Press kit - EULER HERMES

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					Press Kit

                                             April 2008

           “Helping companies to grow their
             business all over the world”

Press contact:
Samuel Beauchef
Euler Hermes group press relations manager
Tel: +33 (0)1 4070 5619

Credit insurance, for secure business development                                                                p. 2

•        Customers, a source of profit and financial risk
•        Globalisation exposes companies to risks
•        Trade receivables: underestimated risks
•        Credit insurance, an effective weapon against unpaid debts
•        The positive impact of credit insurance
•        Credit insurance: how does it work?
•        Managing trade receivables
•        Credit insurance, Euler Hermes’ core business

Euler Hermes, an insurance provider and a partner                                                                p. 8

•        The worldwide leader in credit insurance
•        Operating in major international markets
•        A Business Model integrating micro- and macro-economic analysis…
•        … offering companies unrivalled intelligence and efficiency

Business intelligence and information sharing                                                                    p. 12

•        Exclusive information
•        The “Grade”: Euler Hermes’ system to monitor, assess, and analyse companies
•        An integrated risk management system
•        Euler Hermes’ online expertise

Euler Hermes key dates                                                                                           p. 14

Euler Hermes fact sheet                                                                                          p. 15

Key People at Euler Hermes                                                                                       p. 16

Definitions to help understand a credit insurance contract                                                       p. 19

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   1
Credit insurance, for secure business development

All companies depend on the financial health of their customers, whatever their size or
turnover. With growing internationalisation and the accompanying increase in business
transactions in unfamiliar and difficult economic contexts, companies are exposed to
risks that they may not be in a position to take. Credit insurance represents the core
business of Euler Hermes and supports companies in their business development.

Customers, a source of profit and of financial risk

Profitable business transactions are every company’s goal. Yet, commercial practice is not
exempt from risk, as a company is directly impacted by its buyer’s solvency. Though large
corporations and international groups have long been aware of this reality and devised ways of
protecting themselves, smaller companies, and those operating on their domestic market, tend
to be less aware of the risks they are facing and have less experience in dealing with it.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   2
Globalisation exposes companies to risks

In recent years, the context of commercial transactions has been altered by the increase in
volume and, at the same time, the internationalisation and modernisation of world trade. With
new business opportunities emerging, especially SMEs, companies are also increasingly
exposed to risk. Given that SMEs are more vulnerable to the problems of unpaid debts,
protecting trade receivables from payment default and monitoring the reliability of prospects and
customers in both domestic and export markets has become an essential factor for survival.

Trade receivables: underestimated risks
                                                                                            Trade receivables in
Though they represent an average 40% of a company’s                                               figures
assets, trade receivables are often not protected. Lack of
protection can have major repercussions on a company’s                                 5% of SMEs with turnover
                                                                                       below €4M are credit insured
business as this balance sheet item is associated with
real risks, which can be caused by a host of events. To                                15% of companies with
                                                                                       turnover above €4M are credit
some extent, they can be forecast (economic recession,
political events, a crisis within a company or sector…).
There are two main types of risk associated with trade                                 40%    is the average weight of
                                                                                       trade receivable of a company’s
receivables:                                                                           assets

      1. Commercial risk / insolvencies
      In industrialised countries, the number of company bankruptcies nearly reached ca. 230,000 1
      in 2007. Euler Hermes predicts a 5% increase in business failures in 2008, primarily driven by
      an economic slowdown in the U.S. and the Euro zone.                               World GDP growth is likely to
      decrease from 3.8% in 2007 to 3% in 2008.

      2. Country risk
      Country risk most often occurs in countries with an unstable political regime that generates
      uncertain economic situations liable to paralyse commercial transactions.

    Source : Euler Hermes Insolvency Outlook Nov 07, based on 33 industrialised countries

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   3
Credit insurance, an effective weapon against outstanding debt

Credit insurance provides cover against outstanding debt. However, credit insurance companies
offer more than just a simple insurance product: acting as partners throughout the course of their
clients’ commercial development, they provide the means to avoid or cover the risks incurred in
their commercial activity. Taking out credit insurance is first and foremost about acquiring
resources to anticipate and prevent risks. The credit insurer has very detailed knowledge of the
economic situation and can respond quickly to clients’ specific questions, providing relevant real-
time analyses to define and grant companies’ credit limits.

