Getting to know you
A focus on Construction
We’d like to take you behind the scenes to introduce and profile our specialist team plus get their expert advice on industry trends and other factors that may impact the way you do business.
For this edition we spoke to Senior Underwriter Carl Earls to get his thoughts on the outlook for the Construction industry.
What's your current role at Atradius?
I'm a Senior Underwriter and with my team we are responsible for a number of industries including Construction, Construction Materials, Electronics and Finance. Essentially I assess the risk of buyers within these industries that our customers are trading with by reviewing a number of elements, including their financial statements. After assessing all available information, I will make a decision on whether we can take on the risk or not.
What education or training has contributed to your success in this role?
I completed a degree in History and Politics at the University of Swansea in United Kingdom. While there isn’t an obvious link to working in insurance, much of my role involves reviewing numerous pieces of company information, identifying the positives and negatives and formulating a balanced assessment. These research and analysis skills were developed during my study.
What previous employment positions have prepared you for this role?
My first job after leaving university was with Atradius at our UK head office in Cardiff. Ten years on I’m still with the company having moved to the Sydney office as a Special Risk Underwriter more than two years ago.
What advice do you offer businesses looking for credit insurance?
Although the economic environment is improving, the threat of company insolvency remains real. In improving conditions, a number of companies look to build trade back up again and there is the danger of over extension and inadequate financing.
Also, never underestimate the importance of a strong relationship with your credit insurer. You can only get part of the story from reviewing a buyer’s financial position and industry data. At Atradius we like to visit our buyers and our customers in order to get a better understanding of the respective businesses. The closer we work with our customers, the better we can properly assess and advise on their credit risks.
What are the main changes you’ve seen in the Construction industry in the past 18 months?
The Construction industry was particularly hard hit by the global financial crisis and a number of claims were paid by Atradius due to company failures in this sector. Since late 2009 and early this year there have been clear signs of improvement with a number of projects recommencing that had previously been put on hold. We have also seen a number of buyers demonstrating an improvement in their financial performance.
What current trends are impacting the industry?
The stand out trend is that the Australian government has spent and continues to spend a significant amount of money as part of the stimulus package on Education, Social Housing and Health/Hospital infrastructure construction to invigorate the economy. A number of construction companies and materials suppliers have benefitted from this and the spending has underpinned the improved condition of the Construction industry.
We will be looking closely at the policies by the government to spend or cut funding as this will have a significant impact on the local industry.
What’s the outlook for the Construction industry?
The consensus among analysts is that the Construction industry as a whole will improve in the second half of 2010 through 2011. This opinion is fluid; however recent disappointing housing approval data has put a dampener on clear cut recovery.
We are cautiously optimistic regarding the outlook for the sector, but will continue to underwrite buyers within the industry carefully especially as we still receive a high proportion of our claims from within it. It must be stressed however, that no matter whether the economic/sector conditions are good or bad, there is always the risk of business failure with poor management being one of the primary reasons.
Since the global downturn our customers and especially buyers have realised the importance of being open and transparent with the information they provide to Atradius so we can make accurate risk decisions and facilitate trade.