SERV issued new insurance policies worth CHF 1.765 billion for Swiss exporters in the 2024 financial year. The proportion of SMEs among SERV customers rose to 82 per cent.

The new commitment was again lower than the previous year’s CHF 2.641 billion at CHF 1.765 billion. The Eastern Europe & Central Asia region accounted for the largest proportion, followed by the Middle East & North Africa as well as East Asia & Pacific. SERV’s largest new commitment was for an energy sector project in Vietnam. Other countries with new commitments exceeding CHF 100 million were Turkmenistan (energy sector), Saudi Arabia (rail sector), United Arab Emirates, Lithuania, Germany and Angola.

As usual, the commitment figures were heavily influenced by individual large projects. The ten biggest transactions accounted for almost 70 per cent of the new commitment. As in the previous year, SERV supported various infrastructure projects in the railway and energy sectors during the 2024 financial year. SERV frequently supports the financing of major projects through buyer credit insurance.

SERV focused its acquisition efforts on two topics in 2024: the continuation of the Pathfinding Strategy, and the implementation of the regional banking initiative, whereby SERV works consistently to raise awareness of its offering among regional banks.

The aim of the Pathfinding Strategy is to improve access to international large projects for Swiss SMEs – particularly in the infrastructure sector. Through actively cultivating buyers’ markets, we bring Swiss exporters and international general contractors together.

In collaboration with SECO, Switzerland Global Enterprise (S-GE), Swissmem, Swissrail and suisse.ing, SERV forms part of “Team Switzerland Infrastructure”, which markets Swiss industry’s expertise for international infrastructure projects in buyers’ markets and the attractive financing opportunities enabled by SERV cover.

SERV took part in the following community activities of “Team Switzerland Infrastructure”: various trade delegations of the Federal Department of Economic Affairs, Education and Research (EAER) and Swiss State Secretariat for Economic Affairs (SECO) to Saudi Arabia, China and the US, a fact-finding mission in India and an infrastructure forum in Brazil.

The implementation of the “regional banking initiative” was advanced further in 2024. It is well known that banks are important multipliers in the export financing ecosystem and are able to put exporters in touch with SERV. SERV succeeded in raising awareness of its products and solutions among SMEs through targeted training for corporate client advisors at Swiss banks.

SERV approved 578 new applications in 2024, of which 433 were insurance policies (IP) and 145 Insurance commitments in principle (ICP). The number of 578 applications is at the level of the previous year, but remains, but remains below figures achieved before then.

The reduction is to be seen in the context of the persistently strained conditions in the Swiss technology industry (machine, electrical and metal industry as well as associated technology sectors). In the first nine months of 2024, Swissmem reported lower revenue, accompanied by a fall in exports and incoming orders.

The volume of newly issued ICPs fell significantly. The trend towards increased demand for buyer credit insurance with long credit periods, which was evident in preceding years, did not continue as only 39 new policies were issued. The most popular products are traditionally supplier credit insurance and counter guarantees. 80 per cent of the new exposure was for credit transactions with terms of more than two years.

As in previous years, SERV’s highest exposure by country was to Türkiye, at CHF 1.292 billion. Moreover, Angola moved up to second place in the country list by exposure. Exposure in Russia fell further through risk reductions in existing transactions. Since the introduction of the sanctions adopted in 2022, SERV has not been allowed to insure any new projects in the country. The remaining commitment amounts to CHF 357.0 million, a reduction of CHF 31.7 million compared to the previous year.

SERV recorded 16 new losses in the year under review, for which it made indemnity payments totalling CHF 47.0 million. Most of these losses were small. There was also a medium-sized loss in Russia and two larger ones in Ethiopia. Total indemnity payments in 2024 came to CHF 109.6 million.

Some losses were averted through prompt, active pre-loss management using measures such as restructuring due dates and extending cover. Following the COVID-19 pandemic, crises have emerged such as the conflicts in Ukraine and the Middle East.

In recovery, 245 losses in a total of 41 countries were processed. Recovery is often a challenging, protracted process that depends to a great extent on the country and on the debtor’s willingness or ability to pay. SERV is achieving some success, however, by initiating legal action in the debtor country concerned. Support from political actors such as embassies can also have a very positive effect on recovery in individual cases. The largest recoveries in the year under review came from the United Arab Emirates (CHF 16.1 million), El Salvador (CHF 5.7 million) and India (CHF 5.3 million).

The international agreement on the Debt Service Suspension Initiative (DSSI) for the poorest countries, concluded in 2020 in response to the COVID-19 crisis, has impacted all subsequent financial years. Of the countries that have active debt rescheduling agreements with Switzerland, agreements under the DSSI were agreed with Pakistan and Cameroon to defer the 2020 maturities until the end of 2021. Repayments restarted in mid-2022.

The G20, the countries of the Paris Club and other creditor countries agreed on a “Common Framework for Debt Treatments beyond the DSSI” (Common Framework) in November 2020. The objective of this framework is to find a solution for countries that require support beyond that of the DSSI to overcome their liquidity problems or whose national debt is unsustainable. Debt treatments under the Common Framework for Chad, Ethiopia, Ghana and Zambia have either already been implemented or are at various stages of negotiations.