Credit insurance: how does it work?

In concrete terms, the insurer makes a very detailed evaluation of the client company’s customer
and thus measures the degree of risk for a given commercial contract. The insurer then
guarantees a transaction amount for which the client will be covered in the event of a claim. If
the agreed payment deadlines are not respected, the credit insurer takes responsibility for all the
collection actions in or out of court that are necessary for the recovery of the amounts invoiced.
If the recovery procedure fails, the insurer indemnifies the insured company by making up the
shortfall with the proportion defined in the insurance policy. From the outset of the contract, the
credit insurer also plays an important role in support for the insured company, helping it steer its
marketing policy towards reliable customers.

The positive impact of credit insurance

Key findings of the 2006 Euler Hermes Credit Management Study with the University of Leeds:

•    1.38% of a company’s annual turnover could be saved by the existence of a credit
     insurance policy
•    Credit insured firms receive more favourable credit periods from financial institutions, on
     average up to seven days longer.
•    Raising finance through loans is also more likely to be cheaper for credit insured firms with
     an average interest rate of 3.5% for insured firms versus 3.95% for non-insured companies
•    49% of credit insured companies manage to obtain a bank loan compared to 34% of non
     insured businesses
•    The average interest rate obtained by insured firms is almost 0.5% lower than for non
•    Credit insured firms are more customer focused than non insured
•    Trade debtors represent up to 35% of companies’ total assets.
•    One third of all businesses see late payment as an ongoing concern
•    69% of the companies claim that they would withhold supplies from a slow paying account

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   4
     Solutions for the management of trade receivables

                         Features                               Advantages                          Disadvantages
Business                 • Financial information                • Cheap (case by case)              • Lack of guarantee on the
                           offered for sale                     • Flexible and different              information
information              • Possible services:                     levels of information             • Inequality between
                         - Quotation                            • Speed of response                   providers regarding:
                         - Advice on outstandings               • Selection of individual           - speed of response,
                         - Recommended information                customers                         - accuracy of information
                                                                                                    - quality of analysis

Collection               • Collection of unpaid debts           • Service provided case by          • Success depends on the
                         • Linked to commercial                   case                                age of the debt
                           information                          • Possibility of adapting           • Requires rigour and
                         • Invoice management                     methods of collection               positive action in the
                                                                  according to customers              management of trade
                                                                • Possibility of only                 receivables
                                                                  entrusting a portion of           • Inequality of services
                                                                  debts                               between providers: speed,
                                                                                                      extent of the collection
                                                                                                      network and very variable
                                                                                                      success rates
                                                                                                    • High cost

Factoring                Delegation of the entire               • Eliminates burden of              • Very high cost
                         management of trade                      managing trade                    • Lack of certainty on the
                         receivables with 3 services:             receivables                         amount of guarantee
                         • Invoice management                   • Cash flow financing                 attributed to customer
                         • Debts financing                      • A guarantee for banks             • Loss of some contact with
                         • Compensation in the event                                                  customers
                           of non-payment

Credit insurance Coverage of risk of customer                   • Selection of customers by         • Coverage of the entire
                         insolvency with 3 services:              prevention                          customer portfolio
                         • Prevention                           • Collection of unpaid debts        • Fear of credit insurer
                         • Collection                             (whether guaranteed or              intruding in commercial
                         • Indemnification                        not)                                relations
                                                                • Indemnification for
                                                                  uncollected guaranteed

     Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   5
Credit insurance, Euler Hermes’ core business

Historically, the Euler Hermes Group is the expert in risk prevention for major corporations and
multinationals. In recent years, it has begun to provide a simple set of risk management services
appropriate for SMEs seeking a partner to provide security for their commercial development.
The Group also offers a range of services allied to credit insurance:

•   Financing of trade receivables. To facilitate Euler Hermes clients' applications for bank
    credit, an additional service has been developed in the group's online tool Eolis where clients
    can communicate the percentage of business covered by credit insurance to their bank. The
    Group also manages financial arrangements in partnership with its clients' banks via
    securitisation operations.

