How Big Businesses Use Trade Credit Insurance To Get Money From Banks
With nose bleed amounts of insolvencies, lots of businesses are looking to manage the credit risks of their customers.
This insider interview will show you everything you want to know about managing the credit risk of your debtors. This program was conducted by David Pulver and Ewan Berkemeier from Gallagher Trade Credit.
What you will learn from this video:
1. Why trade credit insurance is not really insurance. (What?? – yeah its true)
2. How to rate the strength of your own business according to an S&P style method.
3. How to use insurance products to help enhance your business and make them attractive to financiers and investors.
4. How to use insurance advisors to strengthen your internal processes.
5. Learn what tactics and strategies insurance advisors use on corporates to get more deals across the line.
6. How to use your insurance broker to ‘lean’ on your insurer for more flexibility.
7. Much, much more……..
Video and Transcript below
Daniel: Why do people need your services?
David Pulver: Okay, the key element and the missing factor for most companies that sell on credit is the risk management and the ability to be able to find the resources to manage the receivable effectively. So, where we come in is we’re able to say to the clients that we can provide you some of the risk management tools to be able to better manage your receivable and no one is going to, forever and a day, avoid bad debts, but what we try and do is make sure that we reduce the number of bad debts to a minimum level.
Daniel: And that’s your add-on product and monitoring and . . .
Ewan: Yes. There is really a holistic approach to this. It’s not just the back end. It’s also the front end, ensuring terms and conditions are right from the outset, ensuring that there is a good credit application in place. Are you compliant with certain legislative requirements? Then, through the back end, if there is a bad debt, looking to mitigate that loss and assisting in that process. But, furthermore, if it does ultimately result in a loss, then helping the client to make sure that they’ve complied with the policy terms and conditions and work, where necessary, with the client to ensure their claims paid.
Daniel: When you think about trade credit, you think about, well, it’s insurance. Right? I mean, that’s what I’m getting, but you’re saying what I’m really getting is a lot more than that. I know, I mean, obviously, we use the trade credit products to cover our debtor ledger and, certainly, we lean on the product a lot more than for just insurance.
Daniel: I mean, we’ve had it for a number of years now. We haven’t had to use the insurance component, but we certainly use the credit-checking component.
David: Yes, the risk management factors, yes. The key to it, is to get the perception right and that is that, fundamentally, the product isn’t insurance. Fundamentally, the product is actually risk management. It’s a risk management tool backed up by the insurance. That’s where it sometimes gets a bit confusing where people think that by coming in and purchasing an insurance product, they can go and put that in the bottom drawer and then they can leave it and everything will be fine, but, in reality, it is, in fact, the exact opposite of that. It’s a front-end risk management tool that has to be managed. It has to be worked.
Daniel: I remember when we first started talking a number of years ago my idea was, well, it’s insurance. What’s my payoff going to be if it goes, but you corrected me pretty quickly. It’s like, “No. It’s not about having a loss and using the insurance, it’s making sure you don’t get to that point.”
David: Exactly. And if you look at our client base, over 30% of our clients purely use the trade credit product as part of their financing. So, what they’re doing is they’re going to their bank and saying to the bank, “Mr. Bank Manager, if I buy the trade credit cover and, therefore, have a 90% protection, will you give me a better deal?” And the banks know how the credit product works and they say, “Yes,” because they say, “Well, hang on, we know that you’re not actually buying insurance. You’re actually buying a whole risk management program.”
Daniel: Okay. So, it sort of gives them a little bit of a credit enhancement on the client’s business.
Ewan: And it’s additional security, obviously.
Daniel: Okay. So, in terms of the product, obviously, it’s an investment for someone to take on a trade policy or service like yourselves. But how do clients view it? Do they view it as a cost center or is it more as a profit centre or what? How do you pitch that?
David: Well, I guess the answer to that is, if we’re on the previous point that we raised, and that is that you look at your trade finance type of client, then they consider the premium as part of the cost of financing. So, they simply add it on to their finance costs. If they’re paying 8.5 for their financing and they’re paying .35 to us, then they say, “OK. The title cost is 8.95 or 8.85.” So, they look at it that way.
If you move to our middle sector client base, which is mainly a distributor type base, in other words, the distributors have very skinny balance sheets and really can’t afford a bad debt. They’ll often look at it as a bad debt expense. So, they’ll put it on their P&L as a bad debt expenses. Then, if you move to the other end of the spectrum, which is the big end clients that take very large deductibles, they look at it as a provision. They just treat it as a provision, which, technically, these days is a bit tricky, but that’s still how they see it.
