1.1. Letter by the Chairman

Fernando Salazar Palma
Chairman of Cesce
Although Spain’s economy continues to grow and more so than in neighbouring countries, in recent years we have seen a significant slowdown in terms of the world economy and international trade. We have seen how multilateralism has given way to increasingly popular protectionism, with traditional mercantilism even making a return. We have witnessed trade and tariff wars between the USA and China, and even between the United States and the European Union, where the uncertainty surrounding Brexit is still present. We are alarmed to be seeing the return of nationalist and populist politics, not only in Europe, but throughout the world.

These are just some examples of factors which are contributing to forming a new international context which we must be prepared for. A new context which will undoubtedly bring with it opportunities, particularly those created by the digital world we are increasingly living in and those produced by a more sustainable and inclusive economy. However, we should not forget that there are also significant risks which are becoming more acute. CESCE was created with the aim of providing cover for these risks or, at least, some of them. Our basic goal continues to be precisely that, i.e. to make the trade and financial activity of Spanish companies more secure by using the best risk management tools available and putting our customers, and in particular SMEs, at the very heart of our strategy. 

The cornerstones on which we base the services we offer companies are financial standing, professionalism and recognition of the CESCE brand. This has allowed our company to continue going strong after almost fifty years since it was founded. Our solvency ratio is currently 3.2 times the solvency capital requirement (SCR), one of the highest ratios in the Spanish insurance sector and by far the highest in the credit and surety insurance subsector. In addition to our experience and financial standing, at CESCE we are backed by the very best shareholders - the Spanish state with a 50.25% shareholding and the private finance and insurance sector with a 49.75% shareholding. We therefore provide Spanish companies with solid support for their business, particularly their work abroad, this taking on even more importance within the current context of uncertainty and rapid change. 

2018 has been a good financial year for CESCE. We achieved 34.3 million euros in net profit, 51% more than the previous year. This represents the fifth largest profit and the second largest dividend in our history. 2018 was the tenth consecutive year during which CESCE generated profit  

In terms of our own insurance products in Europe (in Spain, as well as our branch offices in Portugal and France), premiums earned in 2018 totalled 112.1 million euros, a 1.2% increase in comparison to the previous financial year. CESCE grew in terms of premiums for the first time since 2010, a result which is even more impressive given the strong competition in our sector. Our sales efforts generated an increase in our number of customers, which currently total more than 9,100 in Europe and 670 in Latin America. 

Our customers are the main driving force behind what we do at CESCE. and that is why we know how important it is to listen to them and be aware of their needs, as well as be flexible in adapting to them and offering them the very best solutions. This is something which is at the very heart of our unique products. In 2019 and 2020 we will be taking on new projects which complement and strengthen the value CESCE offers companies.

We are especially proud of the progress made by our Business Support Fund, which has allowed us to provide more than 650 million euros in financing to business customers since its creation in 2013, and almost 250 million euros last year alone, making it the second source of short-term non-bank financing in Spain.

In terms of our subsidiaries in Latin America, revenue in 2018 totalled 46.4 million euros and the aggregate number of premiums issued in this region grew by 15%. Moreover, 2018 was a real turning point as we began to win a significant share of the market. As such, in Latin America we achieved the second best result in our history, ending 2018 with 2.4 million euros in profit, this being in line with one of the main goals in our Strategic Plan 2020, namely to grow and be profitable.  

Over 2018, we have placed significant focus on developing and optimising our credit insurance distribution networks in Latin America, paying particular attention to SMEs. The result was been a 16% growth in our contract portfolio  and a 20% increase in premiums issued in this area. Regarding specific countries, Mexico particularly stands out due to the return of credit activity and a resulting 40% increase in premiums issued. The impressive results achieved in Peru are also noteworthy, where, despite still being an emerging market, the number of policies issued rose by 30%. The progress made in terms of sureties was also very positive, with a 14% increase in the number of earned premiums. Our subsidiary in Brazil issued more than twice as many as in the previous financial year, and Peru and Mexico also showed significant increases in this area. At the end of the 2018 financial year, the online tool developed by CESCE for sureties had been implemented in Colombia, Chile and Peru, meaning greater competitiveness and control in terms of our operations.

In terms of CESCE’s work on behalf of the State, the 2018 financial year proved to be outstanding. It was the first in history where, without there being an economic crisis in Spain, insurance issued on behalf of the State exceeded 3,500 million euros. Such impressive results were achieved within the context of the largest operation in CESCE’s history - syndicated credit cover for a refinery in Peru for a total of 1,360 million euros. However, we should not forget the fact that we have also provided cover for major projects in other sectors, in particular shipbuilding and transport infrastructure, for which we issued a total of 352 policies in 2018, the vast majority of these for Spanish SMEs, a group we place particular importance on 

The other companies which make up the CESCE Group deserve a special mention, in particular CTI and Informa D&B, which are partly responsible for the success of the overall results and with which we design the services we offer to our customers. 

CESCE is, above all, a company committed to society as a whole and its people. We continue to work hard to build an exemplary company in this regard. As such, over 2018 we renewed our Family Responsible Company (EFR) certificate, strengthened our Code of Ethics, and allocated 0.7% of our profit to corporate social responsibility (CSR) projects, which are participatory in nature and involve many opportunities for volunteering. We are also working on and strengthening our environmental policy, the majority of our team are women and we have increased their presence in senior management positions. 

To sum up, our aim is for CESCE to be synonymous with financial standing, credibility, responsibility, innovation and prestige, putting our customers, our true reason for being, our shareholders, our people and society at the very heart of everything we do.

1.2 A look at CESCE

CESCE heads a group of companies which offers comprehensive trade credit, information and technology management solutions in Europe and Latin America.

Shareholder structure


1.3. Milestones of the year

1.4.1. CESCE Group

1.4.2. Individual results for CESCE

Within a difficult economic context, dominated by strong competition in the insurance sector, the parent company of the group achieved a 28.9-million-euro profit, a 27.3% increase on 2017, thanks to the hard work of its sales teams and its technical expertise.