• Trade debts collection services for non-insured customers. This is an integral service in all
    Euler Hermes credit insurance contracts and it is also offered by all the Group’s entities to
    non-insured companies. In January 2007, Euler Hermes acquired the collections expert
    United Mercantile Agencies (UMA) in the U.S. Thanks to the synergies from this acquisition,
    Euler Hermes will continue to diversify its services and further strengthen its position in the
    collections business.

• A bond enables a company’s buyer to be offered the guarantees they need to conclude a
    contract. It is a useful alternative to a bank bond in that guarantees obtained through a bond
    do not reduce the company’s lines of credit with the bank. A Euler Hermes bond enables the
    company to free up cash so it can continue to develop business.

• Other services: Euler Hermes in Germany manages the export contracts for the Federal
    German Government. It also offers insurance enabling companies to deal with any fraudulent
    actions that may be perpetrated by their employees. This insurance covers the financial
    losses linked to embezzlement and enables companies to distance themselves from legal
    proceedings that could be detrimental to their image.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   6
Euler Hermes, an insurance provider and a partner

With over a century of experience, operations in 50 countries and an integrated business
model throughout the companies of its group, Euler Hermes is the world leader in credit
insurance and the preferred partner of nearly 56,000 businesses.

The worldwide leader in credit insurance

                                                       Euler Hermes has earned this position through its
                                                       professionalism and performance as well as through a
    Euler Hermes key figures
                                                       strategy of acquiring national leaders throughout the
                                                       world. The leading credit insurer in the world with 36%
 36% world market share
                                                       of the market (source: ICISA), Euler Hermes is a
 Presence in 51 countries                              subsidiary of AGF, and a member of Allianz.
                                                       Euler Hermes is a partner for over 56,000 insured
 56,000 clients worldwide
                                                       companies and organisations throughout the world, as
 2. 1 billion euros consolidated                       well as the German Federal Government and the
 turnover in 2007                                      Portuguese Government. It guarantees over €800

 800 billion euros of business                         billion of commercial transactions and responds to
 transactions protected                                over 22,000 guarantee requests every day. In 2007,
                                                       Euler Hermes’ turnover reached €2.1 billion.

Well positioned in major international markets

Credit insurance professionals have special expertise in anticipating and providing for business
risks. Thanks to over a hundred years of history, company acquisitions, and its integrated
business model, Euler Hermes now has unrivalled knowledge of companies and of the economic
constraints and commercial practices in the major world trade markets.
Euler Hermes bases its organisation and strategy on the concept of local accessibility. With an
effective presence on five continents through local subsidiaries and partnerships, the Group is
firmly embedded in the reality of local economies. This international network offers regular
contact for its clients and is best positioned to observe companies and economic environments
and evolution.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   7
A business model integrating micro and macro economics…

The model has been implemented in all of the group’s companies to ensure unrivalled
intelligence and efficiency.

1. Micro-economic analysis
Each Euler Hermes entity has an operations department for micro-economic analysis. It
comprises two mutually complementary but functionally distinct divisions:

   • The information department collects and analyses administrative, economic and financial
       data. The role of this department is to research, analyse and constantly monitor
       information to determine the short-term solvency of companies. Once this information has
       been collected, analysts compile balance sheets and economic activity forecasts at a
       regional level, and this is then amalgamated to create an overview of economic activity
       across the country.
   • The risk underwriting department issues cover. At Group level, over 400 risk
       underwriters work closely and continuously with our clients and stay tuned to their needs.
       They work from data provided by the information department, complemented with special
       expertise in their sector. Their in-depth knowledge of their sector coupled with the quality
       of the information department’s regional analysis enables them to make precise and
       relevant risk underwriting decisions almost instantly.

