Head of XoL Alexia Parmentier and Head of Special Products Tim Hoggarth reveal their expert insights into the Excess of Loss market
How did you come to work for Euler Hermes?
Tim: Alexia and I were working as Excess of Loss (XoL) underwriters at AIG, but after several years there we started looking for a new challenge. At the time, Euler Hermes was trying to expand its product range into XoL and so we came in to set up the team. It was an opportunity for us to be innovative and entrepreneurial within a stable environment that understood credit insurance as a concept.
Alexia: Establishing the XoL and Special Products team here was a chance for us to put our experience to the test in a new environment and do things in a different way.
In simple terms, what is Excess of Loss?
Tim: With XoL products, clients retain more of the risk than they would do under a normal trade credit insurance policy. As a result, we give clients more authority to make their own decisions over such things as credit limits. We don’t expect to pay out claims year-on-year but we are there for clients in times of crisis. Because our clients’ credit management is at the core of the XoL product, it tends to be targeted at the more sophisticated, bigger clients but we do have some mid-sized clients as well.
What are the key responsibilities of the XoL team?
Alexia: The XoL team is responsible for developing and managing the XoL and Securitisation portfolios within the region. One characteristic of our team is that each underwriter performs what would normally be several roles done separately:
- New business underwriting, which is assessing new business cases and developing broker relationships;
- Account management, i.e. looking after a set portfolio of insureds;
- Commercial underwriting, i.e. writing policy wordings or endorsements;
- Risk underwriting, which is making decisions on our clients’ customers.
This makes the job really interesting and keeps us on our toes, and means we always have something new to learn. It is also great as each team member brings a different background and expertise, which is always useful.
Tim: The XoL team has the authority to make decisions on a wide range of subjects, from credit limits to commercial terms. So when we meet clients we can negotiate and decide things there and then instead of having to refer back to the office, which could cause delays.
What expertise do you bring to your roles heading up the XoL team?
Tim: Alexia and I have worked as XoL underwriters for almost 20 years. We’re therefore able to combine commercial and risk viewpoints that enables us to make better informed decisions. We may say ‘no’ to people on the commercial side because we have a wider knowledge of the client’s business and associated risks.
Alexia: We are firm believers that if you believe in something, you should see it through and not be scared to keep asking questions, including: ‘why not?’ when the answer is ‘no’.
What makes Euler Hermes’ XoL solutions unique?
Tim: The main thing is our great risk database of more than 40 million companies. Usually XoL underwriters don’t have access to something like this. We’ve found our clients really value the information we can bring on their customers, so we have started to share our specialist data as an additional service. This makes our offering unique on the market.
Alexia: When we joined Euler Hermes we were amazed by both the quantity and quality of information at our fingertips. We also have local teams that can go out and visit clients all over the world, which is an offering you wouldn’t normally be able to provide as an XoL underwriter. Euler Hermes’ S&P rating is also a real advantage when it comes to policies supporting financing.
What exciting new product developments are on the horizon?
Alexia: There are lots! We’re developing an insurance policy to support Securitisation solutions. We have a new policy wording, which removes a lot of the conditionality of the usual credit insurance products, and we have developed a new IT system to go alongside the policy, improving certainty for funders that the receivables they have invested in are covered.
Tim: There are many buzzwords in trade credit insurance at the moment – fintech and blockchain for example, so we’re trying to develop systems and products that tie in with the concepts that are likely to have longevity in the future. It’s vital that we understand these industry developments and update our offering in line with them.
On a more personal note, what item do you rely on the most?
Alexia: My phone. I use it to do everything from shopping to booking holidays to exercising and emailing. It’s harder to lose your phone than your wallet these days.
Tim: My car – I live out in the countryside, and I can’t go anywhere without it.
To whom to do you turn for work advice?
Alexia: For work matters, Tim. When you find someone you can trust, you stick with them. It amazes people that we give the same answer to questions, even when we’re asked separately.
Tim: The first person I turn to is Alexia. We’ve been working together for 15 years and at three different companies.
What does a perfect weekend look like?
Alexia: I would go away with my husband and son to a place I’ve never been before. And food has to be involved if it’s to be an ideal weekend!
Tim: I’d like a weekend at home with my family. I would watch my kids play sport and hopefully it would be sunny enough to have a barbeque in the evening with some friends.