Ewan: But there is a further point here and that is it can facilitate growth in that you can trade with your clients with the security and knowledge that you’re dealing with someone reputable, or, if something does go wrong, then there is a policy there from a protection standpoint.
Daniel: Yes. To protect, obviously.
David: And, ultimately, a sale isn’t a sale, until you get paid.
Daniel: Yes. True. True.
David: The old adage.
Daniel: So, trade credit protection, it’s a high level sale, that you guys undertake when you’re dealing with your clients. Tell me a little bit about your sales process. How does it work in your industry? What do you do to get your clients and how do you manage that?
David: The key to our sales process with all that management of the inception of a program, the key to it is for us, as the broker, to actually understand the receivable. So, we can’t very well advise or assist you, if we don’t understand what your receivables look like. So, the first step in the process is to meet with a potential new client, get a copy of their age trial balance and then actually run through a process of reviewing and profiling those receivables. And that’s crucial. So, from that profiling exercise, you then get an understanding of the type of customer that they’re dealing with and, secondly, what you try to do it is, with the assistance of an underwriter, put forth a rating on their top 20 or their top 50 accounts. So, you try to get an understanding of where they would stand if you are able to apply an S&P style rating to them.
Once we get an understanding of the receivables we’re dealing with, the second thing we look at is, we have a look and say, “Okay. What’s been your bad debt history?” Once we get an understanding of where their bad debts have been and why those bad debts have occurred, we can then react more favourably and say to the client, “If we were to put in a trade credit program, this is the type of underwriter that we would look to go to.”
Daniel: How critical is that, though, just on the underwriter? How critical is it for the type of business that you choose the right underwriter?
David: Vital. I mean, in the case of the IT sector, the IT distributors, there are two underwriters that actually specialise in knowing the customer base in that IT sphere. Those guys are the two that have got the database. So, you would go, automatically, to those two insurers.
Daniel: So, there’s not really a lot of players doing, I mean, you’re only talking about IT, but are there a lot of people that provide trade credit?
David: Overall, in Australia, there are about ten insurers that provide trade credit and then, of those ten there are four that are mainstream insurers with the very large databases. So, those big database operators are putting a lot of money into the risk management process and what they’re doing is they’re getting in as much information on the likely IT customer base and they’re processing that information, putting it through the hands of a professional analyst. Then, they’re putting their own rating onto those customers and, then, what they’re trying to do is then update that file on that particular customer, every six months.
Daniel: One of the things that I noticed, when I first started dealing with yourself was that, and you’ve mentioned this to me a number of times over the years, it’s important . . . I mean, you look at their age trial, you know, the receivables and the quality of their debtors, but it’s important the people in the business, as well as it’s important to get the underwriters involved to see the people, to see the operation and see how it’s run. How critical is that?
David: A very important point. Well, we should backtrack a little bit on that. Part of the program is to bring in risk management elements relative to your customer base, but also bring in risk management elements within your own organisation if you are a new client. So, the purpose of that is to look at the systems that you’re operating in-house and then say, “Are these systems strong enough to stand up to a potentially large bad debt?” If we say they are, then we’d say righto, “Let’s bring the underwriter in so he can see for himself.” But sometimes we’ll say to the client, “Look, we don’t think your systems are quite strong enough and we think that you should improve this, this and this.” Then we bring the underwriter and say to the underwriter, “These are the things that we’ve changed.” So, the underwriter participation is very, very important and the quicker we get the underwriter in to meet you and get comfortable with you, and then have regular reviews with that underwriter on an ongoing basis, the stronger the relationship.
Ewan: We really believe that a tri-partisan relationship is important, particularly with key buyers, whereby not only the underwriter meets your clients but also we do, so we can appropriately understand and make certain recommendations, in that regard.
David: Yes. You take it down to that third step of, not only meeting you as the client, but then also meeting your customers is equally important. Especially in something like the IT sector, where it’s critical that the underwriter not only meets the client, the IT distributor, but also the top ten customers. He will go and physically meet each and every one of them.
Daniel: Especially with the big exposure. I mean, if you’re carrying a $50 million exposure on one debtor.
David: And consistently carrying it. So, you’ve got to know what’s going on. So, you can see from that that the risk management side of it, again, comes back to it, the risk management side, knowing the client, knowing the customer, basically, has got nothing to do with the insurance. It’s that front end that’s at play.