2. Macro-economic analysis
For macro-economic analysis, Euler Hermes relies on local research departments. Economic
risk analyses presented by different countries come in the form of ratings awarded by three
specialist teams in London, Hamburg and Owing Mills (Maryland, United States).

In 2006, Euler Hermes together with the Credit Management Research Centre based at the
University of Leeds Business School (United Kingdom) carried out a European survey of trade
credit management practice in ten European economies (Belgium, France, Germany,
Hungary, Italy, Netherlands, Poland, Portugal, Spain, United Kingdom).

The survey examined the importance of trade credit, variations in credit policies, credit
management practices and the impact of credit insurance on corporate performance. The
research focused on the key differences between credit insured and non credit insured
companies in Europe. This analysis looked at the impact of credit insurance on three key drivers:
supplier relationship, banking relationship and customer relationship.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   8
    A number of other studies are conducted through the Group’s different subsidiaries:
    The Euler Hermes SFAC research department in Paris is composed of 20 economists and
    support staff. It incorporates units for economic, sector and statistical analyses published in the
    “Bulletins économiques”, providing short and long-term perspectives of the markets. It also
    publishes international analyses on company bankruptcies and sector forecasts.

    Italy: La Rivista provides detailed quarterly surveys of the Italian economy, overviews of a more
    general nature, and sector analyses.

    UK: The team in the UK produces country risk analysis reports, highlighting geopolitical as well
    as economic aspects, thereby helping our clients make decisions on whether to engage in
    various countries and regions.

    Germany: Surveys pertaining to specific credit insurance business aspects are conducted to
    provide input for our experts and help our clients. For example, Euler Hermes
    Kreditversicherung regularly conducts a survey on the impact of white collar crime. They also
    study the payment morality of companies, a survey that was also adapted in the Netherlands.
    Detailed surveys on German insolvencies are also conducted every year.

Some Group publications

                                    International                    Country Risk                      Sector Analysis
     La Rivista
   (Italy - Quarterly)              insolvencies                       Bulletin                       (France - twice a year)
                                (France - twice a year)                (UK – Weekly)

    Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   9
Offering companies unrivalled intelligence and efficiency

Thanks to its effective local presence and its sector analyses, Euler Hermes master the entire
decision making process. The cross-company skills structure applied at an international level
enables Euler Hermes to respond rapidly, anywhere in the world, to its clients’ requests and also
to anticipate them. Decision-making by internal managers who are best placed for gauging the
risk is inherent in the Group’s Business Model. This is the essence of Euler Hermes’ structure of
being “geographically closest to the risk”, in other words, best placed to evaluate the reality on
the ground, analyse the risk and take all decisions related to the risk. This strategy of local
contact also applies to the settlement of disputes since it is the teams of specialists and
representatives from the local Euler Hermes entity that will also be responsible for recovery of
the debt if necessary.

Converging micro and macro economics

                                          Euler Hermes’ Subsidiaries

                                      Research Department
                                      - Economic Surveys &
                                      International economic forecasts
                                      - Sector Surveys :
                                      Analyses of major groups and sectors

                           Credit Analysts                           Risk Underwriters
                                                                  (organised by economic sectors)
                    Collects data and monitors the                                                                   Micro-
                    financial situation of companies           Qualitative and quantitative analyses
                                                               of economic sectors                                   economy


Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   10
Business intelligence and information sharing

Euler Hermes’ tools and organisation have been defined to optimise risk assessment and
management throughout the group. This strategy allows Euler Hermes to conduct real-
time relevant risk analyses and to strengthen its experts’ decision-making scope for an
improved quality of service to clients.

Proprietary information

Euler Hermes offers its clients an exclusive database with high added value analysing the
performance of over 40 million companies worldwide on a continuous basis. Unlike its
competitors, the Group has chosen to allow its insured clients only to benefit from its
information base through their credit insurance contract. Exclusive ownership guarantees an
optimal level of quality and updating.

