Related News

On the publication of Gerling NCM’s annual report and results for 2002, Bernd Meyer, chief executive officer, said: “The very successful integration of the former Gerling Credit Insurance Group and NCM as well as the new shareholder structure provides a strong springboard for our take-off as an independent company with a much better outlook.”

Its new owners, Swiss Re and Deutsche Bank, which are recapitalising the company, support independent growth now that a triple challenge on the economy, ownership and merger has been successfully addressed, says the insurer.

Gerling NCM ranks number two in the world credit insurance market with a 25% market share. It has total revenues of €1.3bn and protects trade worth around €350bn.

Gerling NCM had some success in 2002 in dealing with global economic weakness and market volatility, ensuring the continued availability of adequate credit insurance for customers, who co-operated in effectively reducing the risk profile of policies. At the same time, the integrated worldwide network was strengthened and product range diversified, with growth in non-risk revenue areas such as debt collection, interim credit management and outsourcing, claims the firm.

 This was achieved against a background of uncertainty surrounding its major shareholder, the Gerling Group, and consequent uncertainty over Gerling NCM’s future ownership and rating.

That was resolved on <

  • xml:namespace prefix = st1 /> May 7, 2003 with the announcement of a change in shareholder structure whereby Swiss Re will increase its ownership stake to 47.50%, Deutsche Bank will own 35.32%, a pension vehicle will account for 7.14%, Sal Oppenheim will control 7%, and Gerling will retain 3.04%. Subject to regulatory approval, the transaction is expected to close July/August 2003.

    In addition, as part of the transaction, Swiss Re and Deutsche Bank have agreed to each underwrite half of an issuance of subordinated notes with a total principal amount of up to €110mn. The future new shareholders also anticipate that Gerling NCM will, in the medium term and subject to market conditions, have an initial public offering

     Substantial progress has been made in integrating former Gerling Credit and NCM operations, complemented by strong measures to control claims and costs, the firm adds.

    Common policy suites were developed, groupwide risk underwriting organisations and guidelines integrated and a systematic approach implemented on the rating of customers, buyers, trade sectors and countries. IT systems continued to be implemented on schedule, and a single reinsurance treaty established.

    As part of Gerling NCM’s migration from the Gerling Group, the company will be renamed and rebranded and further stability created across a single platform as a key element in creating an independent company.

    Global economic weakness and market volatility, adverse conditions in capital markets and record numbers of insolvencies made 2002 a most difficult year for the entire insurance industry, particularly credit insurance. Despite this, the total turnover (defined as income from business activities, including gross premiums written, factoring income and service income) of Gerling NCM, on a consolidated basis, increased by 2.4% to €1.282bn (2001: €1.254bn), in line with expectations. This reasonable business result was achieved by selectively tightening up underwriting policy and by increasing prices in all countries and industries, to match the risk profile.