring of the Spanish bank sector. In 2015 the banks increased
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After almost six years dominated by rising
unemployment, from the middle of 2013 the job
market began to change for the better
the loans targeted at SMEs while improving conditions and making guarantee requirements more flexible. The new credits will possibly offset
repayments in 2016 and a growing volume of loans to the business sector
is to be expected from the following year.
Thirdly, after almost six years dominated by rising unemployment, from the
middle of 2013 the job market began to change for the better. The number
of people paying Social Security contributions has increased by more than
one million between 2013 and March 2016 (17,263,972). Unemployment
is still at very high levels, but nonetheless a clear improvement has been
recorded since the beginning of 2013. The improvement of the labour
market has undoubtedly been a key factor in the increase of disposable
Contributions
to growth
of GDP
BY PERCENTAGE
4
2
0
-2
-4
Domestic demand
-6
International Trade Sector
-8
GDP year-on-year rate
-10
2009
2010
2011
2012
2013
2014
2015
Source: Banco de España
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Much of the dynamism of the Spanish economy is
due to the impressive rise of the export
sector leading the recovery
income and more dynamic private spending (which grew 3.1% in 2015)
together with the falling oil price, favourable financial conditions, and to
a lesser extent, the introduction of several budgetary measures, such as
the reduction in income tax and the return to public employees of part
of the extraordinary payment eliminated in December 2012.
Another big advance this year has been the recovery in investment.
Among the components of national demand, the highest growth rate
in 2015 corresponded to fixed capital investment (6.4%) and specifically to capital goods and machinery, which closed the year up 10.2%.
Investment continued in construction with an annual rate of 5.3%,
up for the first time since 2007. Foreign investment has also grown in
Spain (by 11% in 2015 up to €21.724 billion), fully reflecting the return of
confidence in the country’s economic performance.
Finally, throughout the crisis, the Spanish economy made an important
adjustment to its borrowing requirement up to the 2013 level. In 2015 it
amounted to €21.1 billion, equivalent to 2.1% of GDP. Spain has been the most
successful EU country in reducing its private debt, although it is still high (175%
of GDP in the third quarter of 2015). Indeed it is the public sector which has
increased its debt. Spain closed 2015 with a public debt level of 99% of GDP
(€1.07 billion), making it the EU country with the seventh highest amount of
public debt, although well behind the levels of Greece (171% of GDP), Italy
(134%) and Portugal (130%). Even in contexts like the present, when interest
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rates are low or very low, this means large interest payments are needed
to service the debt. Therefore, there is a need for substantial refinancing
on the capital markets, increasing the vulnerability of our economy.
Spanish public authorities closed 2015 with a deficit of 5.16% of GDP,
above the target agreed with Brussels (4.2% of GDP). The Bank of Spain
has warned that meeting the deficit target for 2016 will be difficult as
a consequence of the economic slowdown.
Spain has made important progress in recent years, enabling it
to strengthen its macroeconomic framework somewhat, recover
confidence abroad, keep its risk premium in check and, in short,
find its way back to dynamic growth. Consolidation of this growth
necessarily entails persisting with the reforms undertaken and
ensuring imbalances are corrected, unemployment and debt
being undoubtedly the most serious issues. Monetary policy will
possibly remain expansive, although with interest rates low and
even in the negative its efficiency is somewhat limited. Fiscal
policy must return to a more restrictive or neutral way of containing high public debt and meeting EU commitments on the
public deficit. Finally, the great efforts made by Spanish exporters in the light of weak internal demand must be strengthened
to enable the external balance of trade to be maintained in
expansive phases of the cycle, as has been achieved this year.
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Forecasts for Spain
Growth is predicted to fall slightly this year. In its April outlook for this year, the IMF has revised its growth forecast
for Spain downwards by one tenth of one per cent (to
2.6% in 2016), although the government is more optimistic (3%).
The economy is being boosted by cyclical endogenous
factors, structural improvements, and the impact of a
set of positive temporary factors, including the fall in
the price of oil. Some of these factors will be less significant this year. Therefore, a slowdown in the rate of
growth is expected. Furthermore, there are risks that
could lead to a more pronounced slowdown. On the
one hand, in the international context there could be a
more intense slump in the emerging economies than
expected. Domestically, the main risk is potential uncertainty about the effect of mid-term economic policies on
private spending decisions. Specifically, we refer to a loss
of confidence caused by the termination or reversal of
reforms or the breach of tax consolidation commitments,
given that those reforms and commitments have been
the cornerstones of the adjustment of the Spanish economy, the recovery of competitiveness compared to all
the other Eurozone countries, and in short, the economic
recovery overall.
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Technical account results
(pre-tax and post-tax) 50.4
4.2
55.8
43.5
39.2
34.6*
25.7
26.3*
30.9
20.7*
(*) 2013 data
revised for
comparison
purposes
2015
2014
2013
Technical account results
Pre-tax results
Post-tax results
PERFORMANCE IN 2015
CESCE achieved a net profit after taxes of €30.9 million in 2015, 29% less than in 2014 owing to a claim of
significant proportions: Abengoa. As a consequence of their pre-bankruptcy status, pre-tax profit lodged at
€39.2 million (-29.7%), while the technical results were 25.7 million euros (-49%).
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4.2.1. Credit insurance and
solutions, consultancy and
sureties
The €30.9 million net profit made in the 2015
financial year represents an earned
premium margin of 25%
CESCE’s business continued demonstrating its strength in 2015, despite
the impact of the Abengoa claim and strong competition in the insurance
sector.
The main business indicators were maintained within the target levels thanks
to the commercial effort exerted throughout the financial year, continuous
improvement of CESCE’s management system and the company’s unique
risk prediction model based on analytic knowledge.
The combined direct insurance ratio excluding reinsurance cessions (an
indicator measuring the technical profitability of non-life insurance) provided one of the best results in the sector, rising from 71% to 83% in 2015
and remaining under the 95% target threshold for the sixth consecutive
year. This was an outstanding achievement taking into account the current
state of the market characterised by downward prices.
The commercial strategy pursued by the company in the 2015 financial
year, which was based on increasing its knowledge about its customers
to provide solutions to their problems throughout the business cycle via
CESCE MASTER ORO, generated an increase in the number of current
policies by 8.6%. However, the fall in prices necessary to tackle strong
competition within the sector brought with it a reduction of the premiums
accrued during the financial year.
One large claim, Abengoa, raised the claims ratio to 76% at the end of the
financial year, way above the predicted target and the 2014 figure of 28%.
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The impact of the Abengoa claim represented 49% of the ratio, the claim
frequency rate standing at 28%, lower than the previous financial year. This
improvement occurred within the framework of progressive refinement of
the risk prediction tools enabling the company to anticipate events and to
adapt its decision-making.
The Abengoa claim entailed the application of the excess-loss coverage
provided for through reinsurance ceded.
Within these parameters, in the 2015 financial year CESCE made a net profit
of €30.9 million, representing an earned premium margin of 25%.
Premiums
Premiums accrued from direct insurance fell 16.5% to €122 million. Of this
total sum, 61% corresponded to domestic credit, 28% to export credit, 6%
to premiums sold in the French and Portuguese branches and the other
5% to sureties.
Domestic credit premiums amounted to €75.1 million (-20%), export credit
premiums stood at €33.6 million (-7%), direct insurance policies taken out
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2015
CESCE
Insurance
issued on
own behalf
27,830
23,258
25,452
169.2
151.3
125.0
2013
Claims
rate
Revenue
from premium
earned
2014
2015
2013
Net
equity
76%
59%
BY PERCENTAGE
373.1
2014
399.4
2015
410.9
28%
2013
2014
2015
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The number of policies grew 8.6%,
although premiums fell in the general
climate of falling prices
in European branches amounted to €7.6 million, and premiums accrued
corresponding to sureties stood at €5.7 million.
Direct insurance premium earned (premiums accrued after the corresponding accruals) amounted to €125 million, a reduction of 17.4% on the
previous year.
The drop in premiums was due to falling prices following market trends,
since the number of policies grew 8.6%.
The higher number of policies taken out was due to the strengthening
of the Pay Per Cover and Full Cover modalities of the CESCE MASTER
ORO solution, an added-value proposal conceptually and technologically
far ahead of any of its competitors’ proposals. Also contributing was the
strengthening of CESCE CLASSIC –a product designed for customers who
only require insurance cover–, the consolidation of financing solutions
with financial institutions, and the growing popularity of the CESCE Fondo
Apoyo a Empresas (Business Support Fund).
Claims
Total claims from direct insurance and admitted reinsurance (the latter being
barely significant) amounted to €101 million in the 2015 financial year, 123%
higher than the previous year. This significant increase is fundamentally
due to the Abengoa claim.
due to the frequent claims ratio, a lower rate than the previous financial
year (28%).
The reduction in the frequent claims ratio occurred within the framework
of progressive refinement of the risk prediction tools enabling the company
to anticipate events and to adapt its decision-making, marketed under the
name of Risk Management.
