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International Credit Insurers combine in customer-focused alliance
AMSTERDAM, 22 August - Swiss Re, NCM and Gerling Credit announced a transaction to combine Swiss Re's 90% owned subsidiary, NCM Group, with Gerling Credit (wholly owned subsidiary of the Cologne-based Gerling Group). The new holding company's name will be Gerling NCM Credit and Finance AG.
As part of the transaction, NCM's majority shareholder Swiss Re will receive a combination of cash and stock. NCM's other shareholders, ABN Amro and ING, will receive cash. Upon completion of the transaction the Gerling Group will become the majority shareholder (75%) and Swiss Re will remain a significant minority shareholder (25%) in the new company.
Gerard van der Stelt, NCM's Chief Executive Officer, said:
"NCM and Gerling Credit together will offer an enhanced value proposition to our clients, through specialist risk management capabilities and diversification.
"Trade globalisation requires high quality credit and trade receivables management through a single provider. As one of the world's largest credit insurers, Gerling NCM will be ahead of the market in meeting customer needs both on-line and off-line."
Bernd Meyer, Chairman of Gerling Credit, will be Chief Executive Officer of the new company.
He said: "This is a great combination. We are natural partners with real chemistry - sharing the same strategic vision of a receivables company."
"Our new combination will become the world-wide integrated credit insurer with the most extensive global network, offering the trade markets both off-line and on-line innovative solutions to minimise their trade risks."
Walter B. Kielholz, Swiss Re's Chief Executive Officer, said:
"Swiss Re is a strong supporter of the credit insurance industry and we are confident that a partnership with Gerling Credit will ensure NCM's long term future.
"We remain committed to the ongoing development of the new combined company, through our 25% stake." NCM is currently the world's second largest export trade credit insurer and fifth overall trade credit insurer with a 12% global market share and leading market positions in the United Kingdom, Italy, Benelux, the Nordic region and the United States. Total revenues in 2000 were EUR 528 million (Swiss Re purchased 90% of NCM in 1998, ABN Amro and ING Bank each retained 5%).
Gerling Credit, one of the world's largest credit insurers with a global market share of 13%, currently operates in 36 countries on 5 continents.
Gerling NCM Credit and Finance AG will have a global market share of 25% of the direct trade credit insurance business, with estimated total gross premiums of EUR 1.1 billion and will operate in virtually every major economy in the world, including the European Union, North America, Mexico and Asia.
Operating Worldwide
Complementary geographical representation is a major advantage. Current and potential customers will benefit from the new company's clear presence in leading markets such as Germany and France, where NCM's presence has been limited and Gerling Credit strong. Conversely NCM will provide Gerling Credit with improved access to markets such as The Netherlands, UK, Nordic countries, Italy and the United States where Gerling's presence has so far been limited.
This broader regional presence will enable the new combination to optimise further its information and risk portfolio as well as its credit insurance and other trade receivables services such as debt collection, factoring, guarantees, financial solutions including securitisations, and interim credit management services. Joint eBusiness products, building on existing advanced systems and expertise, will also be developed further.
Strengthening Financial Power
Combining the two companies will also strengthen their financial power, reinsurance structure and asset management in addition to enlarging the capital base.
As part of the successful integration of NCM and Gerling Credit the shareholders and management expect to work towards an Initial Public Offering of the new company in due course.
The deal is subject to regulatory approval by the insurance departments of The Netherlands and Germany and the EU Competition Authorities. However, the transaction is expected to close by the end of the year.
The NCM Group is a privately owned company headquartered in Amsterdam. In the 2000 financial year it insured business transactions worth EUR 172 billion (excl. Società Italiana Cauzioni) against the risk of non-payment, and revenues totalled EUR 528 million (excl. activity on behalf of the Dutch State). The financial result before tax and the addition to the equalisation provision, was EUR 54.9 million. NCM services more than 20,000 customers world-wide, helps them trade safely in 250 countries, can provide access to information on 30 million companies world-wide and processes one million requests for buyer risk assessments yearly. It employs approximately 1800 people.
Gerling Insurance Group is one of the leading German insurers, with gross premiums of EUR 9.5 billion and an IAS financial result before tax of EUR 216 million in the financial year 2000. Gerling is active in all areas of insurance and reinsurance in more than 30 countries. Standard & Poor's have confirmed their AA- rating for the four Group companies. The Gerling Insurance Group is owned by Dr. Rolf Gerling (70%) and Deutsche Bank (30%).
The Gerling Credit Insurance Group is the third largest credit insurer worldwide with a gross premium volume of about EUR 600 million and 1,650 employees. In 2000 the financial result of Gerling Credit before tax amounted to EUR 55 million. Together with its subsidiaries Gerling Namur (Belgium), Gerling Nordic (Norway) and Gerling Comesec (Mexico), the company is represented in 36 countries on five continents. The Gerling Credit Insurance Group became the first credit insurer rated "AA-" by Standard & Poor's and "Aa3" by Moody's.
Swiss Re is one of the world's leading reinsurers with over 70 offices in more than 30 countries. In the 2000 financial year, gross premium volume amounted to CHF 26.1 billion and the net income after tax reached CHF 3 billion. Swiss Re is rated "AAA" by Standard & Poor's, "Aaa" by Moody's and "A++" (superior) by A.M. Best