Daniel: So, I don’t know if this is an obvious question. Just looking at your type of business, I mean, I’m not that familiar with your market and how many different players there are but, OK there’s ten insurers. What do you call yourself? You’re more advisers or managers, management side? I mean, how many people are there in your, sort of, game?
David: In terms of the brokering side of it, the advisory side . . .
Daniel: Yes, would you call yourselves a broker or . . .
David: Yes. We do and we call ourselves a broker and advisor. So, we want to be an advisor to the client and we want to be able to go to the market and come back with a best possible deal for the clients, which is the brokering side.
Daniel: This is a hard question for professional services, is how you differentiate yourself from the other players in the market? What do you do?
David: The key for us is to look at our client and say, “Where can we actually bring some value to the table?” That’s the key. If you want to go and, as a client, and deal directly with the underwriter, you can, and you’ll get access to the database and they’ll spin the decisions out to you as of when they want. But if you want to find out what’s going on behind those decisions, you go to someone that can add some value. That’s where we come into play. So, our target markets are clients that have good quality credit management, they’re looking for the enhancements and they’re looking for some advice. Those are the three key factors.
Daniel: Correct me if I’m wrong. If you want to deal directly with the insurer, that’s fine but that’s more of a tick and flick process.
Daniel: Whereas, if you have someone in between, then there’s a little bit more of that, “Well, it’s not let’s think about and talk what’s really going on here.” I mean, I know we’ve had issues with debtors over the years where we’d come back to you guys and said, “Look, what you think?
Ewan: The key thing is, when you’re dealing direct is, obviously, the insurers have got their own interests at hand. Us, as a third party relationship, has the client’s interests at hand and having experience of dealing with the various wordings, can make recommendations in that regard, but, also, truly, provide informed expertise as to how you should manage that policy, what your obligations are, etc.
There are further benefits, particularly, when it comes to obtaining limits and obtaining financial data. Your clients may not necessarily be comfortable with providing information directly to the policyholder. However, they may be willing to do so directly to the insurer, likewise, to a broker as a third-party. The advantage of that is that we can provide a second perspective and, at least, relay that back to the client, whereby, if there is a direct relationship there, the insurer gets information and you don’t become privy to that information or can truly represent yourself in that regard when it comes to informed decision on the financial status or information that’s provided.
Daniel: Okay. So, just on that point. Just because the insurer approves them and says, “Well, yes, they’re fine to deal with,” doesn’t necessarily mean that that’s a good credit or good client for us to take.
David: And if we can get access the client’s customer, then we can get the balance sheet and we can look at the balance sheet and then we can come back and argue, because it will often be given on a confidentiality, so we can’t give the information to the client, but we can argue with the insurer on the facts. If we haven’t seen the balance sheet, you can’t argue. If you think it through, if you’re an insurer and you’ve currently got an exposure on an IT customer at say, 10 million, and the client is trying to get you to increase your exposure to 15 million, there’s usually a reluctance on the part of the insurer to go the extra 5. So, where we step in, is we step in and say, “These are the strengths of the case Mr. Insurer. These are the reasons why you should take your exposure to 15 million on this account.” Now, that is not going to come via a tick and flick. You’ve got to have some genuine involvement and you got to have some analytical skills, and they’ve got to be in this office, and they are. They’re here.
Ewan: And there certainly are other benefits to this process. As the broker, it enables us to better understand our clients, as we can have great insight into our policyholders’ clients. So, from a business standpoint, that enables us to understand our policyholders or our client’s businesses.
The other advantages, particularly when it comes to a re-market or a renewal process, if we had access to a database on our clients and we have access to financial data, then we can also use that information, or at least be able to transfer that information to other insurers and facilitate the renewal process or help, when it comes to obtaining additional cover.
David: The real reason why underwriters in the trade credit arena will reject claims is because the client’s database, the clients credit information, is not good enough or, alternatively, they haven’t followed the set of credit procedures that they’ve agreed with the insurer that they will follow. There are the two main areas. They spin out into one, clients not knowing who they’re dealing with. In other words, asking in underwriter for cover on one ACN and then finding out that the purchase orders have actually been coming from another ACN.
Daniel: That must happen all the time. I mean, I know we have follow procedures and we have it, but I always find myself running through file and say, “Well, hold on a second. How does that invoice that we finance, get in there and it’s got that ABN on it, when that’s not who we’ve agreed to finance,” all of a sudden, and it just happens.