Capital and solvency
On 31 December 2015, CESCE’s net equity amounted to €410.9 million,
compared to €399.4 million the previous year, confirming yet again the
growing financial solidity of the company.
In turn, total claims for 2015, excluding reinsurance ceded and including
internal costs attributable to benefits or claims, amounted to €47.3 million,
17% higher than in the previous financial year.
In terms of static solvency, represented by calculating the coverage of
technical provisions, CESCE has ample surplus cover of €331.2 million,
representing 132% of total technical provisions.
The claims ratio at the end of the 2015 financial year amounted to 76%, of
which 49% was due to the aforementioned Abengoa claim and 27% was
In terms of dynamic solvency, determined by the minimum solvency margin
and its comparison with uncommitted equity, it should be noted that on
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31 December CESCE continued to hold a significant surplus in its
solvency margin, amounting to €270 million and representing 14.7
times its minimum amount of €18.3 million.
The new technical requirements on the necessary minimum capital and solvency of insurance companies, known as “Solvency II”,
come fully into force in 2016. However, at the end of the 2015
financial year the “Solvency I” EU rules were in force and were
incorporated into Spanish legislation. These rules referred to
the calculation and coverage of technical provisions (static solvency) and the solvency margin and guarantee fund (dynamic
solvency).
Capital gains accrued in CESCE’s financial assets portfolio amounted to €53.5 million, an 18.4% fall on the previous financial year.
Of this amount, €37.5 million pertained to equity in non-group
and non-affiliate companies and €16 million pertained to debt
securities.
Coverage of technical
provisions and solvency margin
Number of times the
maximum amount
(left axis)
Excess coverage of
technical provisions
as a percentage (right axis)
200%
20
18
14.7
16
14
132%
12
Tax deductions for R&D&i
10
The company continued with its R&D&i-focused strategy, committing itself to innovation.
The projects initiated during the financial year have been fundamentally customer-focused, including the development of tools
and information designed to improve commercial decision-making
as well as new products aimed at meeting market needs. CESCE
also continued to pay special attention to the optimisation of internal
processes in order to ensure cost savings and improved efficiency.
The effort was compensated with tax deductions, as some of the
investments made were recognised as technological innovations.
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150%
XXX
100%
8
6
50%
4
2
0
0
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4.2.2. Spanish Export Credit
Agency (ECA)
In 2015, CESCE stopped covering risks on behalf of the State and risks
on its own account under one single contract. Hence, while under
the whole-turnover modalities the State used to assume the political
or extraordinary risks and the company the commercial risks, now all
risks are covered on CESCE’s own account without any support from
the State.
This has had a clear impact on the overall contracting figures. The value
of transactions insured with State support stood below €5 billion for the
first time in decades. It is worth remembering that this figure reflects the
aggregate value of all export contracts which have benefited from some
type of insurance cover granted on behalf of the State. The total insurance
figure was also lower than in previous years, as the whole-turnover policies
under which the State assumed the political or extraordinary risks are no
longer calculated for the State account. These policies had represented
€3-3.5 billion per year, but in this last financial year they amounted to less
than €500 million.
Total insurance issued in 2015 was €2.641 billion. Based solely on individual
transactions, insurance issued amounted to €2.167 billion. The latter is the
figure allocated under the annual limit set by the State General Budget Law
for contracting new transactions on behalf of the State.
To put this into context, it is worth noting the average contracting figure
for individual policies during the first decade of the century was around
€1.6 billion. After a sudden but temporary increase up to €4 billion per year
during the economic crisis, it returned to the aforementioned average
levels from 2013.
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In 2015 new contracting clearly stood high among past figures. Also worth
mentioning is the recovery of Buyer Credit which once again became the
most popular modality, leaving sureties in second position.
The 2015 results (both in volume and composition) were heavily skewed
by the signing of a single new contract covering the financing of the STAR
refinery project in Turkey (referred to below), which was responsible for
40% of the total new contracting in the year.
Premiums accrued by the State in 2015 amounted to €151 million
and double the previous year’s figure. Following the same trend
were premiums actually collected during the financial year, including premiums contracted in previous years payment of which had
been deferred to be received this year, representing €166 million.
Performance of insurance
by type of coverage
The following chart displays the performance of insurance by type of
coverage.
BUYER CREDIT
• CESCE insures the bank which grants a credit to the foreign buyer
of goods and/or services of Spanish origin.
• The risk covered is credit default by the foreign debtor or, if so,
its guarantor.
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As stated above, Buyer Credit insurance was once again the product most
taken out. Insurance issued under this modality was €1.679 billion, 77%
of all individual policies taken out. This result confirms forecasts made at
the end of the previous financial year, which noted the recovery of credit
and therefore greater demand for insurance after several years of decline.
Buyer Credit insurance was once again the most popular
product, the figure issued in Euros representing 77%
of all the new individual policies taken out
Liquidity has returned to markets and prices have fallen, the products and
services offered by national and international banks returning to normal.
Good debtors and/or projects get access to finance without problems,
although that is not the case for every debtor and/or project. The truth is
that the products and services offered have become more selective, which
seems to be due not just to a problem of capacity but rather more to
internal competition at the heart of institutions themselves in the struggle
for profitability and the distribution of capital.
Premiums
accrued on
behalf of the State
151,0
Insurance
issued on
behalf of the State
72,5
75,4
4,676
4,134
2,641
1,696
1,680
2,167
Insurance
issued excluding
Whole-Turnover Policy
2013
2014
2015
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Half of Buyer Credit contracting was attributable to the STAR refinery in
Turkey, making that country the leading destination for CESCE’s insurance in 2015. Angola lost first place but stays in second, remaining the
country with the fourth highest concentration of risk in our portfolio.
BONDS OR GUARANTEES
CESCE offers two types of bond coverages:
• Exporters bond insurance covers the orderer against the
improper enforcement of the bond or enforcement due to
the suspension of a contract as a consequence of events
of a political or catastrophic nature.
• Guarantors bond insurance covers the issuer of a bond,
surety or guarantee against the exporter’s default on the
credit arising in the event of enforcement of the guarantee.
Since the beginning of the crisis, Guarantor’s Bond Insurance has
been one of the products Spanish companies have most resorted to,
CESCE’s involvement being on many occasions the essential condition for the issue of the necessary guarantees, whether due to the
financial situation of the applicant or the amounts of the transactions.
For more than a year we have noted an increase in the products
and services offered by banks and a gradual improvement in the
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Financing of working capital has been
included under the umbrella
of the SME Bonds Line
SME Bond
Facility
1
quality of the balance sheets of many of the applicants for guarantees,
leading to a more moderate perception of risk. Consequently, the
need for CESCE’s coverages has declined. Even so, this product
continues to be the second most used of those offered by CESCE
on behalf of the State.
Bond insurance issued in 2015 amounted to €342 million, a figure
much lower than that recorded at the beginning of the crisis. The
decrease in bond insurance taken out is not only due to a lower number of transactions but also to transactions being smaller in themselves
and, above all, to CESCE participating with a lower percentage in the
risk.. Effectively, we have returned to pre-crisis standards, according
to which coverage of the risks is shared 50/50 between CESCE and
the insured banks, except in special cases.
2
Sum total of the facility:
up to €100 million.
Characteristics of the beneficiaries:
Companies:
- with sufficient capacity to execute the project and
technical references;
- immersed in an internationalisation process.
Simultaneously meeting one of the two following criteria:
- balance sheets affected by the crisis in the domestic
market.
- recently created and with limited access to bank credit.
3
Cover percentage: 50%. Higher percentages
are determined case by case.
4
Types of guarantees: any related to an export
contract (e.g. tenders, advance payments,
performance, etc.).
SME Bonding Facility
The SME bonding facility established by the Administration in 2013
remains active, more than 70 transactions having been approved to
date. New contracts under this line continue to encompass projects
from very diverse sectors.
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In the 2015 financial year the instrument
generated a net profit of
€191 million
Breakdown of
insurance issued
by country 2015
BY PERCENTAGE
37% Turkey
15% Spain
Recently the Administration authorised as a new initiative that working capital financing transactions enter under the umbrella of this
facility, permitting support to be extended not only to the obtention
of guarantees but also of working capital, no less crucial to the viability
of many projects.
8% Angola
Other insurance modalities
7% Italy
Other insurance modalities once again accounted for a marginal number of total new contracts. The sum of all coverages, with the exception
of Buyer Credit and Bonds, was a moderate €145 million or 7% of the
total. This figure can be broken down as follows: Documentary Credit
confirmation €52 million; Supplier Credit (mainly short-term) just over €60
million; Works Abroad €20 million and Bank Guarantees (pre-financing)
€13 million.
