“We play it safe and prefer to rely on human intelligence.”
In this interview, CFO Yvonne Pusch talks about digital transformation and risk management at SERV.
Ms Pusch, as a Swiss exporter, should you be familiar with SERV?
Absolutely, since many export transactions wouldn’t even be possible without SERV. We come into play for exports to more challenging and riskier markets – particularly developing and emerging countries – or when the export transaction has a long credit period. The amount of insurance cover varies greatly and can range from 10,000 to 200 million Swiss francs.
Does SERV also cover transactions in industrialised countries?
Yes, if the term is long enough. Under OECD guidelines, the maximum repayment term for climate-friendly projects is now 22 years. Private insurers are generally not interested in holding large risks on their books over such a long period.
How can SERV ensure that losses are covered when such large volumes are involved?
The risk capital is calculated using a mathematical model that determines the probability of default across all insurance contracts under a stress scenario. In this way, we ensure that sufficient capital is available to cover losses even in the worst case. The Federal Council sets out a framework of obligation that defines the maximum insurance volume for SERV (currently 14 billion Swiss francs). This means that the maximum risk exposure is also limited.
What is your recipe for success as CFO and Risk Manager?
In short: defining a clear goal, choosing a common and efficient path, having an acute awareness of risks and having a clear picture of the steps already taken.
What does that mean?
Our common goal is clearly the promotion of the Swiss export industry and the creation and preservation of jobs in Switzerland. We are pursuing this path with holistic enterprise risk management and in close collaboration with risk experts. This is accompanied by digital transformation in the areas of process optimisation, data analysis and market analysis. All of this requires a culture of learning from mistakes – only in this way can we move forward together and be successful.
Is digital transformation essential for SERV?
It definitely supports our cause and helps to increase efficiency. For the complex issue of credit insurance, however, we play it safe and still rely on human intelligence. When it comes to quality, we leave nothing to chance, especially since we’re dealing with an insurance volume running into the billions.
What lies at the heart of your risk management?
For an export credit agency, successful risk management is all about managing actuarial risks. The classifications of rating agencies and the OECD country classification are important elements of this. For transactions with foreign buyers who are not rated by an official body, we carry out our own evaluations and classifications.
So there’s a fair amount of customisation involved?
That’s right. We thoroughly assess the risks for each insurance policy. At SERV, you certainly won’t find any off-the-shelf insurance policies. We owe this to our policyholders – and we are very proud of that.
