What are CESCE's main activities, and how have these changed over the years?
CESCE was founded by law in July 1970 and began operating in 1971. The main objective of the company remains the same, which is to cover the risks of Spanish companies exporting or investing overseas. However, CESCE has become bigger and more complex over the years. Originally, we only subscribed insurance policies on behalf of the state. We later started to work as a private insurer covering domestic and export credit risk and, in this private part of our business, compete like any other company. As part of this business, we acquired INFORMA, the leading commercial information company in Spain, Portugal, and Colombia, integrating it into the CESCE Group and the Dun & Bradstreet network. We also expanded our geographical presence throughout Latin America, where we now have seven subsidiaries. We also opened subsidiaries in France and Portugal. Additionally, CESCE has been working on a digital transformation plan to optimize its operational model by achieving a high level of automation through the use of advanced analytics, a method through which we have automated more than 95% of our credit risk decisions and 80% of the claims decisions. We have also developed new digital products and services based on a flexible subscription model. Finally, we are working on creating a more digital culture that is agile, lean, and innovative by developing an open innovation ecosystem in collaboration with start-ups and high-tech companies.
Who are your public and private clients?
CESCE operates through two accounts: the state account and the private account. CESCE is the Spanish export credit agency, whose credit insurance activity we manage. CESCE is well known in the market for being the insurer of large Spanish engineering projects abroad, such as the Panama Canal, the AVE high-speed train, which links Medina to Mecca, and other major projects. Those who use CESCE the most in terms of risk volume are large global Spanish companies, especially in the industrial and construction sector. But keep in mind that we subscribe 1,800 policies per year on behalf of the state, 1,700 of which correspond to small operations. Our main clients with regards to the number of operations are Spanish exporting SMEs, for which we insure tens of thousands of euros in short-term credits. Within the private sector, we insure the payment of commercial credits for Spanish businesses that are mainly SMEs: 57% of these commercial credits are for debtors located in Spain, and 43% are located overseas. Our private insurance business is highly competitive: for this business we cover up to 95% of the commercial credit, the highest rate in the sector, and we normally indemnify in 60 days, the fastest in the sector.
Against what risks do you protect SMEs, and what is your advice to those seeking to export?
CESCE is not a general insurer; it only insures the commercial credit risk for non-payment of invoices, which we do for both the state and private businesses. In the case of the state's account, we insure political and extraordinary risks, insuring non-payment due to acts of nature such as earthquakes and floods, but also catastrophic risks such as revolution and war, mainly in emerging markets. Our main recommendation for SMEs is that they need to correctly manage their commercial risk, be it by utilizing their own professionals or by transferring this risk to a specialist such as a credit insurance company like CESCE. For us our competitors are not the other credit insurance companies in the market, but the use of self-insurance. Only 30-35% of commercial invoices are insured. The rest is not, which is not advisable unless companies have the necessary resources. Therefore, our recommendation is to transfer the risk to a specialized company.