7% Uzbekistan
5% Ecuador
3,7% Netherlands
Other 13,9%
Cuba 2%
3,4% Kenya
3,4% Dominican
Republic
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Breakdown of insurance by country
In 2015 the main destination of insurance on behalf of the State was Turkey,
with 37% of the total due to the unique STAR transaction. Far behind was
Angola, the second largest insurance destination with 8%, followed by Italy
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The most significant claims payment of the financial
year was linked to one transaction in the USA,
which amounted to €38.2 million
expenses). Recoveries rose slightly to €123 million and claims increased
significantly to €64 million, tripling the figure for 2014 and vastly exceeding
the average for previous years. To put these figures into context once
again, it is worth pointing out that throughout the last decade indemnities
paid averaged €38 million (if we extend the period to the latest 15 years
the average jumps to almost €80 million).
The positive trend over recent years in the claims figure was broken in the
2015 financial year by a significant increase in indemnifications.
in third position. Uzbekistan was fourth, being the destination of an Airbus
aeroplane sale. Ecuador occupied fifth position this year, followed in sixth
to tenth places by the Netherlands, the Dominican Republic, Kenya, Cuba
and Mexico respectively.
A characteristic of new contracts in 2015 was the issue of several largescale transactions. Indeed, the geographical breakdown to a large extent
reflects the performance of individual transactions. Among the top ten
insurance destinations the only countries with multiple issues were
Angola, Cuba and Mexico. In the other countries mentioned, the figure
reflects the performance of a single transaction.
Cash flow in 2015
Once again, cash flow resulting from the issue of insurance was positive.
In 2015 the instrument generated a net profit of €191 million. This net
profit was the result of subtracting indemnities paid and management
expenses from the revenue generated from premiums and recoveries.
All figures increased compared to previous years. Premiums collected
rose 66% to €166 million (this figure is gross, i.e. before management
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In 2015 claims paid on behalf of the State rose to €64.6 million, representing an increase of 168% over the €24.1 million of the previous
financial year.
Unlike the previous year, in 2015 Iran was not the main country responsible for indemnities paid to insured parties, that mantle being taken by
Poland and notably the United States.
Regarding Poland, €9.7 million were paid out related to the modification
of the payment schedule proposed by the debtor company. At the same
time, a debt restructuring agreement was reached which should allow
a significant amount of the indemnities paid to be recovered in future.
However, the most significant payment of the financial year is linked
to a transaction in the USA under the investment insurance modality
which involved a €38.2 million claim being provisionally indemnified by
CESCE, the matter being sub judice while the validity of the coverage
is contested.
Mexico ranks third with €3.3 million indemnified (15% of the total). This
amount is predominantly due to a transaction performed several years
ago (a bio-ethanol processing plant not accepted by the debtor), with
regard to which recovery is being pursued through the Mexican courts.
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The need for CESCE’s coverages
decreased due to the larger range of products and
services offered by the banks
five years with deadlines for the payment of varying amounts and enables
consolidation (and restructuring) of the whole of the accumulated debt
including interest on arrears.
With regard to Iran, not only was it not responsible for any claims entailing payments of indemnities in 2015, it also contributed towards the
aforementioned profits through recoveries amounting to €7.3 million,
reducing the volume of unpaid capital substantially. The complete return
of banking operations to normal, after the recently approved lifting of
sanctions, should enable outstanding amounts to be recovered over the
coming months.
The total amount recovered in the financial year amounted to €123 million,
representing a rise of 7% on the preceding financial year. On this occasion
a significant part of the year’s recoveries (86.5% of the total) related to the
Paris Club’s current refinancing programmes. Despite the difficulties arising
from the international crisis, the debtors involved in these programmes
performed satisfactorily during the financial year.
Finally, given its importance, it is worth highlighting the successful signing
of a restructuring agreement between Cuba and its Group of Creditors in
the Paris Club. The agreement reached has enabled the refinancing over
many years of accumulated debt pertaining to medium and long-term
transactions.
Again it is worth highlighting that Egypt’s payment performance (€53.2
million recovered) was good during the year, meeting each deadline properly despite its complicated political situation.
CESCE has also signed a short-term debt restructuring agreement with the
National Bank of Cuba, enabling the amounts accrued under this category
of debt to be reprogrammed over 10 years.
The recoveries obtained from Indonesia, the Dominican Republic and Iraq
amounting to €15.8 million (12.8% of the total) also pertained to refinancing
programmes, their deadlines being properly met.
Risk portfolio
At the end of the financial year, the value of the risk portfolio amounted to
€16.289 billion, a little higher than the previous year.
After the agreement reached in the Paris Club with its creditors, Argentina
properly met its scheduled obligations, which involved the repayment of
€27.8 million.
The bulk of the portfolio pertains to the current exposures (committed
capital pending maturity) which this year grew compared to the closing
figures of the previous two years, standing at €14.11 billion.
Remember that the programme, which puts an end to a long period of
persistent default by Argentina, includes ad hoc treatment extending for
Capital unpaid fell significantly from €807 million to €674 million while
refinanced capital increased by an equal amount. This transfer of amounts
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At the end of the financial year, the value of the risk
portfolio amounted to €16.289 billion,
a little higher than 2014
Exposure
by country
BY PERCENTAGE
Spain 13%
from one entry to another is due to the refinancing of two of the countries
accumulating major overdue debts , Cuba and Argentina, as mentioned
above.
Turkey
13%
The main refinancing agreements pending payment are currently with the
following countries: Egypt, Argentina, Cuba, the Dominican Republic, Iraq
and Indonesia. The total amount refinanced is €2.1 billion.
In short, over two decades the instrument has maintained a net surplus and
we expect to continue to produce this result in the near future. CESCE’s
portfolio is diversified both in terms of its geographical spread and in terms
of its debtors. The country risk average has been improving over the years
and currently stands at around 3.5 out of 7, according to the OECD’s classification.
Mexico
10%
Saudi Arabia
10%
The increase in the importance of Buyer Credit transactions is a positive
indicator, since in the event of a claim, payments are diluted throughout
the life of the credit which is usually over the long term, unlike under other
modalities where claims may be more immediate in time.
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38% Other
Angola 8%
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8% Cuba
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RESPONSIBILITY
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5
Corporate
Responsibility
5.1 CESCE, A RESPONSIBLE COMPANY
5.2 COMMITMENT TO ITS STAKEHOLDERS
5.2.1 Employees
5.2.2 Customers
5.2.3 Suppliers
5.2.4 Community
5.3 COMMITMENT TO THE ENVIRONMENT
5.3.1 Environmental quality in CESCE
5.3.2 The environment in projects on behalf of the State
5.4 COMMITMENT TO GOOD GOVERNANCE
5.4.1 Governing bodies
5.4.2 Ethical framework
5.4.3 Risk management
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CESCE, a responsible
company
CESCE performs its insurance and financial
activities based on economic, social and
environmental criteria. Its day-to-day
business is inspired by widely acknowledged
fundamental rights and five values of its
own: innovation, support for economic
activity and internationalisation, customer
commitment, ethical and responsible conduct,
and commitment to people. In 2015 it took a
major step forward in terms of its social and
environmental commitment by becoming a
member of the UN Global Compact.
5.1
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CESCE is aware of the importance of responsible behaviour in its leadership of the credit and sureties sector and the significant role it plays
as a Managing Agent of internationalisation risks on behalf of the Spanish state, work it performs in accordance with the recommendations
of the Organisation for Cooperation and Economic Development
(OECD).
As a socially responsible company, CESCE signed the UN Global
Compact in 2011. The aim of this international initiative is to secure
the willing commitment of organisations to social responsibility by
means of the implementation of ten principles based on human
rights, labour rights, respect for the environment and the fight against
corruption, principles which enjoy universal consensus.
Principles of
the UN Global Compact
Human
Rights
Principle 2. Businesses should take steps to ensure
they are not complicit in human rights abuses.
Labour
CESCE’s day-to-day activity is governed by five values intrinsic to
the company since its creation and listed in its Ethical Code.
Principle 5. Businesses should support the effective
abolition of child labour.
Principle 6. Businesses should support the elimination
of discrimination in respect of employment and
occupation.
The
Environment
72
Principle 7. Businesses should uphold a
precautionary approach to environmental
challenges.
Principle 8. Businesses should undertake initiatives to
promote greater environmental responsibility.
Innovation
CESCE understands innovation to mean looking at business in
a different way. Through innovation, we reinvent our processes,
products and systems, simplifying them and making them more
efficient and scalable, which generates more profitability as well
as the flexibility to adapt to a changing environment.
Principle 3. Businesses should uphold the freedom of
association and the effective recognition of the right
to collective bargaining.
Principle 4. Businesses should support the elimination
of all forms of forced and compulsory labour.
In 2015, CESCE strengthened its commitment to the Global
Compact’s Principles by changing its status to member of the Global
Compact, which will enable it to contribute more actively along with
other leading companies to initiatives launched by the organisation
to promote sustainable development.
Values
Principle 1. Businesses should support and respect the
protection of internationally proclaimed human rights
within their sphere of influence.
Principle 9. Businesses should encourage the
development and diffusion of environmentally
friendly technologies.
Anti-corruption
Principle 10. Businesses should work against
corruption in all its forms, including extortion and
bribery.
