Money Moves

Parallel strategy a winner

by Anna Tong

Richard Burton, regional managing director, Coface Greater China
Photo: Edde Ngan

In the past, when a local company wanted credit insurance to safeguard against substantial amounts of unpaid invoices, it would minimise its risk factor by calling on the services of one of a few local credit insurers. Today there is a wide selection of reliable credit insurance companies on offer. Coface, founded in France 60 years ago, can offer credit insurance on a global scale since it has almost 100 offices and alliances around the world.

Coface opened up in Hong Kong 11 years ago and now holds a firm position in the market despite fierce competition. Richard Burton, regional managing director, Coface Greater China, believes that much of Coface's competitive edge lies in their four lines of business. While its credit insurance services insure companies against losses, business information provides companies with information on their trading overseas. Meanwhile, receivables management and @rating solutions provide debt collection and online risk management solutions; and receivables finance provides extra credit to companies as and when required. "We can provide a complete package of solutions to clients covering all these four lines of business," Mr Burton says.

From its location in Hong Kong, Coface is within easy reach of target clients in Taiwan, Shanghai and Beijing. "Our Hong Kong headquarters acts as a hub to the greater China region, plus Taiwan and the many local offices in those regions," Mr Burton points out. "This is an ideal location since we realised globalisation has an increasingly important role in Hong Kong."

Clients from a wide spectrum of different industries come to Coface, which provides them with solutions through its network of alliances with banks and other insurance companies. Many clients are local middlemen whose overseas buyers are deeply indebted to them, and so require Coface's services to safeguard their sensitive position. "International trade in Asia has increased rapidly so we help our clients cope with globalisation," says Mr Burton.

The company's parallel strategy also acts as an edge for Coface in the face of increasing competition in the credit insurance industry. In addition, Coface has taken an important step into China's insurance field by forming an alliance with China Ping An Insurance, one of the country's biggest insurers. This has become a conduit to provide their services to multinational as well as some big local companies on the mainland.

As the China market further opens up Mr Burton is optimistic about the industry's development in the region. "Even though export market credit is currently shut to foreigners, China is under intense pressure to relax its protective regulations, and many knowledgeable people are optimistic that it will open up the market," he notes.

He is hoping that increasing numbers of Chinese companies will come to appreciate the benefits of credit insurance, thereby stimulating mainland business. Coface's alliance with Ping An has already established Coface's presence as a provider in the domestic market, and the company is looking to establishing an even stronger position there as more trading companies see the value of credit insurance.

Taken from Career Times 13 April 2007, p. A2
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