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  • Turnover up 2.2% at constant exchange rates (+1.8% at current exchange rates) to €1,894 million
  • Ordinary operating income, increasing by 7.8% to €337 million
  • Net income up 5% year-on-year to €232.5 million

“Credit insurance will be of even greater importance to our clients given recent macroeconomic news,” declared Wilfried Verstraete, Chairman of the Euler Hermes Board of Management. “If this translates into another slowdown in Europe, in particular in Germany and France, it could lead to a resurgence in insolvencies. We are equipped for this scenario, as demonstrated by past results and shown again this quarter. Our growth engines outside Europe have delivered the expected momentum and operating income is solid.”

  1. Results for the first nine months of 2014
  2. Key figures*
 P&L information

€ million

9M 2014 9M 2013 Variation vs. 30 September 2013
Earned premiums 1,588.6 1,553.4 35.1 2.3%
Service revenues 305.0 307.5 -2.4 -0.8%
Turnover 1,893.6 1,860.9 32.7 1.8%
Net technical result 271.0 242.0 29.0 12.0%
Net investment income 66.0 70.7 -4.7 -6.6%
Ordinary operating income 337.0 312.7 24.3 7.8%
Non-ordinary operating

income & expenses

-21.7 21.8 -43.5
Operating income 315.2 334.4 -19.2 -5.8%
Net income, Group share 232.5 221.4 11.1 5.0%
Net claims ratio 48.2% 52.6% -4.4 pts
Net expense ratio 26.5% 24.2% 2.3 pts
Net combined ratio 74.7% 76.8% -2.1 pts


Balance sheet information

€ million

30 September 2014 31 December 2013 Variation vs. 31 December 2013


Total assets 6,417.5 6,062.7 354.8 5.9%
Shareholders’ equity, Group share 2,494.7 2,461.9 32.8 1.3%
Total financial liabilities 273.4 261.7 11.7 4.5%

*Not audited

Shareholders’ equity increased by €32.8 million during the first nine months of 2014, driven by the positive operating cash flows partly offset by the dividend payment made in June.


At the end of September, the Group grew its total turnover by 2.2% at constant exchange rates. While growth markets (including Americas, Asia and the Middle East) increased their business by 13.9% versus the previous year at constant exchange rates, mature markets overall posted limited growth (+0.3%).


€ million

30 September  2014 30 September  2013 (published) Variation % 30 September  2013 (1) Variation % (1)
Germany, Austria, Switzerland 570.3 596.4 -4.4% 596.4 -4.4%
France 302.5 305.0 -0.8% 305.0 -0.8%


Northern Europe 413.1 409.1 1.0% 410.8 0.6%
Mediterranean Countries, Middle East & Africa 245.9 230.3 6.8% 227.7 8.0%
Americas 196.0 204.4 -4.1% 176.0 11.4%
Asia-Pacific 76.2 69.2 10.1% 66.2 15.0%
Non-consolidated OE’s and other (2) 89.6 46.6 N/A 70.8 N/A
Euler Hermes Group 1,893.6 1,860.9 1.8% 1,852.8 2.2%

Area contribution : After intra-region eliminations & before inter-region eliminations

(1) At constant exchange rates and pro forma (Mexico & Chile in 2013 in EH Re.)

(2) Corporate entities + inter-region eliminations

Premiums grew by 2.3% at actual exchange rates and 2.7% at constant exchange rates. Good commercial traction in non-mature markets and a strong momentum in new products are compensating pressure on prices and flat insured turnover volumes in mature markets, especially in Germany and France.

Service revenues, the second component of turnover, remained under pressure as collection revenues follow the downward trend in frequency claims.

Operating income

Euler Hermes delivered a robust ordinary operating income at €337.0 million, up 7.8% year-on-year.

This improvement is driven by the net technical result (+€29.0 million), which is a result of a lower combined ratio (74.7% vs. 76.8% end of September 2013).

The net loss ratio stands at a healthy level of 48.2%, 4.4 pts below last year, driven by lower claims in all regions and all lines of business. The net loss ratio also benefits from a 15.5% positive net run-off from previous attachment years, which compares to 9.6% at the end of September 2013, which was impacted by one large claim in Spain.

The net expense ratio is up 2.3 points compared to the same period in 2013 (26.5% versus 24.2%), due to a lower contribution from reinsurance commissions and pressure on the collection margin.

Net investment income is €66.0 million vs. € 70.7 million at the end of September 2013, primarily due to lower reinvestment yields on the bond portfolio.