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Support for economic activity and internationalisation
CESCE supports economic activity by making commercial transactions secure
on a national and international level, thus facilitating the development of companies and countries and generating value for its stakeholders via comprehensive management of commercial risk, information and specific technology.
Commitment to the customer
CESCE creates products which generate value for its customers and are
adapted to their needs, indeed often anticipate their needs, offering a quality service and using cutting-edge technology communication channels.
Ethical and responsible conduct
The actions of CESCE and of its employees are not only governed by
strict compliance with the law, but by compliance with ethical values.
These values govern both the company’s activity, which is committed
to social responsibility, human rights, the environment and society,
and the conduct of employees, which is based on loyalty, honesty,
responsibility and integrity. This conduct must be reflected both in the
company’s own activity and the transactions and projects it supports.
Commitment to people
CESCE promotes equality, provides healthy working environments
devoid of discrimination and offers personal and professional development opportunities.
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Commitment to its
stakeholders
5.2
CESCE corporate objectives include meeting the legitimate
expectations of its main stakeholders (employees, customers,
suppliers and the community) in a balanced manner. To
achieve that objective, as the result of a dialogue and listening
process, CESCE has defined guidelines based on respect,
professionalism and transparency.
5.2.1 Employees
On 31 December 2015, the CESCE Group’s workforce comprised 1,463
professionals working for the CESCE parent company and its Latin American
subsidiaries, Informa D&B and CTI.
Broken down by geographical region, a total of 384 employees across the
whole Group’s companies (or almost 26% of the workforce) work outside
Spain: 137 in Portugal and 247 in Latin American subsidiaries (206 in CESCE
subsidiaries and 41 in Informa D&B subsidiaries).
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Through the operational and commercial integration of the company, the Latin
American subsidiaries have adapted the parent company’s Human Resources
model, building an integrated and multicultural team representative of the
various communities to which it offers its services.
Evidence of this global integration project is the development by the subsidiaries of a Talent Identification and Evaluation Project for the work teams during
2015. Through this programme, information is extracted on the functional
content of each post, skills are evaluated, training and development guidelines
are produced, performance and potential ratings are calculated, and rules
established for succession to key posts.
The purpose of this initiative is to align HR practices to the needs of the
business, establishing professional development plans permitting everyone
to bolster their skills in order to meet the demands of their job and to
successfully tackle any other professional opportunities which may arise.
Furthermore, in the 2015 financial year reorganisation of Grupo CESCE
Servicios Tecnológicos (GCST) was completed with the transfer of its
technological and service infrastructure to IBM and employees to IBM,
CESCE and the Group’s other companies.
GCST
Headcount of
CESCE and its
subsidiaries
Latin America
CTI
Informa
CESCE
1,472
1,463
1,457
48
11
0
228
203
206
185
241
253
544
541
547
467
461
457
CESCE’s workforce in Spain
CESCE España had 440 employees at the end of the 2015 financial year.
This workforce is characterised by its high level of specialisation and qualifications. More than half the staff are graduates (52%), 14% have diplomas
and 34% have been trained at intermediate level.
CESCE values professional experience and knowledge of the company. Therefore,
it tries to retain talent by providing a stimulating working environment and training
enabling its employees to grow professionally. In 2015 these conditions meant the
company’s average years’ of service was 21 and the average age was 49.
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Almost 60% of CESCE’s
workforce are women
Equality of opportunity and non-discrimination
As a member of the UN Global Compact, CESCE supports the abolition of
discriminatory practices at work and promotes equality between workers
regardless of their race, gender, origin, beliefs or social status.
The percentage of women employees remained higher than the insurance
sector average, the workforce comprising 182 men (41.4%) and 258 women
(58.6%).
CESCE’s working conditions are governed by the insurance sector’s collective bargaining agreement (General State Collective Bargaining Agreement
for Insurance and Reinsurance Companies and Mutual Funds for Accidents
at Work). Added to this general framework are agreements reached with
Workers’ Legal Representatives which have improved different aspects of
the collective bargaining agreement.
The company keeps in regular contact with trade union representatives
through statutory meetings of the Health and Safety at Work Committee,
the Social Benefits Committee, the Pension Plan Control Committee, the
Training Committee, the Equality Plan Committee, etc.
In 2015 elections were held for workers’ representatives. This year no
noteworthy agreement was made with trade union representatives.
The relationship between the company and its employees is framed by strict
compliance with legislation and the labour principles of the UN Global
Compact. As a member of the organisation, CESCE supports freedom of
association and the right to collective bargaining, rejects any form of child
or forced labour, and prohibits labour discrimination.
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The company formalised this commitment in its “Zero Tolerance Policy
towards Discrimination” drafted in 2008, through which it adheres to the
European Framework Agreement on Harassment and Violence in the
Workplace and undertakes to prevent any discriminatory practices on the
grounds of race, sex, religion or belief, and any form of sexual harassment,
workplace bullying, or degrading or humiliating treatment.
To strengthen this commitment, the company has also provided a Procedure for Managing Discriminatory Situations or Situations Undermining
Workers’ Rights, which forms part of the Company’s internal regulations
and is made available to all employees via the corporate intranet. In 2015,
no cases were opened relating to discriminatory practices or harassment.
This equal opportunities and non-discrimination policy involves recruitment
into the workforce of disabled people. At the end of the financial year,
11 people with a registered disability worked for CESCE in Spain, a figure
higher than that required by the Law on Social Integration of Disabled
People (LISMI).
In terms of breakdown by gender, women accounted for 58.6% of the
workforce and their presence in key posts is higher than the sector average. The percentage of women belonging to the Senior Management
Committee is 27%.
In order to ensure genuine equality of opportunity between men and
women, CESCE has drawn up an Equality Plan introducing changes to
the management of working time, the prevention of sexual harassment
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and gender violence, etc. It is currently being reviewed by the Workers’
Legal Representatives.
Measures promoting work/life balance include two different ways of
managing existing working time: a general full-time (continuous) working
day and a special working day (“split” in winter and intensive in summer),
both with flexible working hours. In 2015, 30% of the workforce opted
for the general working day, its regulation of working time favouring
work/life balance. There is also a shorter working day for legal guardians.
Training in CESCE
during 2015
Measures on flexibility of working hours and the ability to postpone holidays until the following year, both implemented by the Equality Plan, are
widely welcomed and used by the workforce.
Hours devoted to training:
5,978
Training
CESCE believes training is an essential tool to meeting both its corporate
objectives and employees’ aspirations.
Hours of training as % of total hours:
0.75 %
Every year the company produces an Annual Training Plan prepared on the
basis of content proposed by the HR Development Unit resulting from a survey
of the workforce. That survey asks employees to vote on which courses would
be most interesting to them and to propose other possible training activities.
Average training time per employee:
In 2015, CESCE invested €116,044 (plus the cost of the time dedicated) in the
Annual Training Plan, which covers three types of courses:
13.5 horas
Participating employees:
55.9%
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•
Corporate training to develop key skills for the business.
•
Specifically tailored training to accompany the professional development
of people holding key positions in the organisation and meet their particular training needs.
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The company subsidises CESCE’s Grupo de Empresa
to perform, among others, cultural, sporting and
family activities
training plans and establishes channels of communication with employees besides its dialogue with them through the Workers’ Legal Representatives.
To retain the best talent, the company offers its employees a competitive salary and a set of social benefits such as life insurance and pension plans, mortgage loans, study grants, college grants for employees’
children, subsistence and transport allowances, and subsidised health
insurance.
•
Individual study grants to support the professional development of
employees.
A total of 247 CESCE employees received training, the majority being female
(64% of attendees).
One new development worth highlighting is the set of recap videos available to employees on the corporate intranet in the form of manuals, videos
which resulted from the training sessions on products and services delivered
by the company’s personnel.
CESCE’s training activity also extends to students of other higher education centres, who are given the opportunity to take up internships in
the company. Hence the second edition of the “Financial Institutions and
Internationalisation Placement Programme” was organised with ICEX, and
educational cooperation agreements involving internships were maintained
with the Universidad Pontificia de Comillas, the Autonomous University of
Madrid and King Juan Carlos University.
Talent management
The company offers its workers a stable working environment in which
to grow professionally. It provides continuous education through annual
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To support its employees and their families, the company subsidises the
CESCE Grupo de Empresa , which organises cultural, sporting, family and
travel activities, etc.
In order to keep its workforce motivated and meet its corporate objectives,
the company is committed to job security. In this regard, whenever possible to do so without contravening the State General Budget Law to which
it is subject, the company has converted temporary jobs into permanent
jobs through the recruitment into the workforce of students of the Young
Graduates’ Programme developed in 2011.
This programme, deemed strategic by the company’s Senior Management,
is the result of the educational cooperation agreement between CESCE and
the Business School of the Universidad Antonio de Nebrija, and consists
of theoretical education provided by the university and theoretical and
practical training in the insurance sector delivered by CESCE.
Health and Safety at Work
CESCE is committed to the health and safety of its workers and complies
with current legislation on occupational risk prevention. In this regard, the
company possesses an Occupational Risk Prevention Service provided by
an external company which provides support on preventive work.
