Gerasimos Jay (Atradius): Bankruptcy increases in 2022

Delays in payments and overdue debts have already begun to increase, according to the CEO of the leading credit insurance company and leader in the Greek market, Atradius, Mr. Gerasimos Tzei, who presents the growth strategy. Regarding the role of the CEO, he estimates that he must operate exclusively “in compliance” with the protocols of his company and act faithfully following the best practices of this and the market.

– What were the main changes in trading behavior during the pandemic and then during the restart?

One of the main conclusions that emerged from the research of Atradius analysts on the transaction behavior of Greek companies in 2021, is that Greek companies showed an increase in the total percentage of sales by credit. For 2021, 56% of B2B sales were made on credit, compared to 50% in 2020, with businesses providing credit to grow sales with existing customers.

39% of the total value of invoices is currently overdue, a decrease of 48% compared to last year. The percentage of unpaid invoices (without payment after 90 days), remained stable (compared to 2020) at 7%. Only 1% of them were collected while the rest were written off.

– If we distinguish two characteristics, the delay and the default, what is their change in relation to the period before the pandemic?

For 2020, global bankruptcies decreased by 12% on an annual basis while for 2021 they are projected to decrease by 6%. Bankruptcy / insolvency of companies is expected to increase by 15% on an annual basis in 2022.

This increase is expected after two consecutive years where bad debts fell, as a wide range of measures by most governments, including debt suspensions, employee safeguards and fiscal measures, helped prevent a liquidity crisis from turning into a recession. in a wider solvency crisis for European companies.

For the Greek market, the bankruptcy rate decreased by 14% last year, however it is expected to increase strongly in 2022.

On the contrary, after the start of the pandemic, the delayed tariffs increased. The percentage in arrears is of the order of 48% of the total value of B2B sales (from 28% in 2019), a fact that represents an increase of the order of 71%. For 2021, 39% of the total value of invoices remains overdue.

– Has the demand for insurance or credit guarantees increased? In which sectors and countries are the biggest changes observed?

Deteriorating trading behavior in northwestern Europe has boosted demand for Credit Insurance, with more than half of companies planning to use the tool in 2022.

There are serious indications that 2022 may be another difficult year. Globally, we expect an increase in bankruptcies. Especially in Western Europe, estimates show an increase in bad debts in Italy and the United Kingdom by 34% and 33% respectively. Businesses should take these indications into account and take steps to protect their claims. Credit Insurance is the most reliable.

Regarding the Greek market, indicatively in 2020 the production of insurance premiums in Credit Insurance amounted to approximately 40 million euros and had an increase of 7.4% compared to 2019, while an increase is projected for 2021.

– What emotions does the CEO position itself cause and how do you manage them?

Leading an organization like Atradius, and especially in the difficult times we are experiencing, primarily creates a sense of honor and pride for me:

I had the good fortune to start the company when it started in Greece in 1998, and I took over the General Management in 2004. So I experienced “first hand” all the good and difficult moments of the Greek economy since then, such as the global crisis in 2009, the infamous GREXIT season in 2015 and the Covid-19 pandemic in 2020.

Atradius not only withstood and responded to the unprecedented and continuous crises but thanks to its strategy and its excellent executives it literally took the threatening opportunity, won the impressions and the preference of the business community and established itself as the marketleader in the Greek Credit Insurance market for the last 7 consecutive years!

This extraordinary development causes me feelings of satisfaction but also responsibility for the future:

I have the good fortune to work with amazing colleagues who have faith in the company and an appetite for work and I have to devise the best strategy for everyone and share it with them. I draw inspiration from them and I will do it.

– How important do you consider the CEO’s reputation in terms of value and future of his / her company?

The CEO of the company is literally the ambassador of the market and of all its employees.

Therefore, his professional reputation, and not only, is the biggest asset he can have since it is identified with that of the organization he leads.

He must therefore operate exclusively “in compliance” with the protocols of his company and act faithfully following the bestpractices of this and the market.

It may sound absolute but any flaw in the ethos and reputation of the CEO mortgages the future of the company and in such a case the CEO should be removed from the organization.

– How is a CEO trained, informed and exchanged views and good practices today?

The function of the CEO presupposes the constant information about the market events and varied training.

In particular, in a company such as Atradius, which is the marketleader of Credit Insurance in the Greek market and which is based on the timely assessment of micro and macro economic developments around the world, informing the CEO becomes a daily practice.

The constant contact with our hundreds of Insured, with the insurance intermediaries, with the representatives of the professional communities of the country but also with the financial analysts of our group are some of the communication channels that I use.

The personal exchange of views with notable and self-made entrepreneurs in Greece and the international economy, is for me not only a channel of information but also a factor of self-improvement.

– Which work model do you think will be most effective for the operation of an organization from now on, given the possibility of “returning to the office” after a long period of teleworking?

The Covid 19 pandemic was something no one had predicted, and the lockdowns imposed as a measure to deal with it was admittedly an unprecedented condition for everyone.

Teleworking was the best solution between business sustainability and staff safety. At the same time, the digital revolution and technology have led us to new paths that we can not ignore.

At Atradius, our business readiness and ensuring the health of our staff are crucial values.

The work model that we have successfully followed is 40% of our working time in teleworking, a model which I consider to be the most prevalent for the future.

– What has changed due to a pandemic in employee leadership relationships and how much has this change affected the achievement of the organization’s goals?

The teleworking model was the best solution for the economies of many countries through the lockdowns that were imposed to reduce the Covid pandemic.

It was therefore expected to affect the leadership-employee relationships that until now had been based solely on physical contact / collaboration in the office.

Managers were asked to manage their teams remotely and find new ways to control the business and target. The element of trust proved to be a barometer for the success of every organization that resorted to teleworking.

At Atradius the lockdown gave us positive surprises because most of our colleagues acted as new emerging leaders, took initiatives, believed in themselves and accomplished difficult tasks without being under the constant physical supervision of their managers.

– What is the role of the CEO in retaining and developing his / her executives and who in attracting new executives from the market?

Executives are inspired by their managers and not just by the company in which they work.

So the role of the CEO is crucial for the retention of his executives because he must be the leading figure who inspires them.

It must distinguish, prepare and promote emerging leaders by giving them new and more demanding roles, thus satisfying their professional ambition.

At the same time, its important role is to recognize new executives in the market, to stay in touch with them and at the right timing to add them to the organization, improving both the operation of the company and the cohesion of the team.

– A new executive who has the ambition to become CEO, what would you advise?

I would advise him to be patient to invest in himself, in his reputation, in his visibility inside and outside the organization, to learn in depth all the functions of the company, to emphasize his soft skills, to have faith and perseverance.