Trade Credit Insurance !

Agenda

! Credit Insurance Credit Terms & Sales Cycle

Key Benefits

! Policy Structure Policy Coverage

Claim Payout Example

! Market Trends Key Challenges Australian Agriculture

Insolvency Statistics

! Solution Proposed Solution for AgLink Next Steps Whats Required?

CRM Brokers Pty Ltd - ACN 088 887 138 - ABN 68 088 887 138 - AFS Licence 246622

Recommended Insurer: Atradius - Facts & Figures

! Atradius is the most international and integrated credit insurer in the world

! More than 160 offices in 45 countries

! Worldwide more than 3,300 employees

! Financial strength rating by A.M. Best is A (excellent) outlook stable and

A3 outlook stable by Moodys

! Access to information on 100 million companies

! Headquarters: Amsterdam (the Netherlands)

Atradius a Global Presence

! They operate where their clients are: strong local expertise

! They manage risk & collections wherever they have exposure as close to the buyer as possible

Oceania Australia New Zealand

The Americas Argentina1 Brazil Canada Chile Mexico USA

Middle East Israel2 Saudi Arabia Lebanon2 UAE1

Asia China Hong Kong India Indonesia1 Japan Malaysia1 Philippines1 Singapore Taiwan1 Thailand1 Vietnam1

Africa Kenya2 South Africa1 Tunisia2

Europe Austria Belgium Czech Republic Denmark Finland France Germany Greece Hungary Iceland1 Ireland Italy Luxembourg The Netherlands Norway Poland Portugal Russia Slovakia Spain Sweden Switzerland Turkey United Kingdom

1 Co-operation agreements with local partners. No Atradius office or shareholding. 2 Associated company or minority interest in local business.

What is Trade Credit Insurance? Adding to the value chain

The Credit

Insurance Triangle

Financing Receivables

Credit Insurance Contract Cover of Non-Payment Risk

Risk Assessment and Approval of Credit Limits in Favour of the Insured

Delivery of Goods and Services Credit Terms Agreed

Insured Company (Seller)

Customer of Insured (Buyer = Risk)

Key Features Modula Policy

Atradius Modula is a revolutionary concept in credit insurance that allows you to build a policy to your specific needs. Atradius Modula provides:

! A flexible and tailored approach to credit insurance ! Access to an international recovery service ! First class online policy management system (Serv@Net) ! Cover for up to 90% of debt ! Dedicated account management support

Credit Insurance in Practice-Timetable Contract signed Dispatch & invoice Due date Probable loss

Claim / Ascertainment of loss

WaiOng period

e.g. 60 days e.g. 120 days up to Protracted Default

Credit limit decision

Apply internal credit management procedures for recovery

No cover for future deliveries

Date of loss / submit claim

Invoicing period (max 30 days from despatch)

NoOficaOon of probable loss / transfer for collecOon (within 30 days of MEP expiry)

Pre-credit period

Max extension period (MEP)

Credit risk period

Maximum payment terms e.g. 120 days

What are the Key Benefits?

Reduce Financial Risk

Risk protecOon- commercial & poliOcal

Protects Cash flow & profits

Reduce bad debt provisioning

Hedge against catastrophe risk

Peace of mind

Improve Cash Flow

Claim payments

Maximise debt collecOon

Access to finance

Access to collecOons service- some

contribute to costs

Support Credit

Management

Automated credit control via insurers

systems

Creates discipline/control

Second Opinion

Leverages market intelligence- i.e.

payment experience from clients across

Australia

Supports Sales Growth

Supports most compeOOve terms of

payment

Confidence to grow in new markets, with new customers or bigger contracts

Financial health check at tender stage

Whats Covered?

! Insolvency Includes the following:

! voluntary administration ! liquidation ! bankruptcy ! receiver / manager appointed

! Default Buyer fails to pay within the policy waiting period, this period starts from the due date

! Political Risk Losses in countries other than the suppliers country, including:

! foreign exchange blockage ! import bans ! war & civil riots ! contract frustration ! public buyer default ! natural disasters

Claim Payout Example

Invoices AUD $100,000.00

Exclusion of Tax (GST) AUD - $9,090.91

Amount covered AUD $90,909.09

Amount before indemnity % is applied AUD $90,909.09

Indemnity Percentage (90 %)

Balance AUD $81,818.18

Each & Every (first loss) AUD - $5,000.00

Amount payable AUD $76,818.18

Key ChallengesAustralian Agriculture

! Vagaries of the Australian climate ! Global price instability

! Long-term downward trend in farmers terms of trade ! Future growth largely dependent on exports - maintaining compeOOveness in the global market

* Source: Grant Thornton, Food and Beverage Study 2013

Insolvency Risk Australia