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CESCE has converted temporary jobs into permanent
jobs through the recruitment into the workforce of
students of the Young Graduates’ Programme
There is also a Health and Safety Committee responsible for occupational
risk prevention and the reduction of accidents at work. Among other commitments, this committee ensures the application of ergonomic measures
to the working conditions of each employee, and specifically monitors
proper use of computers and other IT devices.
In 2015 CESCE performed a set of activities designed to protect the
health of its employees and to improve safety conditions in its workplaces, which were accompanied by specific communication campaigns.
In the interest of maintaining a safe and healthy working environment,
it performed an occupational risk assessment of its corporate headquarters and branches, an assessment which included environmental
measurements for each workstation of temperature, humidity, light, etc.
In October it also satisfactorily performed a simulated evacuation of its corporate headquarters.
In 2014-15 CESCE performed the third Psycho-Social Risk Assessment designed
to ascertain the level of satisfaction of its employees with their specific working
conditions in the different areas.
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Always taking a preventive approach, CESCE
promotes healthy habits and performs awarenessraising activities regarding specific illnesses
were published on the company’s intranet inviting their colleagues to get
the appropriate preventive checks.
Other courses were also delivered on health and safety at work: “Stress
Management and Personal Energy” (8 hours, 29 participants); “Emotional
Intelligence” (8 hours, 22 participants); “Communication and Interpersonal
Relationships” (24 hours, 11 participants); and “Recapitalising Internal Energy”
(8 hours, 36 participants).
Communication channels
CESCE’s employees also receive specific training on safety at work. In
2015, it delivered a three-hour classroom training session on occupational risk prevention to the whole workforce of its headquarters. During
the session, occupational risk prevention measures were explained in
detail and basic procedural guidelines in case of emergency were provided. Employees were also presented with fact sheets on risks related
to their workstations.
During 2015 there were 7 slight accidents, all in transit. With regard to road
safety, it is worth highlighting the new internal campaign disseminating
information about the new legislation on children in cars.
CESCE has opened up several communication channels with its employees, in order to create a climate of trust based on dialogue and transparency.
Communication is essentially based on two spheres of activity, the hierarchical structure and the “Todos en Grupo” (everybody in the group) global
intranet, supplemented by other channels such as corporate newsletters,
bulletin boards and email announcements. The workforce also has other
channels through which to raise queries or conflicts regarding their rights
at work: the chain of command, the Human Resources Department and
the Workers’ Legal Representatives.
As part of the company’s Health Monitoring Plan 250 health checks were
performed, these annual medicals being free to CESCE workers and noncompulsory. The seventh Common Flu Vaccination Campaign was arranged, 53 employees taking part.
In 2015, internal communication initiatives revolved around three axes:
•
Information on new legislation relating to credit insurance and the
privatisation process.
Always taking a preventive approach, the company promotes healthy habits
and performs awareness-raising activities regarding specific illnesses. In
2015 the Healthy Breakfast Campaign and the Breast Cancer Prevention
Campaign exemplified this approach. As in previous years, the latter initiative
involved employees affected by the conditions, whose first-hand accounts
•
Supporting business and customer knowledge through the publication
of videos resulting from the training sessions on Company products.
With regard to customers, in order to encourage the workforce to be
more customer-focussed, a communication channel was created on
important customers to CESCE.
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Communication revolves around two spheres: on
the one hand, the hierarchical structure, and on the
other hand, the global “Todos en Grupo” intranet
During 2015 it published 778 items of corporate and Spanish content and
136 items of Latin American content, those items appearing on a common
desktop uniting applications, information and corporate and local policies
with news and transversal working groups.
In 2015, the results of the 2014 survey performed in Latin America on the
Perception of the Corporate Intranet and internal communication were
disseminated and improvement plans established.
•
Supporting the digitalisation of the Company through the development
of specific campaigns essentially focussed on data security, on the
adoption of the Google platform, and on the digital future.
Finally, to facilitate integration into the corporate culture of new employees
hired in Latin America, CESCE designed a welcome procedure common
for all countries as well as an online introduction to the intranet and its
contents.
These axes structure both the organisation of specific training sessions (the
majority also resulting in videos) and the publication of articles and news
items on the Corporate Intranet.
Traditional mechanisms for coordinating and disseminating communications down the line to the workforce such as the Board of Directors, the
Sales Convention, the General Shareholders’ Meeting and the Christmas
Cocktail Party, were also utilised.
The “Todos en Grupo” intranet reflects the idea of a global
company
In the 2015 financial year, it continued to support CESCE’s integration and
cultural change process. Common to all employees in Spain, Portugal and
Latin America, this platform permits the new global business model to be
disseminated and understood, and a sense of belonging to CESCE as a
group to be developed.
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5.2.2 Customers
CESCE has more than 140,000 customers. Identification and coverage of
their needs in all phases of the business cycle and constant improvement of
their experience are priorities for the company.
Besides providing customers with high-added value solutions and commercial services, CESCE supports entrepreneurship and internationalisation
through the intense provision of training and information delivered via different types of institutional activities and publications.
The companies comprising CESCE’s extensive customer portfolio come
in several sizes, belong to different sectors, and originate in various geographic regions.
Regardless of the sector or country in which they operate, CESCE maintains a “partnership” relationship with its customers: they provide CESCE
data on their business, sales and recoveries, while CESCE processes all
that information together with data contained in other databases to help
CESCE’s customers find their own new customers and manage their risks.
Thanks to extensive knowledge of its customers and massive analysis
of millions of companies’ data, CESCE is equipped to offer credit and
financing management solutions which are unique in the marketplace
along with a flexible, rapid and effective service.
Customers access these solutions via a multi-channel commercial system.
Using the CESNET platform, customers can manage their risk portfolios over
the internet from anywhere in the world, while benefiting from the direct personal channels provided by CESCE: the telephone helpline and the company’s
24 sales offices and 125 agents dispersed throughout Europe and Latin America.
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CESCE’s blog “Asesores de Pymes” (SME Advisors) offers entrepreneurs a
daily article containing information relevant to their businesses and weekly
summaries of the most important international news developments selected by the company’s Country Risk Department’s expert analysts.
Training and information for entrepreneurs
CESCE provides training and information through regular publications and
institutional activities.
Each year, the company publishes an analysis of the current situation entitled “Panorama Internacional” (International Outlook) and its “Informe Sectorial de la Economía Española” (Sector Report on the Spanish Economy), a
detailed description of the state of each sector which includes documented
insights into those sectors. These publications help entrepreneurs understand the reality of the current situation better and consequently make better
decisions on commercial risks.
At the same time, CESCE organises talks and institutional activities providing training to entrepreneurs on the best ways to expand their businesses
internationally, the management of commercial risk, and the various alternatives for accessing credit.
Institutional activity
In 2015 CESCE performed 70 institutional activities of different types
throughout the whole of Spain.
A modern and easy-to-use corporate web
To improve its image and make it easier for its
customers to get information on the company,
CESCE launched a new corporate website in
2015. The design of the site is more consistent
with the corporate image, it is easy to use and
it can be accessed through any mobile device.
Customers can get access to the CESNET platform through the website.
Customers can also find all the commercial information in the websites www.cesceseloexplica.
com and www.cesceen3d.com. These platforms
provide interactive visual explanations of how
solutions and services function. Customers can
also find videos of other customers recounting
their experience.
Dialogue through
the social networks
CESCE promotes dialogue with its customers in
the social networks, where according to its Klout
Score it is in a leading position in the insurance
and financial sector in terms of both number of
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followers and the quality of its content and its
publications.
Its corporate Twitter account, the network which
best enables it to interact with its target market,
has published 16,000 tweets and has more
than 111,000 followers. CESCE also promotes
interaction with its customers on other social
networks such as LinkedIn (more than 4,000
followers), YouTube (almost 100 videos and
350,000 plays), Facebook, Instagram, Pinterest,
SlideShare, Google+ and FourSquare.
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Institutional
activities per
category
These activities were supported by miscellaneous business associations and
federations, chambers of commerce, business schools, banks such as Banco
Sabadell (Exports for Growth Programme), and bodies promoting international
trade, CESCE having signed various agreements in 2015 to perform commercial
activities for specific sectors.
14
Trade fairs
Comprehensive commercial
risk management
Institutional activities have had a great impact in the social networks: 23 events
have been retransmitted to an average audience of 134,600 accounts, and
more than 117 photos from these activities have been published.
9
Financing
8
Exports
for growth
8
Entering Collaboration
Agreements
7
Internationalisation
7
Markets
6
FIEM and
State Account
6
Positioning
and branding
CESCE has also participated in 14 trade fairs including Forinvest, Cevisama,
Conxemar and IMEX, the aim being to present its solutions for all types of
companies.
Customer protection
Customer protection is guaranteed by CESCE’s Regulations on the Protection
of the Insured. These regulations, approved by the Board of Directors in November 2006, cover in detail the customer’s rights according to the current
legislation. It is compulsory for every employee of the company to know these
regulations and apply them.
