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Country Guide 2018 : South Africa

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The 2018 South Africa Country Guide is brought to you by firstEquity Credit and Political Risk, our Astreos partner. Founded in 2009, first Equity has soon become a force to be accounted for.

About firstEquity Credit and Political Risk (Pty) Ltd

Main Contact

Key Information

Expertise

Myles Marrian
Director
+27 11 510 1310

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Date of Establishment: 2007
Ranking: 5
Employees: 6
Credit Insurance Specialists: 3
Nb of offices: 3 (Johannesburg, Durban and Cape Town)

  • Credit Insurance overview
  • Business practice
  • Debt collection practice

Latest News

firstEquity Credit and Political Risk has appointed 2 new staff members in the past year, namely Michelle Thijs and Vaughn Hutton. Michelle is currently working under supervision as a Trade Credit Broker. Vaughn has joined the team in the capacity of Senior Account Executive.

 

Vaughn joined FECPR in February this year after having worked at Credit Guarantee for thirty two years many of these being in senior underwriting and claims management positions. Vaughn has extensive experience in the building, electrical, steel and allied industries and will add great value to our portfolio in these industries.

 

Vaughn will provide more add on services to our clients. The first of these has been to go into a debt collecting partnership with Status Debt Corporation. This company has debt collecting agreements with the major credit insurance companies and has many years of successful collection experience. In addition to the debt collection service we now also offer a risk assessment service for prospective new clients as well as for existing clients. By offering these services to our clients we have also created another barrier of entry from opposition brokers in the specialist credit insurance market.

 

As a group firstEquity and a division of PSG Insure have partnered together which came into effect at the end of 2017. PSG have been in operation since 1998 have close to 200 offices throughout South Africa. PSG offer a full range of short terms insurance products.

 

Furthermore a new product was launched in 2017 by Hollard that gives clients the choice of insuring individual trade debtors, rather than only selecting comprehensive cover.

Macro-economical environment

Main Indicators

Top Commercial Activities

GDP Growth

  • 2017 – 1.3%
  • 2018 – 1.7% – forecast
  • 2019 – 1.9% – forecast

Population: 57 million
Unemployment Rate: 26.7%

  1. Finance – 20%
  2. Government – 18%
  3. Trade – 15%
  4. Manufacturing – 13%
  5. Transport – 10%
  6. Mining – 8%

 

 

Strengths

  • Rich in natural resources, i.e. gold, platinum and carbon
  • Attract large volumes of foreign capital
  • Major tourist destination

Weaknesses

  • High Unemployment Rate / skills shortage (skilled workers immigrating) / Crime/ Poverty
  • Low growth trap due to inherent inequality
  • Dependent on foreign investment to finance our growth

 

What's new?

27 renewable power producer agreements which will provide a boost for manufacturing and construction sectors. President Cyril Ramaphosa’s initiative to raise R1.2 trillion in new investments over the next five years. Former president Jacob Zuma will finally be granted his day in court to answer to 16 charges related to corruption, money laundering, racketeering and fraud.

Trade Credit Insurance

Credit Insurance Market

  • Focused on ground-up insurance
  • Usual Country Habits: Cover of binding orders
  • Laws related: Company law

Available products

  • Ground-up
  • Catastrophe trade credit products
  • Bonds & guarantees
  • Contingency policies
  • Online SMME Cover*
  • Single debtor policies*

Insolvencies

  • Insolvency Proceedings:  Business Rescue or Liquidation
  • Main Insolvencies last year: Intertrans Oil SA (R1bn turnover).
  • Number and amount of insolvencies: 1868
  • Average Day Sales Out (DSO): 45 – 70 Days

Main Players and ranking

  • 10% Santam

  • 60% CGIC

  • 15% Coface

  • 8% Lombard

  • 2% Hollard

  • 5% Euler Hermes