The “Grade”: Euler Hermes’ system for evaluating companies

The “Grade” is a synthesis of the information collected, applied to all the companies that the
Group follows. It can be consulted from Euler Hermes’ exclusive database, and shared by the
subsidiaries. The Grade is constantly updated and takes into account each company’s financial
data, strategy quality of management, growth prospects and using a model that is valid for all
A systematic process is implemented by local experts who conduct investigations and analysis
in order to rate the companies according to their solvency level.
The “Grade” reflects the financial situation of each of these 40 million companies. It is one of the
references used by Euler Hermes risk underwriters to evaluate, assess and monitor buyer risks.

An integrated and shared risk management system – Information, Risk Policy

Euler Hermes has created a totally integrated risk management system shared by the various
structures within the group. This system allies the information contained in the Grade with risk
underwriting and decision-making programs that allow experts to rapidly determine and analyse
the nature and level of risks incurred by clients. In increasing the capacity and speed of its
experts through these programs to analyse the risk and offer personalised solutions, Euler
Hermes constantly upgrades the quality of its expertise and its potential in the task of risk

Euler Hermes’ online expertise

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   11
Information technologies are key to manage credit insurance contracts. Eolis is Euler Hermes’
online service for clients and brokers. Accessible on the Internet, Eolis enables clients to
manage their trade receivables efficiently, and monitor their buyers’ financial situation. Via Eolis,
businesses can apply for cover, receiving quick answers.

Eolis is constantly evolving as new functionalities are added to answer changing clients’ needs.
In the UK for instance, Eolis has been enhanced by two services: “Traffic Light Report”, a colour-
coded risk profile, and “Reasons for Decisions”, explaining the reasons for a limit or refusal for
cover. In France, Eolis services include new services such as “Eolis Premium”, developed to
check automatically a client portfolio so as to make sure it has the right cover.

Available 24/24 and 7/7 in fifteen different languages, Eolis registered circa 8,300 requests in
2007. Already used by clients in eleven countries – France, the United Kingdom, Switzerland,
Spain, Italy, the Netherlands, the three Scandinavian countries, Hong Kong and Singapore -, the
platform should be developed throughout the world by the end of 2009.

In 2007 Euler Hermes went a step further with the implementation for our major clients of
Smartlink, a new service aimed at easing access to information as well as policy management.
Smartlink creates a direct connexion between Euler Hermes’ information systems and those of
our clients, releasing them from an external interface when they request for cover. Launched in
Germany, this service will shortly be available within the group.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   12
Euler Hermes key dates
   •     Credit insurance is created in the United States with the founding of ACI
   •     Hermes Kreditversicherung is founded in Germany
   •     SFAC is created in France (Société française d’assurance crédit)
   •     SFAC diversifies into factoring with the creation of SFF (Société Française de Factoring)
   •     First cooperation agreement between SFAC and Hermes
   •     SFAC takes control of the Belgian credit insurer Cobac (Compagnie Belge d’Assurance-
   •     AGF becomes majority shareholder in the holding company SFAC which adopts the
         name of Euler
    •    Euler acquires the credit insurance companies Trade Indemnity (UK) and ACI (USA)
    •    The German insurance Group Allianz becomes the majority shareholder in Hermes
   •     Allianz becomes the majority shareholder of AGF
   •     Euler takes control of the Italian credit insurance company Siac (Società Italiana
         Assicurazione Crediti)
    •    Hermes creates a subsidiary in Scandinavia
   •     Eurofactor created following the merger of SFF and Slifac (Crédit Lyonnais)
   •     International cooperation agreement with Hermes
   •     Euler listed on the Premier marché of the Paris stock exchange
   •     Acquisition of Hermes by Euler. The new Group is the world leader in credit insurance
   •     The Group and all its subsidiaries adopt the name of Euler Hermes
   •     Business developed in Russia, China, Finland, Korea and Southern Europe (Greece,
         Portugal, Morocco)
    •    Interest in Eurofactor sold to Crédit Agricole
   • Euler Hermes takes full control of the Benelux subsidiaries and opens branches in Baltic
     States, Turkey, Russia and India
   • International acquisitions in Ireland, Australia and New Zealand. Opening of an office in
      Dubai, UAE
   •     Acquisition of the American collections specialist UMA. International development in
         Israel with the acquisition of one third of the capital of ICIC, Israel’s leading credit insurer.
         Euler Hermes opens a subsidiary in Buenos Aires, Argentina