The Department of Relations with the Insured is the CESCE body through
which customers solve possible conflicts with the insurer. Its independence
from CESCE’s Commercial and Technical Departments is guaranteed by the
Regulations themselves.
Department of Relations with the Insured
5
Velázquez, 74 - 28001 Madrid
Tel.: 902 11 10 10 | Email: [email protected]
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Principles to be
followed in tenders
Competition
principle
5.2.3. Suppliers
CESCE has around twenty main suppliers. Ethics, transparency and scrupulous respect for current legislation are the principles governing CESCE’s
relations with every one of them. Suppliers are selected based on objective
technical, professional and financial criteria consistent with the internal
procurement rules established.
Internal procurement rules
As a predominantly publicly-owned company performing an activity in the
public interest, the legal framework governing the company’s contractual
activity is established by Article 192 of the Public Sector Contract Law.
Based on this law, CESCE has established internal rules implementing
a general objective procedure for awarding contracts which meets the
following principles:
•
The competition principle, which ensures that any interested party
can participate in the contract tendering procedure by submitting an
offer or proposal.
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+
Publicity
principle
+
Confidentiality
principle
+
Transparency,
equal treatment and
non-discrimination
•
The publicity principle, which requires that a sufficient number of potential interested parties must know about the call for tender.
•
The confidentiality principle, which guarantees that discretion and prudence are applied when the contract is awarded without the required
publicity harming the successful bidder’s interests.
Other principles applied include transparency, equality of treatment and
non-discrimination, all in accordance with the provisions concerning the
obligations of entities classified as “non-contracting authorities” by the
Public Sector Contract Law.
The company’s large procurement contracts are published on the State
Procurement Platform and on the CESCE website.
As a member of the UN Global Compact, CESCE expects its suppliers
to show integrity and respect for human rights, labour rights and the
environment. Hence, service agreements with suppliers include clauses
requiring respect for the labour rights of their employees, insisting on
payment of Social Security contributions, possession of accidents at work
insurance, fulfilment of all social insurance obligations, etc.
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The company also transposes its commitment to quality and the environment into its bid specifications for supplies and services. Those specifications require submission of ISO 9001 quality certification and ISO
14001 environmental certification among other documents.
CESCE also applies the OECD recommendations on sustainable financing and the rules contained in the Law on Managing Foreign Debt with
Highly-Indebted Countries, in order to prevent excess debt complicating
those countries’ development.
Social campaigns promoted by employees
5.2.4 Community
CESCE has supported projects of a social nature accompanied by internal
campaigns raising awareness amongst its employees and inviting their
involvement.
Both CESCE’s activity as a commercial credit insurer and its work as risk
manager on behalf of the State are important to the community.
•
Blood donations: CESCE has traditionally supported blood donations,
giving its workforce the time to donate their blood. In 2015 two donations were organised: one in January (involving 24 donors) and the
other in June. The latter was the fourth donation in the company
headquarters and involved 25 people. The company has also supported
the donation of platelets for a CESCE employee, granting employees
time off to go to hospital to this end.
•
CESCE’s Fifth Operation Kilo, coordinated with the Madrid Food Bank.
Under the slogan “You donate one kilo, CESCE donates one more”,
the collections on previous occasions were surpassed, 3,380 kilos of
food being donated. In line with CESCE’s commitment to innovation,
the type of manual collection campaign run in the past was replaced
by the creation of a website facilitating virtual donation.
•
First Toy Collection Campaign, under the slogan “This Christmas,
CESCE guarantees toys”. In collaboration with the Fundación Valora
and the Fundación Jarezados and with the involvement of company volunteers, a collection and selection of toys for children of
families in need was conducted in the head office. The volunteers
participated in the presentation ceremony.
In its activity on its own behalf, CESCE helps companies grow and generates
employment by making their business transactions more secure.
In its management on behalf of the State of the internationalisation risks
incurred by Spanish companies, CESCE supports the economy, stability and
social welfare of the developing countries where those Spanish companies
are executing their projects.
CESCE also generates wealth in the communities in which it operates through
the creation of employment, the hiring of suppliers and the payment of taxes.
Guarantor
of human rights
In the projects CESCE ensures on behalf of the State, CESCE acts as
a guarantor of human, labour and environmental rights. Following the
recommendations of the OECD “Common Approaches” Agreement,
coverage of risks is subject to the results of the social and environmental
impact study.
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Commitment to the
environment
Conservation of the environment is a top priority for
CESCE. In its workplaces, it is committed to energy
efficiency, limited use of resources, and minimisation
of waste. It is worth highlighting CESCE’s work to
guarantee respect for the environment in those
projects it insures on behalf of the State: its coverage
is dependent on a positive environmental impact
assessment.
5.3
5.3.1. Environmental quality in
CESCE
As a member of the UN Global Compact and therefore follower of its principles, CESCE protects the environment through a preventive approach,
fostering initiatives encouraging greater environmental responsibility and
promoting the development and dissemination of environmentally friendly
technologies.
The company controls and minimises any negative impact its activity might
involve by means of an Environmental Management System certified under
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CESCE controls the environmental impact of its activity
through an Environmental Management System
certified according to the ISO 14001 Standard
Performance of
the main environmental
indicators
(2013-2015)
2013
2014
2015
9.40
9.59
9.81
2,106.00
2,009.00
2,081.35
Gas consumption
(m³ per employee)
63.91
40.72
40.61
Paper consumption
(kg per employee)
26.01
26.24
18.07
4,363.57
4,012.60
3,962.01
0.49
0.72**
0.60
In 2014, as part of the continuous improvement cycle of its Environmental Management System, CESCE undertook to meet the following targets:
94.01
95.34
90.83
• To reduce the number of copies/printouts per employee by 2%. The
target set in 2014 was repeated, as it was believed there was still room to
reduce paper consumption even more. CESCE managed to reduce the
number of copies/printouts per employee by 1%. The target set of 2% was
not fully met, but CESCE managed to maintain the downward trend already
Water consumption
(m³ per employee)
Energy consumption
(kW per employee)
Copies/printouts
per employee
Consumption of toner
(units per employee)
Recycled paper
(kg per employee)
** In 2014 the multi-use equipment was replaced and the
new equipment uses smaller cartridges.
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the ISO 14001 Standard, implemented in 2004 and integrated into
the ISO 9001 Quality System.
The implementation of this system has involved the introduction of
gradual improvements to the facilities, equipment and processes,
enabling greater energy efficiency, very significant reductions in the
main resource consumption indicators (paper, water, etc.), and more
efficient and responsible management of the waste generated (fluorescent lighting, batteries, toner, paper, etc.). Continuous progress
on energy efficiency also complies with the guidelines of the Cabinet
Agreement of 20 July 2007 on the Energy Savings and Efficiency Plan
for the Administration’s Buildings.
Compliance with targets
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achieved the previous financial year (2014), in which the company cut
consumption by 8%.
•
Incorporate environmental criteria into the IT materials procurement
process. During 2015 new IT equipment was acquired to renew the
stock of computers. Sustainability requirements on energy efficiency and
waste management policy were included in the bid assessment criteria
established in the bid specifications. The same weighting was assigned
to this factor as all the others with the exception of the price criteria.
Target for 2016
CESCE has set a very ambitious target for 2016: to encourage energy
savings in its facilities by installing fixed energy consumption metres which
will enable the use per circuit (lighting and equipment) and per floor by the
different sectors to be ascertained.
Using these measurements an energy audit will be undertaken aimed at
identifying which additional energy-saving measures could be employed in
the company headquarters. The energy audit and resulting measures will be
integrated into a new Energy Management System consistent with the ISO
50001 Standard, which is predicted to be implemented and certified in 2016.
Promotion of responsible conduct
CESCE promotes environmental awareness-raising initiatives for its employees and publicises the progress it makes on this issue.
In 2015, besides encouraging selective recycling of waste (paper, plastics, toner, etc.) and maintaining its commitment to a paperless office, it
replaced the printer paper it had been using by other paper with better
environmental qualities.
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To raise awareness amongst its employees and share information on
progress made regarding the protection of the environment, the company advertised its initiatives in the “Todos en Grupo” intranet. Hence it
announced via that channel the decision to replace the printer paper,
disseminated the results of the annual environmental and quality audits
performed by AENOR on the integrated management system, and
published indicators related to environmental conservation (consumption, waste, etc.).
For the fourth year running, as proof of the commitment of the company
and its employees to the protection of the environment, CESCE participated
in the global Hour of the Planet campaign orchestrated by the WWF. For an
hour the company switched off the internal and external lighting at its headquarters in Madrid and the office of its Segurexpo subsidiary in Colombia.
To raise awareness among the workforce, for the first time in 2015 CESCE
asked its employees to take to the streets and photograph the unlit buildings
during the Hour of the Planet. A compilation was made of 30 photographs
from different cities, which was then sent to the Hour of the Planet organisation to be used in dissemination activities.
5.3.2. The environment
in projects on behalf of the
State
In its activity on behalf of the State, CESCE supports projects promoting
greater environmental responsibility which encourage the development
and dissemination of environmentally-friendly technologies.