The risk policy issued by the Board of Directors (BoD) sets out the framework for effective and forward-looking risk management that is in line with SERV’s legal mandate and seeks to ensure its long-term economic viability. The organisation-wide risk management system helps SERV achieve its business goals and protects its assets and reputation. It comprises processes and measures for assessing, managing and communicating risks. The risk management system is refined on an ongoing basis in the interests of continuous improvement.

A variety of risk, scenario and sensitivity analyses were carried out during the year, including the annual process for assessing the top risks. The aim of this assessment is to identify and manage the main threats to net income, operational functionality, the achievement of strategic objectives or SERV’s reputation from the risk catalogue as a whole. The risk catalogue comprises strategic, financial, actuarial and operational risks, which are constantly monitored. SERV also takes into account concentration and horizontal risks, such as reputational and ESG risk, and also addresses emerging risks.

SERV’s risk appetite is defined in the risk strategy. Continuous monitoring of the defined indicators ensures that potential overshoots in risk appetite can be identified and managed at an early stage. The BoD and the Executive Board receive regular updates on the risk situation.

The internal control system (ICS) focuses on the identification of operational risks in key processes and on the description and implementation of suitable risk-mitigating control activities. The risks covered by the ICS are reviewed annually and supplemented or adapted to changes in work processes as necessary. SERV also operates a compliance management system (CMS) to ensure that it adheres to all relevant legal, regulatory, ethical and internal standards.

The Federal Council sets out a framework of obligation that defines the maximum scope of SERV’s insurance obligations. This currently amounts to CHF 14 billion, of which 70.5 per cent had been utilised at the end of 2024.

Risks from SERV’s insurance business are assessed and handled in accordance with standardised principles. They can be hedged or minimised through reinsurance. SERV makes use of this option, for example, when country or counterparty limits are heavily utilised or concentration risks are to be reduced.

The BoD is also obliged to ensure, by informing SECO at an early stage, that the Federal Council is able to issue instructions in the case of transactions of particular significance. In 2024, one transaction underwent the process of identifying politically sensitive transactions that may be of particular significance.

SERV’s cover policy sets out the general cover principles per risk subject category (state, banks or private companies) for each country. It serves as the most important tool for risk management in the insurance business. To determine the cover policy, a country’s economic, financial and political conditions are analysed. The provisions of the OECD and changes to the requirements contained in the legal mandate are also taken into account. In addition to its own analyses, SERV also relies on external sources such as the assessments of recognised rating agencies and the OECD’s country risk categorisation (CRC). The CRC classifications are regularly reviewed by the OECD Country Risk Experts Group. SERV is part of this group.

The Berne Union (BU) permits regular dialogue with export risk insurers (export credit agencies, ECAs) worldwide and with private export credit agencies. In the year under review, SERV hosted a two-day Berne Union conference in Zurich for the first time. The participants were SME specialists from ECAs and private insurers worldwide, who discussed challenges and various solutions relating to how ECAs can provide even better support to SMEs in the future.

A further two General Meetings of the BU also took place in 2024. The title themes were innovation and collaboration, with a view to meeting the challenges of a fast-changing global environment. Attendees discussed the measures and innovations adopted by export credit insurers with regard to their mandates and product ranges, along with the efforts being made to step up cooperation between ECAs, private insurers and multilateral institutions.

Since its foundation, SERV has engaged in regular dialogue with interested business and industry associations and with civil society organisations (NGOs). The Federal Council also expects SERV to maintain this commitment in line with its strategic objectives. Based on this mandate and the additional strategic decision to increase SERV’s public visibility, SERV continued its dialogue with stakeholders. These include associations and partner organisations, banks and insurance companies, NGOs and trade unions, parliament and the federal administration, including Swiss representations abroad.

The main objective of the meetings was to inform the dialogue partners about SERV’s mandate and working methods. Other frequent topics of discussion in the year under review included the ongoing development of SERV and climate issues. As the dialogue partners showed high interest in SERV and in the concerns of the export industry, the public affairs activities will be continued in the coming year.

A targeted partial revision of the legal framework is required to enable SERV to fulfil its mandate and continue to provide the best possible support for the competitiveness of the Swiss export industry. Following the corresponding resolution by the Board of Directors, SERV submitted a proposal paper to the Swiss State Secretariat for Economic Affairs (SECO) and has been in regular contact with SECO and the Federal Finance Administration (FFA) ever since. SECO has not yet reached a decision.

In summer 2024, SERV launched a project to overhaul the online client portal. Interviews and workshops were conducted with our clients to ensure the portal is consistently aligned with their needs. The aim is to improve transparency, clarity and user experience.

Alongside technical and organisational security measures, the correct handling of digital resources is important for data protection and information security at SERV. SERV employees therefore received regular training on the topics of cybercrime and data protection.

As a public export credit agency that supplements private insurance products by insuring non-marketable risks, SERV’s business volume and cash flow from operations are subject to strong fluctuations. Demand for SERV insurance depends on the economic situation of the Swiss export industry, as well as on the countries in which these export transactions take place and what payment and credit terms the contracting parties agree on.