Non-ordinary operating expenses include a €17.2 million impairment at the end of September 2014 related to Germany headquarters in Hamburg, following the decision to dispose of the premises and move to a new building in 2018. Conversely, in 2013, the non-ordinary operating income included a €31.7 million gain linked to the contribution of entities to the Solunion joint venture. Hence the 5.8% year-on-year decrease in total operating income. Excluding these two one-off impacts in 2014 and in 2013, operating income is up 9.8%.

Investment portfolio

At the end of September 2014, the market value of the Group’s investment portfolio is up €201 million to €4,364 million versus €4,163 million at 2013 year-end, driven by positive operating cash flows.

Net income

Net income rose by 5.0% year-on-year, standing at €232.5 million. This increase is linked to the good performance of Solunion, captured in the income from entities consolidated at equity, combined with a lower average tax rate.


A swift recovery in Europe is now unlikely as the necessary building blocks still need to be secured.

Though we expect timid positive developments in 2015, both for emerging and advanced economies,  liquidity, demand and political risk will continue to subdue global growth (+2.9% in 2015, after +2.5% in 2014) and global trade (+4.5% in 2015, after +3.7% in 2014).

In this environment, growing the business outside traditional markets remains our priority. Vigilance in risk underwriting is the steady rudder by which we will continue to steer, in order to ensure the enduring profitability of our business.

Results* for the third quarter of 2014


€ million

Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Variation vs. Q3 2013


Earned premiums 524.5 529.3 534.7 525.6 508.9 15.6 3.1%
Service revenues 100.4 101.8 102.8 99.8 99.3 1.2 1.2%
Turnover 625.0 631.1 637.5 625.3 608.2 16.8 2.8%
Net technical result 75.1 101.9 93.9 103.3 75.1 0.1 0.1%
Net investment income 17.1 25.4 23.4 15.5 13.3 3.8 28.4%
Ordinary operating income 92.3 127.3 117.3 118.8 88.4 3.9 4.4%
Non-ordinary operating income & expenses -19.7 -1.0 -1.1 5.4 -7.3 -12.4 N/A
Operating income 72.6 126.4 116.3 124.2 81.1 -8.5 -10.5%
Net income, Group share 59.3 90.5 82.7 92.3 55.0 4.3 7.8%
Net claims ratio 50.9% 44.4% 49.1% 44.3% 52.8% -1.8 pt
Net expense ratio 27.1% 27.0% 25.5% 26.6% 24.9% 2.2 pts
Net combined ratio 78.0% 71.5% 74.6% 70.9% 77.6% 0.4 pt

*Not audited

Financial and regulated information are available on Euler Hermes’ website

The financial documentation section includes the press release, the consolidated financial statements and the presentation of the results for first nine months of 2014 to analysts.

On Tuesday, 28 October 2014, the Group Management Board of Euler Hermes (ELE.PA), a worldwide leader in credit insurance and in the areas of bonding and collections, presented its consolidated results as of 30 September 2014 to the Euler Hermes Supervisory Board. The results have been reviewed by the Audit Committee.


Northern Trust: Outsourcing Accelerates Through Pandemic as Investment Managers Seek to Improve Margins, Enhance Business Resilience, and Future-Proof Operations



Northern Trust: Outsourcing Accelerates Through Pandemic as Investment Managers Seek to Improve Margins, Enhance Business Resilience, and Future-Proof Operations 1

White Paper Sees Increase in Managers Outsourcing Middle and Front Office Functions to Achieve Optimal Business Structures

According to a white paper published today by Northern Trust (Nasdaq: NTRS), investment managers of all sizes and strategies have been prompted to undertake a comprehensive review of their operating models as a result of the Covid-19 pandemic which has accelerated existing trends that are compounding cost pressures. This has led increasing numbers of managers to outsource in-house dealing and other functions, such as foreign exchange and transition management, hitherto seen as core.

While cost savings remain a core driver, and indeed are one outcome of outsourcing, costs are no longer the only focus. Far from being solely a defensive reaction to increased pressure on margins, the white paper (‘From Niche to Norm’) describes outsourcing as part of the target operating model, or moving toward the ‘Optimal State’ for many investment managers, and  explains how the focus “has expanded to the variety of other potential benefits offered – enhanced capabilities, improved governance and operational resilience.”