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During 2015 it issued four policies
classified as Category A and three policies
classified as Category B
Renewable energy and water projects
Based on this approach to projects executed on behalf of the State and
Annex IV of the OECD Arrangement (the regulatory framework of export
credit insurance), CESCE offers more favourable conditions (mainly longer
repayment terms) to projects involving renewable energy, mitigation of climate change, and water supply, distribution and treatment.
During 2015 one project benefited from the more favourable terms offered
under Annex IV of the OECD Arrangement. This was a wind farm in Mexico
insured for an amount of around US$144 million.
Social and environmental assessment of transactions on behalf of
the State
Within the framework of its work as managing agent of globalisation risks on
behalf of the State and in accordance with the OECD’s “Common Approaches”
Agreement, CESCE assesses the potential environmental and social impact of
all projects applying for cover.
The purpose of this work is to ensure that all projects perform at a high level
consistent with international standards.
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In 2016 the company aims to adapt its social
assessment procedures to the new version of the
“Common Approaches”
Public access during the processing stage
Consistent with the “Common Approaches” guidelines, CESCE provides
public access to social and environmental information of Category A projects during the underwriting process. The company also regularly publishes on its website the list of policies issued for transactions classified as
Category A and B.
Furthermore, the Company provides six-monthly reports to the OECD on
Category A and B transactions resulting in a policy.
The projects are reviewed and classified into three risk categories depending
on the nature and magnitude of the impact they will have on the environment, Category A projects having the maximum impact and Category C
projects having a minimal or non-existent impact.
Regarding Category A and B transactions, CESCE ensures that the projects
meet the World Bank’s environmental and social standards before deciding
whether to grant cover. When granting cover, CESCE decides whether to
subject it to conditions prior and/or subsequent to the issue of the policy,
such as requirements to implement prevention measures, to minimise
impact, or to conduct the necessary monitoring.
Ecocheck tool
The company possesses an innovative environmental filtering system called
Ecocheck. This tool performs a preliminary automatic assessment of the
information received, which is then completed and ratified by CESCE’s
Environmental Department.
As the institution managing risk on behalf of the Spanish state, CESCE participates in meetings between the Environmental Officers of the Member
States’ Credit Agencies held in the OECD.
These meetings analyse the progress of the reported transactions and
the level of application of the “Common Approaches” (OECD’s recommendations on social and environmental due diligence and export credit
insurance) to ensure that they are being implemented in the same way in
different countries.
Target for 2016
In the 2016 financial year, the company’s goal is to adapt the social and
environmental assessment procedures for transactions on behalf of the
State to the changes introduced in the new version of the “Common
Approaches”.
During 2015, the company issued four policies classified as Category A and
three policies classified as Category B.
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Transactions supervised on behalf of the State
PROJECT NAME
Expansion of
the STAR
refinery
400 kV transmission line
between Loyangalani
and Soswa
COUNTRY
SECTOR
ENVIRONMENTAL
STANDARDS
CONCLUSIONS OF THE
ENVIRONMENTAL ANALYSIS
Turkey
Oil and
Gas Sector
IFC Performance
Standards
The project consists of the construction of a new refinery in an existing petrochemical complex.
Atmospheric emissions and their impacts on diversity are analysed, as the project is located on
the coast and involves the construction of loading bays.
Assessment: management of the impact arising is deemed satisfactory.
Kenya
Electricity
The construction of the line involved the production of an action plan for the resettlement process,
which meets World Bank standards.
Assessment: management of the impact arising is deemed satisfactory.
The purification plant forms part of the Sewage System Master Plan for Santo Domingo and its province
and will help improve the water quality of the Río Ozama.
The impact of the project on the environment is considered acceptable based on the quality
of the discharge. The distance to the nearest accommodation, the wind direction, and the
possible disturbance to the settlement were all taken into account.
A
IFC Performance
Standards
The new line will transmit the electricity produced by the Cambambe hydroelectricity plant to the
substation in Catete. An Environmental Impact Assessment and, at CESCE’s behest, a
Resettlement Action Plan, have been produced for the project.
Assessment: the planned management of the mitigation of the impact is deemed suitable.
A
Electricity
WB Safeguard
Policies
The contract corresponds to Phase II of a project reported in 2014.
The environmental assessment identified the modification of the landscape as one of the most
significant impacts.
With regard to the possible effect on birds, the impact during the operation was expected to be
moderate since the levels of species richness and abundance recorded of birds with the potential
for collision are low. During migration the measures will be reinforced to guarantee the birds’
protection as much as possible.
B
Oil and
Gas Sector
WB Safeguard
Policies
Electricity
WB Safeguard
Policies
Río Ozama waste water
purification plant in Santo
Domingo
Dominican
Republic
Water
120 km transmission line
between Cambambe and
Catete.
Angola
Electricity
Dominica Clean Energy
Wind Farm (100 MW)
Mexico
Construction of 4 Liquefied
Petroleum Gas storage tanks Costa Rica
in the Moín refinery
Construction and
renovation of the
electricity distribution
network in Dondo,
Cassoalala, Zenza and
Masso
Angola
The most significant aspects refer to safety. The design of the materials and the
construction of all the elements of the project meet international and national standards.
The impacts on which the analysis focused relate to health and safety issues and potential
physical and economic displacement.
The results of the analysis determined that the project would not entail the resettlement of
the population. It is also worth mentioning the significant positive impact of the project in
helping to provide an electricity supply to the population. In short, the management of the
potential impact of the project is deemed satisfactory.
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A
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Commitment to good
governance
5.4
The governing bodies and set of internal regulations governing
CESCE comprise a unique corporate governance system,
capable of ensuring compliance with corporate targets and
the sustainability of the company in the long term. As a
predominantly publicly-owned private company, it complies
with Law 19/2013 on Transparency, Access to Information and
Good Governance.
5.4.1. Governing bodies
The General Shareholders’ Meeting, the Board of Directors, the Board Committee and the Senior Management Team are CESCE’s main governing
bodies.
The General Shareholders’ Meeting is the main body representing the
company. Its main responsibilities (pursuant to Article 160ff of Royal
Legislative Decree 1/2010 of 2 July, approving the consolidated text of
the Companies Act) are the approval of the annual financial statements
of the company and the consolidated group, the allocation or proposed
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The Executive Chairman in 2015, Mr. Álvaro
Bustamante de la Mora, occupied that office for four
years until 1 January 2016
distribution of the profits and the ratification of the management
of the Board of Directors.
The General Shareholders’ Meeting is stipulated to take place in
the first half of the financial year, being held in 2015 on 28 April.
CESCE’s Board of Directors consists of fifteen members, eight of
which are representatives of the State, including the company’s
Chairman. The other members represent insurance, financial or
credit institutions.
The job of the Board of Directors’ is to define general corporate
policy, to provide the appropriate structure to implement it, and
to ensure Senior Management complies with the targets set. It also
exercises the powers ineligible for delegation established in Article
249 bis of the Companies Act.
The Board assumes all responsibilities assigned by the majority shareholder, i.e. the Spanish State, pursuant to the Regulations on State-Owned
Companies involving the General Directorate of State Ownership (DGPE),
8 February 2007.
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Remuneration for the Board of Directors, which
consists of 14 members plus the Chairman,
was €156,493.
The Executive Chairman during the financial year, Mr. Álvaro Bustamante de la Mora, was appointed pursuant to Royal Decree
2062/2011 of 30 December at the behest of the Minister of the Economy and Competitiveness with prior Cabinet approval and remained
in office for four years until 1 January 2016, the date on which he
began his retirement.
Subsequent to the end of the financial year the meetings of the Board of
Directors are currently chaired by Mr. Jaime García-Legaz Ponce.
The full Board of Directors held twelve meetings in 2015.
Executive Committees
To facilitate its work and optimise its efficacy, CESCE’s Board of Management has created executive committees. The Committee on Risks Covered
on CESCE’s own Account held twenty-one traditional meetings and forty-five
virtual meetings.
There is also an Audit and Control Committee and an Executive Committee
for Directors’ Remuneration, which met four times and once respectively.
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Principles of
CESCE’s Code of Ethics
Senior Management Team
Compliance with legal and regulatory framework
The Senior Management Team consists of eleven highly-skilled and well-regarded professionals in their respective fields: an Executive Chairman, six members
of Senior Management, three directors and the Enterprise Risks Officer.
Socially responsible actions
It is responsible for meeting the corporate targets set by the Board of Directors.
Respect for human rights
Protection of the environment
Fight against corruption and bribery
Remuneration
In 2015, the remuneration of the Board of Management, consisting of 14 members plus the Chairman (although Senior Officers, including the Chairman, do
not receive any remuneration) was €156,493.
Ethical conduct in
developing the business
The remuneration for the CESCE’s Senior Management is governed by Royal
Decree 451/2012 of 5 March, regulating remuneration for senior officers and
directors in the publicly-owned companies and other institutions.
