Why I love insurance: “It just made perfect sense to me”

Why I love insurance: “It just made perfect sense to me”

Why I love insurance: “It just made perfect sense to me” | Insurance Business New Zealand

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Why I love insurance: “It just made perfect sense to me”

Commercial director left career in property after learning about compelling proposition

Insurance News

By
Terry Gangcuangco

David Meys (pictured), unlike many in the industry, did not stumble upon insurance as a career. In fact, the Coface New Zealand commercial director left the property sector after one and a half decades upon learning about a “compelling” insurance proposition.

Career shift

Speaking with Insurance Business, Meys said: “I got into insurance after the GFC (global financial crisis) when I saw half of Queen Street empty out. There were multiple business failures as a direct result of the financial impact of the GFC. And that was a pivotal moment for me when I saw credit insurance as a product that New Zealand businesses should be using to mitigate the effects of a financial disaster like that.

“[At the time,] I couldn’t understand why more companies weren’t using it in New Zealand, and I’ve been quite passionate about working with New Zealand companies ever since – just to make sure that they’re appreciating the actual risks they’re running and the opportunity to use it as a tool to grow their company.

“The GFC wasn’t my first financial crisis that I went through. I went through the 1987 crash when I was much younger. I went through the Asian financial crisis and the dot-com bust, and I’ve now been through COVID. I’ve seen plenty of countries default on their payments historically, whether it’s Ecuador, Argentina, Italy, Turkey, and so forth. So, for me, having been through all that, when I learned about credit insurance as something companies use globally to trade and avoid catastrophe, it just made perfect sense to me.”

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Meys entered the world of insurance about 12 years ago, starting out at National Credit Insurance prior to his move to Marsh where he served as credit specialties head. At Coface, Meys was the company’s exclusive agent in New Zealand for nearly six years, back when it operated in the country under an agency model. When the global credit insurer was granted a Kiwi licence in 2022 and opened an NZ branch, he took on the position of commercial director.

Prior to switching to insurance, Meys worked in property for about 15 years.

“I was always very passionate about property, and I still love property,” he shared. “But the GFC was very tough in that sector. So, when I heard about credit insurance, I was very excited about looking at ways to mitigate those types of risks which regularly crop up every few years.

“When I heard about credit insurance, there was an opportunity to do something completely different, and I’ve never looked back. I could have easily gone into any other different kind of insurance, but I don’t think I would have found it as compelling.”

Win-win solution

For Meys, credit insurance is a tool that can be used regularly as a business grows, as opposed to, say, “an insurance product that sits on the shelf that they buy because they don’t trust themselves not to make a terrible error,” he said, referring to public liability cover.

“Most people in New Zealand are aware that waving goodbye to a container of product that they’ve carefully made, whether it’s wine or milk powder – whatever the case may be – is a huge risk, to ship it to the other side,” Meys told Insurance Business. “But, really, the ability for someone to trade on a handshake with the guy down the road is as much of a risk.

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“So, it just makes perfect sense where people use credit insurance as a tool to make the whole economy work a lot more professionally, a lot more openly, and as a tool where it’s a win-win, not just for the person that has the insurance policy but also for the buyer. The buyer can then get the credit terms that they want from their supplier. So, it really is a win-win.

“It’s a product that companies can use on a daily basis to identify new markets, new buyers, and they can trade with those buyers and increase their trade, knowing that the worst-case scenario is covered… And their bank will then fund those transactions because the bank is also protected with the receivables insured.”

In Meys’ view, what a credit insurer does is essentially underwrite a company’s ability to grow by, among other things, enabling the insured business to get better trade finance and better bank rates that will help it continue its growth. Additionally, he believes it is an offering that insurance brokers can use to enhance their profile with clients and to win new business by leveraging credit insurance as a point of difference.

“I’m passionate about helping companies grow safely,” Meys said. “One of a company’s biggest assets is their receivables. In a typical business, 40% of their assets are made up of those receivables. So, for a company to securitise that risk, to transfer that risk, means that they can trade and grow safely.

“As soon as we sit down with a company and start talking around their credit control disciplines, how they manage credit risk, who in the organisation is responsible for making decisions over releasing product to a buyer – they may not even know who the legal entity is – people very quickly understand that this is a neglected area of their business, and they very quickly identify credit insurance as the tool to go to and use as an external partner in managing credit risk.

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“In the current climate, businesses are so busy trying to manage a myriad of different risks, but the one that can actually blow an organisation up can often be overlooked. It is a challenging topic to talk to companies about, but it’s one that I really enjoy.”

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