22 March 2024
Find out the critical role our credit underwriting team and how they can help bring more confidence to your business decision-making
Summary
Key Takeaways
- Close collaboration between risk analysis and credit underwriting teams enables businesses to make informed decisions about trading partners and assess credit risks effectively, crucial in navigating volatile markets.
- Underwriting teams evaluate a wide range of risks, from macroeconomic factors to microeconomic and extraordinary risks, employing financial analysis and continuous monitoring to predict and manage potential threats.
- Building strong relationships with customers and clients is pivotal, allowing for tailored risk management solutions and optimized business relationships, supported by localized engagement facilitated by regional presence in the GCC.
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Credit underwriting teams
Our ability to provide accurate and market-leading risk assessment is reliant on the diligent work of our risk information analysis and credit underwriting teams.
The two teams work closely together to help businesses make better-informed decisions on who they trade and work with, and assess the credit risks that companies might face when trading with their clients.
Risk analysis and underwriting is becoming ever more important as businesses try to navigate an increasingly volatile market in the region. Not only do these teams act as trusted advisers during key decisions, but in a way they also act as your external credit management department, allowing you to save from investing in additional risk management experts or purchasing information on potential clients.
We spoke to Anett Tony, Team Leader Risk Underwriting, and Anwar Hussein, Senior Credit Underwriter, at Allianz Trade in Midle East to get an insight into the role of the risk analysis and underwriting teams and the benefits they bring to businesses of all sizes.
A strong expertise in evaluating risk
The primary risks that the underwriting teams are required to evaluate are the risks of non-payment or insolvency. But there is an enormous range of risks that can affect companies and their ability to meet payment obligations in the GCC.
The risks can range from macroeconomic trends such as regulatory changes, market risks or political challenges, to microeconomic risks like operational, liquidity or credit risks. But other factors also constitute a threat to the financial stability of a company such as strategic or reputational risks, as well as extraordinary risks, among others.
According to Anett, analysis of a company may involve financial ratio analysis, discussions with the company management team to assess its strategy, ownership and management, and an assessment of the resilience of the business. Concretely, the idea is to identify what may threaten the assets and viability of a company, predict future events that present risks, and calculate the financial impact these risks could have.
“Our team is primarily dealing with complex groups and a number of distressed scenarios, which require bespoke credit risk solutions,” says Anett. “What we bring to the policyholder is better-informed decisions and a trusted partner they can discuss with.”
For Anwar, one area of particular importance is to understand the political situations in countries across the GCC. He says: “It is my responsibility to understand what is going on in countries in our region. It requires continual effort to try to anticipate future scenarios and what challenges these might present for our customers.”
One goal: making better-informed decisions
It is down to the risk underwriters to interpret data, analyse the exposure to risk and determine credit limits.
To do so, risk underwriters quantify the risks of financial operations and analyse the solvency of our customers’ clients based on the examination of financial statements and solvency ratings. They also use internally-built sectorial and regional reports to identify trends that may impact customers. They complete the analysis with an examination of the viability of the projects customers plan to undertake in the short, medium and long term.
Anwar likens the process to crafting a traditional Arabic carpet: "Every piece of insight gathered is a thread in the intricate design, and as we gather more, the pattern becomes clearer. With sufficient knowledge, we empower our customers to make confident decisions, enhancing their trade experience."
Anticipating future scenarios and the subsequent challenges these might present for businesses is a highly skilled job that requires the ability to analyse large amounts of data.
As Anwar observes: “The network of information and the scale of data that we gather through our analysis at Allianz Trade in Middle East is second to none. And it’s one of the key advantages for our customers.
Anett adds: “With our high-quality economic research department, the capabilities we have for analyses of the macroeconomic environment in the region has proved to be particularly outstanding.”
The key: building strong relationships
In many cases, the information disclosed to Anett and Anwar is private and confidential and can only be gained as a result of the trusted relationships they have built with the customers and their clients. “This is essential and helps us make the decisions that others wouldn’t be able to make,” says Anett.
These relationships are a crucial part of this work. “The relationships are absolutely paramount to Allianz Trade in Middle East, and how we build up that relationship with our customers,” says Anwar. “The more we know about the customer, the better we can tailor their credit limits, thus optimising the business relationships of our customers and their clients.”
The regional structure of our organisation, being present across the GCC also helps us to stay close to customers locally, allowing our risk underwriters to engage with a customer’s clients in their own language and in their own territory.
Our expertise and commitment
Allianz Trade is the global leader in trade credit insurance and credit management, offering tailored solutions to mitigate the risks associated with bad debt, thereby ensuring the financial stability of businesses. Our products and services help companies with risk management, cash flow management, accounts receivables protection,debt collection processes ensuring the financial resilience for our client’s businesses. Our expertise in risk mitigation and finance positions us as trusted advisors, enabling businesses aspiring for global success to expand into international markets with confidence.
Our business is built on supporting relationships between people and organizations, relationships that extend across frontiers of all kinds - geographical, financial, industrial, and more. We are constantly aware that our work has an impact on the communities we serve and that we have a duty to help and support others. At Allianz Trade, we are strongly committed to fairness for all without discrimination, among our own people and in our many relationships with those outside our business.