Objectivity, responsibility and independence in decision-making
Confidentiality of information
Protection of image and corporate reputation
Veracity of information
Objectivity when entering into contracts
Use and protection of assets
The remuneration paid to the Chairman or most senior officers of the company
amounted to €227,000, while the remuneration paid to Senior Management
was €965,000.
Commitment to employees
5.4.2. Ethical
Framework
Zero tolerance of discrimination
Respect in labour relations
Safe and healthy work environment
Professional development
CESCE has a Code of Ethics enshrining the values and principles which must
serve as a framework for the organisation’s entire activity, being the pillar on
which the different rules and specific procedures are based.
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The Enterprise Risks Unit encompasses
all units whose mission is internal control
and management
All CESCE’s employees are bound to know, respect and comply with its
Code of Ethics. The company also expects its customers, suppliers and
collaborators to respect the principles and values enshrined in the Code.
Therefore, their compliance with the Code is taken into account when
working with them.
To ensure the Code of Ethics is disseminated amongst the workforce, it
is available on the corporate website and the “Todos en Grupo” intranet.
In order to keep its principles and values up to date and apply them throughout the group’s companies, there is a Code of Ethics Committee. This
committee consists of representatives of the following directorates: State
Account, Human Resources, Legal Services and Enterprise Risks.
In performing its work, the Code of Ethics Committee considers the different suggestions which may be received through the various channels
established.
Created in 2013, CESCE’s Enterprise Risks Unit monitors the performance
of the company itself in tackling the business risks and guarantees that it is
correct. It is directly responsible to the Chairman and functionally responsible to the Board of Directors. It encompasses all units whose mission is
internal control and management.
This unit meets the increasing regulatory requirements (Solvency II) and
enterprise risk management (ERM) requirements seeking to strengthen
internal control functions, by segregating operational activity from control
functions.
5.4.3. Risk
Management
Through its own Risk Management System, CESCE identifies, evaluates and
tackles all eventualities which may affect the performance of its business.
In line with this system, the main bodies charged with supervision and
performance of the treatment of risks, from the first phase where they are
detected to the final phase where they are mitigated, are the Enterprise Risks
Unit, the Internal Audit Unit, the Audit and Control Executive Committee
and the Board of Directors.
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The most important of the Internal Audit Unit’s main responsibilities are
those involving the performance of process audits and the general identification of risks which may significantly affect the company’s performance
at the various levels. The Internal Audit also checks the suitability and efficacy of the internal control system and the other elements comprising the
governance system.
This unit is functionally and independently responsible to the Audit and
Control Executive Committee of the Board of Directors and hierarchically
responsible to the Head of the Enterprise Risks Unit, who in turn is respon-
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The Board of Directors is ultimately responsible for
implementing, supporting and developing
internal control procedures
sible to the company’s Chairman. The scope of its activity extends to the
whole CESCE Group.
The Audit and Control Executive Committee of the Board of Directors
comprises three members and is directly responsible to the Board of
Directors, to which it reports on the meetings it holds and the activities
it performs to comply with its responsibilities.
The Board of Directors is ultimately responsible for implementing, supporting and developing internal control procedures.
Risk management and control targets
The main risks CESCE faces based on their impact on key processes are
technical/insurer risk, credit risk, market and liquidity risk and operating risk.
In order to identify those risks, the Internal Control Unit has designed a risk
map to help identify and analyse the main risks and then make decisions on
them. The ultimate purpose of this risk assessment and identification process
is to mitigate the potential impact of these risks on the company’s financial
statements.
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In its activity on behalf of the State, CESCE works to
eradicate corruption in all its forms,
including extortion
In its fight against fraud CESCE collaborates with different institutions,
committees and institutional departments besides cooperating with the
State Security Forces.
Prevention of international corruption
In its activity on behalf of the State, CESCE works to eradicate corruption in
all its forms, including extortion.
In line with the OECD’s Anti-Corruption Convention, CESCE’s Anti-Corruption
Policy is applicable to any modality of coverage granted on behalf of the
State.
Fight against fraud
CESCE considers fraud to be another operational risk. The company
possesses a Global Fraud Risk Committee representing all areas, which
analyses the policies and procedures of the parent company and the
Latin American subsidiaries, prepares and updates criteria applicable
to prevention of fraud, and discusses actions to be performed by the
various areas.
In turn, the Executive Committee takes decisions in each case and establishes restrictions which may affect the different business units. Executive Committee members are also members of the Global Fraud Risk
Committee.
To prevent fraud, the company also implements automatic procedures to
prevent the acceptance of transactions involving companies included in
other transactions previously classified as fraudulent. To that end, CESCE
has a database handling cases classified as such.
Finally, the Internal Audit Unit conducts occasional reviews, assessing the
possible occurrence of internal or external fraud and evaluating the manner
in which the organisation manages those risks.
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According to that policy, before issuing an insurance policy, CESCE requires
the exporter to declare that it has not committed any corruption offence
relating to the transaction for which official support is being sought, nor has
it been involved in court proceedings for bribing a public official.
The company notifies possible beneficiaries of official support of the legal
and criminal consequences of committing the crime of corruption. It also
checks whether the applicant company appears on any International Financial Institution’s list of entities excluded from official support.
In the event of justified suspicions of bribery, CESCE notifies the legal authorities and adopts the relevant preventive and corrective measures, which
may include that the analysis of the application or any support granted be
suspended.
In 2015 CESCE amended the clauses of its policies and the wording of its
anti-corruption declarations in order to adapt them to the new Criminal
Code (Organic Law 1/2015) which entered into force on 1 July. It also took
the opportunity to update the text of the declarations, in view of the development of the Anti-Corruption policy since its adoption.
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5.4.4 Senior Management Team on 31 December 2015
Executive President
Mr. Álvaro Bustamante de la Mora
Chief Operating Officer - State Account
Ms. Beatriz Reguero Naredo
State Account Business Underwriting Director
Ms. Beatriz Reguero Naredo
Country Risk and Debt Management Director
Mr. Ricardo Santamaría Burgos
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Chief Operating Officer – Own Account
Mr. Luis Antonio Ibáñez Guzmán
Technical Director
Mr. Luis Antonio Ibáñez Guzmán
Corporate Sales Director
Mr. Juan Antonio Mateo Jiménez
Marketing and Communications Director
Ms. Isabel Colomina Casaus
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Financial Director
Ms. Pilar Andrés Hermán
Human Resources Director
Mr. Francisco Gea Barberá
Legal Services Director
Mr. Jaime de Miguel Muñoz
Technology and Business Processes Director
Mr. Mariano Arnáiz Mateo
Enterprise Risks Unit
Mr. José Manuel Val López
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5.4.5 Board of Directors on 31 December 2015
Chairman
Mr. Álvaro Bustamante de la Mora
CESCE
Vice-Chairman
Mr. Antonio José Fernández-Martos Montero
Director General of Trade and Investment
MINISTRY OF ECONOMY AND COMPETITIVENESS
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Voting members
Mr. Álvaro Aresti Aldasoro
Head of Global Customers and CIB of Grupo BBVA
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Mr. José Corral Vallespín Deputy General Director of Risks
GRUPO SANTANDER
Mr. José María Fernández Rodríguez General Director of the Treasury
Mr. Francisco Javier Fernández De Trocóniz Núñez
Director of Corporate Investment Banking (CIB), Spain and Portugal
BANCO BILBAO VIZCAYA ARGENTARIA
Mr. Mariano Olmeda Sarrión Deputy General Director
GRUPO SANTANDER, S.A.
Mr. Sergio Pérez Saiz Deputy General Director of Financial Support for Globalisation
SECRETARY OF STATE FOR TRADE
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Voting members
Mr. Joaquín Rizo Fernández
General Secretary and Financial Director
España, S.A. Cia. Nacional De Seguros
Mr. Javier Sangro de Liniers
General Director of International Financial Relations
MINISTRY OF FOREIGN AFFAIRS AND COOPERATION
Ms. María del Mar Sebastián Merino
State Counsel - Head of the Secretary of State for Trade’s Office
Ms. Cristina Serrano Leal
General Deputy Director of Commercial Policy with Iberian America and North America
Mr. Jaime Ybarra Loring General Director of Wholesale Banking
Banco Santander
Mr. Francisco Vallejo Vallejo Chairman
Sabadell Urquijo – PRIVATE BANKING
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Secretary
Ms. Mª. Belén Plaza Cruz
State Counsel
General Directorate of State Assets
Deputy Secretary
Mr. Jaime de Miguel Muñoz
Director of Legal Services
CESCE
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Consultants
Mr. Pablo De La Torre Rodríguez Director of International Banking
BANCO POPULAR ESPAÑOL
Mr. Luis Orgaz García Head of Country Risk Service
BANK OF SPAIN
Mr. Ignacio Ramiro Ruiz de Ojeda Managing Director
DEUTSCHE BANK
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REPORT
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15
PUBLISHED BY: CESCE
Velázquez 74, Madrid.
www.cesce.com

annual report - CESCE England

Transcription

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