Gary Paulin, global head of Integrated Trading Solutions at Northern Trust Capital Markets said: “The pandemic has challenged a range of operational assumptions. Working from home has, for example, questioned the need for a portfolio manager to be in close proximity with the dealing desk. Previously considered essential, the pandemic has effectively forced firms to ‘outsource‘ their trading desks to remote working setups and the effectiveness of this process has disproved the requirement for proximity, in turn, easing the path to third-party outsourcing. Many investment managers are actively considering outsourcing to a hyper-scale, expert provider as a potential, cost efficient solution – one that maintains service quality and, hopefully, improves it whilst adding resiliency.”

Northern Trust’s white paper compares outsourced trading to software-as-a-service stating: “instead of carrying the cost and complexity of running an in-house solution, firms move to an outsourced one, free up capital to invest in strategic growth and move costs from a fixed to a variable basis in line with the direction of travel for revenues.” 

Guy Gibson, global head of Institutional Brokerage at Northern Trust Capital Markets said: “The opportunity to deploy capital to build new fund structures, develop new offerings, focus on distribution and enhance in-house research has been taken up by several of our clients to the benefit of their investment approach, and to the benefit of their investors.  Additionally, in the last two months alone, many firms have recognized that outsourcing to a well-capitalized, global platform has enabled them to take advantage of cost-contained growth opportunities in new markets.”

A further development, which has echoes of the journey the technology industry has already undertaken, is the move towards ‘whole office’ solutions, which represent the next potential wave in outsourcing.

According to Paulin; “recently we have observed a growing number of managers wanting to outsource to a single, hyper-scale professional service provider who can do everything, everywhere. This aligns with Northern Trust’s strategy to deliver platform solutions for the whole office, serving our clients’ needs across the entire investment lifecycle.”

The white paper can be downloaded here.

Integrated Trading Solutions is Northern Trust’s outsourced trading capability that combines worldwide locations and trading expertise in equities and fixed income and derivatives with access to global markets, high-quality liquidity and an integrated middle and back office service as well as other services, such as FX. It helps asset owners and asset managers to meaningfully lower costs, reduce risk, manage regulatory compliance and enhance transparency and operational efficiency.

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How are investors traversing the UK’s transition out of lockdown?



How are investors traversing the UK’s transition out of lockdown? 2

By Giles Coghlan, Chief Currency Analyst, HYCM

Just when we thought we had overcome the initial health challenges posed by COVID-19, the UK Government has once again introduced lockdown measures in certain regions to curb a rise in new cases. This is happening at a time when the government is trying to bring about the country’s post-pandemic recovery and prevent a prolonged economic downturn.

This is the reality of the “new normal” – a constant battle to both contain the spread of the virus but also avoid extended economic stagnation.

Of course, no matter how many policies are introduced to spur on investment, traders and investors are likely to act with caution for the foreseeable future. There are simply too many unknowns to content with at the moment.

To try and measure investor sentiment towards different asset classes at present, HYCM recently commissioned research to uncover which assets investors are planning to invest in over the coming 12 months. After surveying over 900 UK-based investors, our figures show just how COVID-19 has affected different investor portfolios. I have analysed the key findings below.

Cash retreat

At present, it seems that by far the most common asset class for investors is cash savings, with 78% of investors identifying as having some form of savings in a bank account. Other popular assets were stocks and shares (48%) and property (38%). While not surprising, when viewed in the context of investor’s future plans for investment, it becomes evident that security, above all else, is what investors are currently seeking.

A third of those surveyed (32%) said that they intended to put more of their wealth into their savings account, the most common strategy by far among those surveyed. This was followed by stocks and shares (21%), property (17%), and fixed interest securities (17%).

When asked about what impact COVID-19 has had on their portfolios throughout 2020, 43% stated that their portfolio had decreased in value as a consequence of the pandemic. This has evidently had an effect on investors’ mindsets, with 73% stating that they were not planning on making any major investment decisions for the rest of the year.

Looking at the road ahead

So, it seems that many investors are adopting a wait-and-see approach; hoping that the promise of a V-shaped recovery comes to fruition. The issue, however, is that this exact type of hesitancy when it comes to investing may well slow the pace of economic recovery. Financial markets need stimulus in order to help facilitate a post-pandemic economic resurgence, but if said financial stimulation only arrives once the recovery has already begun, the economy risks extended stagnation.

