Euler Hermes has announced a credit insurance joint venture (JV) with China Pacific Property Insurance Company (CPPIC).

Headquartered in Shanghai, the venture will operate under the name CPPIC Euler Hermes and be managed by existing members of staff from both companies.

CPPIC is the third-largest property and casualty insurer in China, but also one of only a few export credit insurers in the country. The two firms have worked in partnership, growing their joint trade credit portfolio, since 2011.

Wilfried Verstraete, chairman of the board of management of Euler Hermes, explains: “Our strategy in Asia is to invest in and build strong partnerships that provide exceptional value for our clients. The co-operation with CPPIC marks a milestone in our strategy for China and we are very pleased to deepen our partnership and bring our services to a wider spectrum of Chinese entrepreneurs and businesses.”

“The CPPIC-Euler Hermes joint venture integrates the competitive edges. By combining the 120-plus years of experience of Euler Hermes, its global risk database and worldwide collection expertise, with CPPIC’s extensive network and resources, we are going to have a differentiating development in trade credit insurance industry,” adds Gao Guofu, chairman of China Pacific Insurance Group.

China only opened its export credit insurance sector to private companies in 2013, meaning there are still large untapped opportunities in the market, especially as sluggish trade growth is expected to lead to a 20% increase in business insolvencies in the country in 2016.

According to Euler Hermes, payment delays are rising, with days sales outstanding (DSO) growing by 11 days (to 88) between 2012 and 2015.