Foreword

FOREWORD

The Swiss Export Risk Insurance (SERV) can once again look back on an interesting business year. The past year was marked by uncertainty in export markets as well as current geopolitical developments with their protectionist consequences. SERV has observed the emergence of industrial policy measures in many markets and sees the risk of an international subsidy race developing, in which the respective export credit agencies (ECAs) will play a key role. In contrast, Switzerland continues to favour sound framework conditions for the export industry.

Impact of geopolitics

Geopolitical developments – the intensification of competition between China and the US, the Russia-Ukraine war, armed conflicts in the Middle East, the slowdown, or partial reversal, of globalisation and much more – have a direct impact on SERV’s business and that of its clients.

High inflation, volatile commodity and energy prices, trade disputes and sanctions, and the restructuring of global supply chains are clouding the economic outlook in many places. Increased import prices, subsidy payments and high capital market interest rates are also impacting on public finances and debt burdens in many emerging and frontier markets. In addition, there is political uncertainty caused by social unrest, terrorism and internal and inter-state conflicts. Overall, risks and uncertainties have increased worldwide, and Switzerland’s export-oriented companies are directly exposed to the impact of these geopolitical disruptions.

They are challenged not only by the availability and cost of raw materials and energy, the choice of production locations and the disruption of supply chains, but also by their strategic focus on specific sales markets and a generally increased payment risk. How did these developments affect SERV’s results in the year under review?

Developments in 2023

New business fell slightly to CHF 4.4 billion compared to the previous year (2022: CHF 4.7 billion), which was largely attributable to 131 fewer insurance policies (IP) being issued. The total number of newly issued insurance commitments in principle (ICP), 129, remained at the same level as the previous year. In the year under review, SERV recorded exceptionally high loss expenses of CHF 222 million, mainly due to payment defaults in Ethiopia and Ghana. This year was exemplary in that the positive net result of CHF 13.4 million was heavily influenced by special effects such as early contract terminations, interest income from debt rescheduling agreements and currency gains. At CHF 33.5 million, interest income from investments with the Swiss Federal Treasury reached the same level as in SERV’s founding years from 2007 to 2009, thus fully covering personnel and material costs.

How can SERV support Swiss exporters even more effectively in the challenging year ahead? For example, by opening up new markets, which are becoming increasingly important through nearshoring, or by establishing more robust supply chains. SERV helps companies to cover themselves against increased risks in export markets. For SERV, increased uncertainty means potentially increased demand for its insurance policies, but also potentially higher losses.

“And therefore, we can say at the end of 2023: a changing world brings new challenges while also opening up opportunities.”

Barbara Hayoz

Chairwoman of the Board of Directors

SERV continues to be an important instrument for promoting Swiss foreign trade. Its strategy and core values have proven their worth in times of political and economic uncertainty. Through its guarantee and insurance services, it plays a key role in enabling the domestic export industry to operate successfully in a challenging market environment.

For the new 2024–2027 strategy period, the Federal Council has instructed SERV to further develop its role as a trade facilitator and play an important part in enabling Swiss companies, and SMEs in particular, to gain access to major infrastructure projects abroad. Efforts in the area of sustainability are also gaining in importance. This is an area where SERV has already taken important steps by adopting its climate strategy. The Federal Council also attaches great importance to ensuring that SERV’s services continue to meet the needs of Swiss export-oriented companies and remain internationally competitive.

Opportunities in global infrastructure projects

The Pathfinding Strategy adopted by the Board of Directors (BoD) is based on the Federal Council’s strategic objectives and aims to give Swiss companies the opportunity to participate in major international infrastructure projects, expand their international presence and thus consolidate their long-term success. In view of the high global demand for infrastructure investments, particularly in connection with climate protection, opportunities are opening up for Swiss companies and SMEs in particular. In this context, SERV’s very close cooperation with its partners as part of the “Team Switzerland Infrastructure” should be highlighted. In addition to SERV, this currently includes the relevant organisations in Switzerland, in particular SECO, Switzerland Global Enterprise (S-GE), Swissmem, Swissrail and suisse.ing.

In the coming years, SERV will also be dealing with topics such as digitalisation, sustainability and the transformation to a climate-neutral economy. All these topics are overshadowed by the consequences of climate change, such as heatwaves and the loss of biodiversity. SERV is autonomous and self-financing.

Review of the SERV Act

The ability to adapt to crises and structural change is an important issue for SERV as well as for export-oriented companies. SERV’s legal basis has been in force for some time. With the exception of selective amendments following the financial crisis, the SERV Act (SERVG) has never been systematically reviewed. SERV therefore considers it important that a revision of the Act is considered, with a view to maintaining the competitiveness of the Swiss export industry.

The fundamental question is how SERV should handle the switch from traditional bipolar trade relations to a globally networked economy. This switch, which has been under way for some time, is resulting in the global integration of markets, companies, value creation and financing. As a result, the national allocation of economic activities is becoming blurred and the traditional export business is being infiltrated by new multinational elements.

“SERV is strategically and structurally well positioned to drive forward its transformation into a trade facilitator. It is aiming first and foremost to boost the Swiss export economy and give companies access to infrastructure projects.”

Peter Gisler

Chief Executive Officer

In this environment, the attractiveness of Switzerland as a business location must be maintained for companies that can count on the support of export credit insurers elsewhere.

On behalf of SERV and all our employees, we would like to thank our clients for their cooperation, trust and loyalty in these challenging times. We look forward to continuing to actively support you in your export business.

Barbara Hayoz

Chairwoman of the Board of Directors

Peter Gisler

Chief Executive Officer