It seems, then, that there are two possible set outcomes on the path ahead. The first is a steady decline in COVID-19 cases, then an economic downturn as the markets correct themselves, followed by a return to relative economic stability. The second potential outcome is a second spike of COVID-19 cases which incurs a second nationwide lockdown – delaying an economic revival for the foreseeable future. At present, the former of these two scenarios is seemingly playing out with economic growth and GDP steadily increasing; but recent COVID-19 case upticks show that it’s still too soon to be certain of either scenario.

A cautious approach, therefore, will evidently remain the most common investment strategy looking ahead. But investors must remember that, even in the most uncertain times, there are always opportunities for returns on investment. Merely transforming a varied portfolio into cash savings risks a long-term decline in value.

High Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information please refer to HYCM’s Risk Disclosure.

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Hatton Gardens 5 top tips for investing in Diamonds



Hatton Gardens 5 top tips for investing in Diamonds 3

By Ben Stinson, Head of eCommerce at Diamonds Factory

Investing in diamonds can be extremely rewarding, but only if you know what to look for. For investors who lack experience, finding your diamond in the rough can be quite daunting.

For even the most beginner of diamond investors, the essentials are fairly obvious. For instance, you need to ask yourself will the diamond hold its value over time? What’s the overall condition of the stone and the jewellery? Is there history behind the item in question?

Although common sense plays a big part in investing, people often need insider tips and tricks to go from beginner to expert. Tony French, the in-house Diamond Consultant, at Diamonds Factory shares his professional knowledge on the 5 most important things to look for when investing in diamonds.

1: Using cut, weight and colour to determine value

Firstly, consider the shape, colour, and weight of your diamond, as this can play a pivotal role in guaranteeing growth in the value of your item. Granted, investing trends change with time, but a round cut of your diamond will almost always be the most sought after. The cut of your diamond is incredibly important, as it can influence the sparkle and therefore, the overall value. It’s a similar story for the intensity of some colours, such as Pink, Red, Blue, Green etc. Concerning weight, the heavier (bigger) stones will generally increase in value by a bigger percentage. Collectively these factors also contribute to the supply and demand aspect, which will determine their high price, and will ensure your item is re-sellable.

2: Provenance

Looking for significant value? Well, aim to own jewellery or diamonds that come from an important public figure. If you’re lucky enough to own a piece that has significant history, or was owned by a celebrity or person of interest, it’s an absolute must to have concrete evidence of this. Immediately, this proof will increase an item’s overall value, and there’s a good chance the stardom of your item might drum up interest amongst diehard fans, increasing the value even further…

Equally, it’s possible to proactively bring provenance to unique diamonds of yours. For instance, you can offer to loan bespoke, or unusual pieces for film, theatre, or TV performances – then it can be advertised as worn by xyz.

3: Find the source

Ben Stinson

Ben Stinson

Establishing your diamond’s source is one of the most important things you can do when investing in diamonds. If you’re starting out, try to purchase diamonds that have NOT been owned by too many people, as the overall value of the diamond will reflect multiple ownership. Alternatively, I’d always recommend buying from suppliers like ourselves or other suppliers and retailers, who buy directly from the people who have had them certified.

Primarily, this will allow you to have a greater degree of transparency, which is crucial when buying such a valuable item. Next, you should immediately see an increase in value of your diamonds, as identifying a source will allow traceability and therefore, market context.

4: Certification

Linked closely with my previous point, is the requirement to ensure that your diamonds are certified by a credible lab, and you have the evidence to prove so (a written document with specific grading details about your diamonds) – this will remove any doubts of impropriety.

It’s essential to remember that not all labs are the same, and many labs are better than others. Both the AGS (American Gem Society) and GIA (Gemological Institute of America) have great reputations and are world renowned. I’d recommend doing your own research into the labs, and when you’ve found the pieces that you’d like to invest in, then make an informed decision based upon your findings. Ultimately, proving certification will make your stones easier to insure, and deep down, you can have peace of mind knowing you have got what you have paid for.

Don’t forget to keep this paperwork in a safe location as well – you’d be surprised how many people we’ve met who have lost, or forget where they’ve placed it.

5:  Patience is a virtue…

If the market is strong, it might be tempting to look for an immediate sale once you’ve purchased a high value item. However, I suggest holding onto your diamonds for some time before even thinking about selling. More often than not, an item is more likely to increase in value over a few years than a few days – try and wait a little longer!

Equally, I would encourage having your diamonds, or jewellery professionally valued regularly. If you don’t have the knowledge to make a rough judgement on how much your pieces are worth, a consultant or expert can provide both a valuation, and contextualise that amount in the wider market. From there, you should be empowered with the knowledge to decide whether to keep or sell.

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