Belgian export credit agency (ECA) Credendo has unveiled plans for merging its two specialised trade credit insurance entities into one company.

The merger, which is planned for the first half of 2021 and is still subject to regulatory approvals, will see the joining together of Credendo – Excess & Surety and Credendo – Single Risk.

The new Credendo – Guarantees & Speciality Risks company will have a combined capital of €135mn, and will offer surety, excess-of-loss and single-risk policies from its headquarters in Brussels, as well as through its network of offices in Austria, France, Germany, Italy, Luxembourg, the Netherlands, Poland, Spain and Switzerland.

Eckhard Horst, general manager of Credendo – Excess & Surety, says the merger will help address growing demand from large corporates and small and mediums enterprises (SMEs), particularly for its surety products.

“It serves our objectives of deploying our products in additional markets where Credendo – Single Risk is active and developing innovative technology solutions,” he adds.

Michael Frank, general manager of Credendo – Single Risk says: “The merger plan aims at enhancing our capital base and financial solidity, diversifying our risk profile as a multiline trade credit insurer. The future entity will be able to satisfy even more high-grade clients’ needs and requirements, such as banks.”

Ratings agency AM Best affirmed Credendo – Single Risk’s financial strength rating of A- and the long-term issuer credit rating of “A-” in a June report, while also revising its outlook to negative.

AM Best notes: “The negative outlooks reflect AM Best’s expectation that underwriting volatility related to global economic disruptions as a result of the Covid-19 pandemic is likely to adversely impact Credendo – Single Risk’s efforts to improve its track record of weak underwriting performance in the short term.”

“Credendo – Single Risk’s limited business profile reflects its relatively small size and absence of diversification as a monoline credit insurer operating in a highly competitive market environment,” it adds.

The new Credendo – Guarantees & Speciality Risks entity will operate under the management of Horst, with the support of three business lines managers, each heading a specialised credit insurance line.

Based in Amsterdam, Annet de Grooth will co-ordinate the surety business; Marco Censi will head up the excess-of-loss business from Italy; and Kerlijne Van Steen will take charge of the single-risk business line in Switzerland.