COLOMBIA - Finance
President & CEO, Coface Colombia
Hattieann Giraldo attributes her capacity to understand and support cultural differences to having lived in the US for 16 years and then returning to Colombia. She believes her work and life experiences have given her the opportunity to be supportive of Colombia’s development.
TBY talks to Hattieann Giraldo, President & CEO of Coface Colombia, about making the most of an international network, insurance penetration, and managing risk.
How does Coface serve international trade entrepreneurs, and how is the firm’s international network of offices an asset for them?
One of the things we’ve advanced over the past year is the data content of our database. This enables our clients to take better decisions quickly. In terms of credit insurance, we’re working on a new product that will serve small export companies, providing access to credit insurance at reasonable cost for their new market. We’re looking towards their expansion in the export business, and that’s how we’ll be supporting company growth in the near future. Cross-border business necessitates both a private insurer and an information company. Not all exporting companies will meet the required size for credit insurance, require credit insurance, or wish to buy credit insurance. What we are offering is a complete solution; having information as a first step and credit insurance designed specifically for SMEs.
What is the strategy to capture market share given rising demand for credit insurance, and what is the strategy to promote insurance penetration?
Having a policy adapted for small and medium sized companies is our first strategic lever in terms of supporting international trade. It’s one of the market growth ideas. On the other side, helping our midsize company’s clients to look for new business and safely using our tools of updated information as a plus for their safe growth. Credit insurance offers coverage but doesn’t necessarily offer sufficient information to decide on what potential clients they’re looking for in the future. We have designed a product called Portfolio Insights that will help companies evaluate their existing portfolio, but also define the potential clients they should be looking for. The Agri-Food sector is one of the most attractive sectors for exports, as a region we have a large advantage. This is what we definitely need to work on in order for Colombia to grow as a country and as a whole. We want to support these mid- to smaller-sized companies keen to export Agri-Food production to countries where there is a clear demand. We are leveraging, starting from what we know are our traditional exports, like flowers, but also migrating products in terms of credit insurance to smaller companies in the same field or alternative ones.
Can you illustrate the importance of credit insurance and give us an example of how this tool is important for a client’s financial security?
When you go out and try to sell in an international market, great uncertainties are encountered, so we need to have specific information on how to deal with the market in general. It can be customs or the general overview of the country. How the economic or political system works, how exports will be handled in terms of payment and how the payment index of the country works. We have all of this information available free to all of our clients as a benefit. Coface has a hundred plus companies in a hundred plus countries where we provide credit insurance. That scope means that we are available to let you know how to work with these companies and ensure you that we’ll undertake a collection process if they don’t pay you. We are the ally to mitigate cases of non-payment, because the selling process doesn’t ends with the delivery of the product, it actually ends with de collection of the debt which is as important as the selling chain, and we have the knowledge to do this maintaining our clients’ commercial relationships. Most companies that export don’t have great insurance and have to pursue their own means to collect an unpaid debt. Credit insurance will definitely solve this issue for them. We have many clients that through exporting policies have coverage that helps them do this.
How does Coface lean on technologies of big data analytics and predictive tools to benefit clients?
It’s a matter of having the basic information available. Today, we have a partner that helps us with this in terms of having a tool to evaluate companies, while Coface has its own internal tool for this. What we need to obtain is the information, the basis for feeding our own analytic system. We have obtained more and more information at regional level. All of our local exporting companies can support their decision-making process by making use of it. Besides that, our clients are able to buy this information online whenever and wherever they are For example, the Portfolio Insight is an evaluation of your full portfolio. This means that we require full information on the company’s portfolio, and have it modeled into our scoring system.
How can Coface help companies reduce uncertainty and manage risk?
Agri-Food companies also need to dedicate themselves to selling. They must protect their suppliers, while also pursuing the growth of their core business of selling. They need companies to be their allies, to better choose their clients and to try to mitigate the risk of that uncertainty. The only way to mitigate this risk is to transfer it. Credit insurance companies charge a premium to assume risk, and that’s where we come in. We also avoid future risk. For example, perhaps a particular client isn’t right for you. This preventative aspect of our activities needs further development with our companies, clients and prospects. Credit insurance helps manage risk and prevent non-payment. Finally, it strengthens the debt collection process, which is the most valuable difference between us and our competitors .We are much stronger, and our recovery rate is a very healthy 57% of all claims during a year.
How can credit insurance contribute to the economic and social development of the country and what critical role does it play?
It’s definitely critical. Companies shouldn’t go out locally or into the world to do business without a supportive credit insurance company. We need to ensure that everybody has access, at least for insurance, to enable better business decisions. Having somebody that assumes the risk for you, while accompanying you in the risk to ensure that you make the correct decisions for your future business without putting your business at risk is of paramount importance. These are the points that many companies should look at when weighing up whether to take out credit insurance. The cost does not compare to the losses you can incur in, an eventuality something so unexpected as what happened in terms of the pandemic. A popular misconception is that credit insurance is only applicable for large companies, but risks situations also exist for small and mid-sized companies, and that’s where Coface wants to ensure them the they access. Obviously, it’s a different line of business bearing a greater risk because the company is either starting out, or else seeking unfamiliar clients. Moreover, due to the pandemic they haven’t been able to travel over the past year, whereby there is considerable risk involved in pursuing export markets. This is precisely where they need to ally with the experts in the export arena.
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