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   13
Euler Hermes facts and figures

 •    Worldwide leader in credit insurance with a 36% market share
 •    Euler Hermes is a subsidiary of AGF and a member of Allianz
 •    Presence in 51 countries
 •    € 2.1 billion euros consolidated turnover (2007)
 •    € 407 million euros net income (2006)
 •    Rated AA- by Standard & Poor’s (July 2006)
 •    € 800 billion of commercial transactions protected
 •    22,000 applications for cover processed every day
 •    80% of credit insurance requests are processed within 48 hours
 •    40 million companies monitored and catalogued in its database
 •    6,000 staff worldwide
 •    Listed on Euronext Paris (ticker symbol: ELE).

Euler Hermes global presence

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   14
People at Euler Hermes
The Management Board, or Directoire, of the Euler Hermes Group is chaired by Clemens von
Weichs and includes five members:

Clemens von Weichs, Chairman of the Management Board
Clemens von Weichs was appointed chairman of the Euler Hermes Group
in July 2004. He coordinates all the group activities and is in charge at
group level of the IT function, internal audit, Communication and the
careers of the top executives. He also supervises the activities of the group
in the United States, the United Kingdom, Belgium, Italy and the
Clemens von Weichs, born in Germany in 1952, graduated in law from the
University of Bonn. He began his career in 1980 with Gerling Group where he held several
management positions in the reinsurance division. In 1994, he was appointed Director of
Reinsurance for Allianz SE. In 1999, he also took over the responsibility for the travel insurance
department, participating in the merger with the Swiss group Elvia to form the group Mondial
Assistance. Clemens von Weichs was appointed to the Management Board of Hermes
Kreditversicherung         in    July    2001      then     Chief      Executive       Officer     of   Euler     Hermes
Kreditversicherung from July 2002 to July 2004.

                            Gerd-Uwe Baden, Member of the Management Board
                            Gerd-Uwe Baden was appointed Chairman of the Management Board of
                            Euler Hermes Kreditversicherung (Germany) on 25 May 2004. At group
                            level, he also supervises the Risk function.
                            Gerd-Uwe Baden, born in Germany in 1955, graduate in law and
                            management from Hamburg University, began his career in 1985 as
management consultant with McKinsey & Company specialising in the insurance sector. In 1991
he was appointed to the Management Committee of Deutsche Versicherung, a subsidiary of
Allianz group, responsible for the Organisation and Administration department before becoming
head of Private Clients. Gerd-Uwe Baden was Chief Executive Officer of Allianz Suisse from
January 1998 to May 2004.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   15
Nicolas Hein, Member of the Management Board
Nicolas Hein was appointed Group Chief Financial Officer and member of
the Management Board of Euler Hermes in March 2004.
Born in Luxemburg in 1959, he graduated in Economics at the “Université
Libre in Brussels”'. He started his career in 1982 with Price Waterhouse
Benelux before joining the Olivetti group for seven years. In 1993 he
joined Medeol (Eridania Beghin-Say group) as Financial Controller in
Brussels before becoming Chief Financial Officer in 1995 (Paris), a position he also held with
Cerestar for the period 1999 to 2001. From 2001, he was Chief Financial Officer of the Quick
Group in Brussels heading the finance and administration functions (Belgium and France).

                            Michael Hörr, Member of the Management Board
                            Michael Hörr joins the Euler Hermes group as Chief Operating Officer in
                            September 2007. He was appointed member of the Management Board
                            in January 2008, in charge of operations and IT.
                            Michael Herr, 43, German, who has a Master of Business Administration
                            of the “Institut d’Administration des Entreprises” in Montpellier, France,
joined the Allianz group in 1989 holding responsibilities in Germany and France. In 1998, when
Allianz and AGF began their cooperation, Michael Hörr joined AGF as IT director for AGF
insurance in charge of non life systems integration. He was appointed Director of AGF’s global
brokerage business and space insurance in 2002. In 2006, Michael Hörr became in charge of
health and employee benefits at AGF.