David: And it does. What will happen is if the insurer says that you should have very simply spotted that, and that in your systems, you’ve shown, or you’ve told the insurer that you’ll always spot that, then they’ll deny the claim. They’ll say, “Well, hang on. You’ve told us that you’ve always got that under control,” but the insurers have the same issue. They often find themselves in the same boat. So, they’ll say to you, “How did this happen?” and then they’ll say, “Could we have picked that up? No, we probably couldn’t pick it up either.” So, they’ll say, “We’ll pay the claim on the basis that you couldn’t pick it up and we couldn’t pick it up.”
Daniel: Yes. It’s a push.
David: Yes, it is. But, at the end of the day, getting the ACNs right is still fundamental to being able to do business with your customers because if you can’t get the ACNs right, it makes it very difficult to be able to sue. That’s what the underwriters looking at. Further, you’ve got to remember that if the insurer has been able to go out and get a balance sheet on the company, and he’s got the balance sheet on the original ACN, and he’s done the cover on the original ACN, and then you roll in with the claim on a new ACN, he’s going, “Well, where did this one come from?” And I would have never written cover on that company anyway. So, that’s their problem.
If you get the ACNs right and, let’s face it, we all know you won’t always get them 100% perfect, but make sure that you do have file save systems, that there are regular checks on the purchase orders, to make sure that purchase order ACN and ABN is matching the one that you’ve got on your file. The best way to do that is to have the ACN showing up on your ATB. It’s always sitting there and then someone can say, “Okay. We’ve got a purchase order. Let’s have a look at it and see if it does match.” That regular check of purchase orders is vital.
Then, the second stage and, fundamentally, the issue is of people then telling the insurer or warranting to an insurer that we always trade within 60 days. Well, if you’re going to tell the insurer that you always trade within 60 days, guess what, you’ve got to do it. So, if you then get a claim that comes in and there’s 90 and 120 days owing, he’s going to say, “I want to knock out the 90 and the 120 day bit because I thought you only ever dealt up to 60 days.”
Daniel: So, once it hit 60, you should’ve cut the credit. That’s it their out of terms.
David: Or, alternatively, say you go to the underwriter and say, “Can we please have an extension of terms on this account,” because he’s always going to trade 90 days. So, there are the two fundamentals within system that go wrong and then have underwriters coming back saying, “I can’t see why I should pay your claim.” Then, on the other side of it, on the administration side of it, the ongoing administration, the real fundamental and, still the most difficult thing for some clients, is the reporting and that is the underwriter says, “If it goes outside of 90 days, I want to know about it, and I want you to confirm that you stop the account and that you’re taking some action to bring the account back into line.” Sometimes, people decide that it would be best if they don’t tell the insurer that the account’s overdue. You can do that, but it will backfire because when it does go broke, the insurer will ask for 12 months of trading on that account. He’ll spot the items where it was consistently overdue. He’ll say, “You didn’t tell me that it was overdue. If I’d known it was overdue, I would’ve taken some action, here, within our office to review that account.”
Daniel: Well, okay, what about, like, let’s talk about, for example, our account. We have say 1000 debtors and they’re going in and out of over 200 your overdue on. We end up just going, “Look, here’s our ledger, here’s all the customers, here’s where they’re sitting and these are the ones we think are the problems.” What are these companies do, these bigger companies who are in similar situations, I mean, they must be reporting all the time.
David: They are reporting all time because what we’re saying to you is get the discipline, so that at the end of the 90-day period, on the 97th day, someone has to do the report. Why are you doing the report? You’re not doing the report simply to give it to the insurer. You’re doing the report so that someone in your office does something about that overdue item. So, that’s the fundamental. The fundamental is at the 97th day we want something to happen and that happening is to, one, do something about the account and then, secondly, let the insurer know what action it is that you are doing.
Ewan: There are numerous reasons as to why accounts can become overdue. It’s not simply because they can’t pay. Invoices can be thrown into query. There can be disputes around work being done and the like.
Daniel: It’s rarely that it’s because they can’t pay, I find.
