| Claim: | [View Claim Details] |
| Easing of global economic woes during late 1999 resulted in a substantial reduction of year 2000 claim activity. Claims decreased in both number and dollar amounts while the spread of countries experiencing claim activity reduced, but not as significantly. The number of claims filed by International Risk Consultant's (IRC's) U.S. region clients decreased 55% from last year to this (78 to 35) returning to 1998 levels, which at the time, were record numbers. Dollar volume of claims also reduced nearly 57% ($23.8 million to $10.3 million). The one constant factor was that the average claim size remained in the $200,000 -$300,000 range for the fourth year in a row.
The 2000 claims were highlighted by individual approvals on claim filings of $4.0 million in the USA by NCM; $1.9 million in the USA by Euler/ACI; $1.2 million in Brazil by AIG; $570,000 in Mexico by CNA and $230,000 in Colombia by FCIA. The United States overtook Latin America as the region in the world in which our clients experienced the most difficult payment experience under insurance cover. While claim activity declined significantly around the world claims filed against debtors in the United States remained the same while the dollar amount increased nearly 100%. Latin America, while having fewer and smaller claims, nonetheless remained a fertile region for claim activity. European claim activity remained stable although Russia is notable by its absence. This is due primarily to insurers having appetite for only the strongest transactions in Eastern Europe. Asia continued its slow emergence from its 1998 economic troubles and saw little claim activity as a result. Like Eastern Europe, insurers have shown a cautious view when approached with Asian risk. |
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| Reschedulings: | [View Rescheduling Details] |
| The improved global economic conditions, which reduced claim activity, also provided a similar dramatic reduction in the number of reschedulings. During 2000 IRC clients requested just 14 reschedulings for a little over $7 million dollars compared to 57 requests amounting to over $51.5 million dollars in 1999. Even though our insureds found the need to reschedule debt less often, there were still several instances, particularly in Latin America, where large debts needed to be rescheduled while the buyer continues to attempt to payoff the outstanding debt. (See broker note). | |
| Note: ** *Broker Note: Reschedulings are situations that arise when a buyer, unable to pay his debt on time, requests further time to pay. The insured must seek and receive written approval from the insurer before formally agreeing with his customer. If the insurer agrees, the due date of the obligation is changed and coverage remains in place. Reschedulings are taken very seriously as they can be a prelude to a claim. |
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