                             Michel Mollard, Member of the Management Board
                             Michel Mollard was appointed Chairman of the Management Board of
                             Euler Hermes Sfac (France) in July 2006 and supervises the business
                             development of the Euler Hermes Group.
                             Born in France in 1964, Michel Mollard, graduate of the Ecole
                             Polytechnique, the Ecole Nationale Supérieure de Techniques Avancées,
                             he also has a PhD in economics. He started his career at the French
                             Ministry of Defence from 1988 to 1992. He then worked for the French
Ministry of Economy and Finance where he became in 1995 Head of the department « Loans to
North Africa, Middle Orient and Asia ». In 1998, he became Deputy General Manager of Sofaris,
before joining in September 2001 Euler Hermes as Group Chief Strategy Officer and member of
the board.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   16
Glossary for credit insurance contracts

    •    Terms of payment: This refers to the payment period set by the insured to its client at
         the time of invoicing. The period, generally 90 days, must be clearly stated on the
         invoice. The maximum initial terms of payment are shown in the contract’s special

    •    Exposure: This is the amount owed, on a given date, by a customer to his supplier. The
         exposure is therefore the risk that the insured carries on his customer at a given moment
         in time.

    •    Limits: These are credit limits granted to the insured on his outstanding trade
         receivables. They are backdated from the date when the contract took effect as long as
         invoices are issued after this specific date. Backdating gives flexibility that enables a new
         insured to spread requests for cover when setting up the contract, as the insured has to
         make specific requests for all customers whose exposure is higher than the discretionary
         limit (for unspecified buyers) over a relatively short period.

    •    Unspecified buyers: Cover may be automatically granted without an advance limit
         decision for customers with low credit exposure. The limit of this exposure is specified in
         the terms of the contract, and is around 5,000 to 8,000 euros depending on the activities
         and specific details of the insured.

         To be entitled to unspecified buyer cover, the insured client must first have carried out
         two checks: the customer is not in a late payment position with regard to the insured and
         is not on the confidential list (CL).

    •    Named buyer: This is a designated buyer for whom the insured client has obtained a
         higher cover limit than would be available for an “unspecified buyer” on his contract. The
         limit is then monitored by the Risk Underwriting Department throughout its lifetime.

    •    The Confidential List: The Confidential List (CL) is a list of companies for which cover
         requires special underwriting approval. If the insured’s customer appears on this list, the
         insured must contact us for specific cover. To ensure free, automatic, monthly updating
         of entries and removals from the CL, the insured must create his own “directory” in which
         he enters each of his customers who appear on the CL.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   17
    •    Overdues: Overdue payments must be declared within a certain period of time from the
         invoice deadline. This period varies from 15 to 30 days depending on the contract and
         corresponds to the time for the insured to be informed of the incident. An overdue
         payment triggers a state of default, after which new deliveries are no longer guaranteed.
         There is therefore a period between the moment when the bill is unpaid and the moment
         when the state of default commences. If an extension is granted, this period is extended
         accordingly (45 to 60 days maximum depending on the contract).

    •    Extensions: The insured can grant his customer one or more extension periods up to 45
         to 60 days depending on the contract. An extension overrides an overdue payment (or
         delays the state of default).

    •    Minimum premium: This is the minimum total premium which will be invoiced to the
         insured whatever the turnover realised during the year. If the amount has not been
         reached by the end of the year, the insured has to pay an additional sum to make up the
         minimum premium.

    •    Security deposit: Amount that is paid by the insured on signing the contract. It is a
         condition for the start of the contract and corresponds to the premium payable before the
         first invoice is covered.

Euler Hermes - Helping companies to safeguard and grow their business all over the world – 01/2008 –   18

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Tags: Hermes
Description: Hermes, the French fashion brand, early in order to create a well-known senior horses in Paris, France, and after the introduction of the bags, clothing, scarves, perfume, enamel, jewelry and household goods, make the brand more comprehensive diversity. hermes is also the ancient Greeks called Mercury.