Ewan: That’s right, and there is certainly discretion under a trade credit policy. You can manage that process to allow leeway, to ensure that it’s managed within a certain timeline. The key point is that if there are any questions around it, then, as the broker, we’re also always available to consult or assist with that process
Daniel: Okay. So, let’s talk a little bit about something we do a little bit of and then some of the export finance. We do offer it as a product. We don’t do a lot of it because there’s just simply not that much demand, but how does an export insurance contract go? Say I want to cover my overseas receivables. Now, in Australia, it’s a little bit easier. You can identify who the customer is or the AC, but when you’re dealing internationally that just opens up a whole raft of new issues in terms of how do I identify who we’re dealing with? What are some of the issues there?
David: Sure. Just to backtrack one minute, to go back to the claims just for one second, the three areas that we covered off on the claims, if the clients do cover off on those three areas, they’ll get their claims paid, and that’s the key to it. The key to it is that they’ll get a 90% payout up to the insured credit limit.
Daniel: So, make sure you’ve got the right ACN, you’re managing your reportables . . .
David: And you’re doing something.
David: It’s all about doing something. What are you going to do? Turning to the export question, the insurers on the export side can’t take the same line that you would do on the domestic. As you say, the domestic is pretty straightforward. You’ve got an ACN and ABN, you’ve got a unique identifier and you’ve got court system that is strong in enabling you to go and action an unpaid debt. Once we get overseas, we’ve got a totally different ballgame. A lot of markets that our clients are dealing with offshore, we don’t have those things. For example, if you go to China, you might find in China that the unique identifying number for a company may be completely different in one province of China than it is for another one. So, the underwriters are well aware of that and they take a different view. They say, “We can’t be as tight and as disciplined on that side of it with an export transaction. So, therefore, we want to be tighter and more disciplined in other ways.” So, what they’ll do on the export transactions, is they’ll say, “Yes, there’s a very good chance that you may not always get your company name right. There’s a very good chance that when you come to take legal action, you may not be able to take the same sort of legal action as you would here in Australia. So, what we want you to do is get your documentation tighter, so your bill of lading and to get your tightest possible credit terms to compensate for that.”
Ewan: So that might mean, it could be changing to cash against documents, rather than credit.
David: That may well be. Yes. And, in a lot of instances, the underwriter will say to you, “Okay, if you’re moving into China, why don’t you do your first few transactions on a letter of credit. Then why don’t you move to cash against documents after you’ve developed a reasonable patent with that customer and then why don’t you, then a year later, look at whether you should offer credit terms?” By that stage, you may well get a better understanding of exactly who your customer is, what the legal status is and what the unique identifying numbers are. Further, you might’ve then been able to get a balance sheet from that customer, which we can then go and have a look at. Remember, a lot of the underwriters have got big offices in China. So they can issue it there.
Daniel: Really? So, I didn’t know that. Yes. So, do a lot of people say, we’ll use China again, but, is there a lot of people dealing on credit there?
David: Oh, yes.
Daniel: But they’re obviously focused on the bigger multinational types of clients and customers.
David: No, not necessarily. No. Not at all. If you look at it, a lot of the business that’s going to China, that we would see, is food.
Daniel: Of course. Of course.
David: And a lot of that business is not with the big multinationals. It’s, in fact, with relatively small players. You might have a distribution arm in Gonjo or an arm in Shanghai, and that may be it. So, no, it’s a completely different business altogether. And, we shouldn’t single out China because there a lot of other markets that Australian companies go to where the same issues apply. That is, when you do have an overdue debt, what are your remedies for collection? In a lot of cases those remedies for collection are not good. If you’ve been able to take up a trade credit policy, with a sophisticated trade credit underwriter, he will then come in and say to you, “I will come in and take over the collection activities for you and run it for you.”
Ewan: The other real advantage of having a trade credit insurance policy, when it comes to export sales, is the database they have. They operate in countries all over the world. They have access to information within specific countries and they have underwriters on the ground over there. So, whilst you, as a policyholder, may not be in a position to go out and physically visit that client, at least, in certain instances, you know that someone has on your behalf.
Daniel: Yes. You’re not flying blind.
Ewan: Absolutely. Absolutely.
Daniel: So, just going back to, just something that brings us back to what we do, and one of the critical things we find is what we call “proof of debt.” When we deliver goods and product, this is moving off the export stuff, now, before we can buy an invoice, we generally like to see that there’s some proof that that works been done, that the goods are delivered.
David: That the delivery’s been made
Daniel: What’s the insurance perspective on that? Is it similar to what we would look for in terms of proof of debt, or?
David: Not nearly as disciplined as what you are because the insurer is saying that he’s had a look at that customer and that he thinks that customer’s credit worthy for, say, $200,000. So, he’s made his mark, he’s drawn his line in the sand and said, “That guy’s good for $200,000.” He doesn’t, then, say, “Well, I need to know, absolutely, whether you made the delivery or not.” That’s the client’s role to make sure of that. So, the insurer is not anywhere near as tight on that aspect of it at all.
Daniel: They’re more looking to solvency, generally.
David: Yes. And they’re saying, “If the company does go broke, then you’ve got to show me that you can get your debt admitted by the liquidator for the $200,000. If you can’t, then we won’t be paying the claim.”
Daniel: But, in terms of that, they would be looking, probably, not as strong as what we would look for. I mean, a lot of time, if we’ve got a single debtor, we want a special signoff. But you want some sort of proof that the work was done.
David: Well, Daniel, the proof is actually with liquidator because the liquidator at the end of the day, is the referee and he says, “Yes. I have checked your proof of debt and, yes, you did ship $200,000 worth of goods to this company. I’ll sign off on that and admit your debt.”
Daniel: Yes. Got you.
David: And the insurer will always accept the admitted debt of the liquidator as the final arbiter.
Daniel: Just going back, just one other thing that I wanted to cover and it goes back to insurance and the service levels with the insurance. What I have found over the years is some clients think that they’ve got trade credit insurance now and they’ve sent it off to the insurer and they’ve approved the debtor, but there’s some element in there that thinks they’re not still sure about the client, the customer that they’re supplying. I found that to be a bit of a dangerous path to travel. You’ve still got to, sort of, use your judgment and your gut instinct on your debtor and look at their behaviour. I mean, do you find that a lot of clients just say, “Look, now we’ve got insurance and we can now supply them?”
David: Well, there’s a blend of attitude. There’s some people that will accept the insurer and say, “That’s it.” There’s the vast bulk of our clients who will not just simply live on that. They’ll say, “We will still undertake our own inquiries, but to a certain extent,” and the extent is the issue. But, there are some, over here, that say, “We’ll take whatever the insurer gives us.” The middle says, “No,” and at this other end they’re a group that say, “Yes, we have the insurance, but we’ll always undertake our own complicated detailed inquiries,” and we’ll have both. We’ll have our own in-house team and we’ll have the insurer’s. They’ll balance those two decisions up and make a decision about where they trade. That’s really the big end of it. The big end, there will always be a reasonably senior credit team there, and there’ll be analysts in that in-house credit team, as well as the insurer, and they’ll often contest the decisions.
Daniel: When you say contest, I mean, in which direction?
David: It depends. Well, often, I’ve seen situations where the client has said, “Well, I’m not happy going as far as the insurer wants to go.”
Daniel: Well, that insurer can come back and say, “Why?”
David: Yes, he will.
Daniel: “What do you know that I don’t know?”
Ewan: Absolutely. And you’re familiar with signs, when you see something that may be concerning, when you see spreading payment patterns or you’re seeing payments being pushed out or you see that all of a sudden all the invoices get queried. There could be any number of reasons. Again, what one of the advantages is and, to go back to what David said before, is having a database there. If you’re being affected, it’s highly likely that someone else is, too. And with the amount of clients, that an insurer may have, that they also are privy to a lot of information in terms of the month layout and review reporting information comes in. And based on that, they can then make informed decisions or they can also identify patterns that may be familiar or similar to what your experiencing and then feedback that information, back to us.
Daniel: Do you often get there’s a whole raft of them who say how debtors are behaving and everyone’s reporting at the same time?
David: Yes, definitely.
Ewan: It would be more likely than not that would happens.
David: Kell and Rigby was a classic case in point where most of the insurer’s had, basically, reduced their exposure to that builder over the last 12 months and that was because of a series of reports of overdue accounts. They just said, “We want to reduce our exposure here.” The idea of that is if you match the insurer and you come off at the same time as they have, then your exposure to Kell and Rigby, at the end of the day, was probably very limited.
Ewan: But, generally speaking, across the board, there is no real industry that’s entirely sheltered from everything. That certainly with the insolvency stats of late. They were at a historic high last year and, again, the most recent statistics from the start of the year have demonstrated that those haven’t come off. So, in terms of what’s to come, it’s certainly not looking up at this stage and in saying there is very much a cautionary approach across the board.
Daniel: Well, Ewan, David, thank you very much.
David: Thank you.
Ewan: It’s a pleasure. Thank you
David: You’re welcome.