Understanding Trade Risk and Uncertainty Amid COVID-19

June 2020

5 takeaways from our "Risky Business" CFO survey

  1. Unsurprisingly, 93% of CFOs and their direct reports say their organization has been impacted by COVID-19, and 94% predict that their company will change their overall risk strategy in preparation for future crises.
  2. Respondents reported a 61% year-over-year increase in customer payment defaults. 41% said they experienced major cash flow disruptions as a result of COVID-19.
  3. Is restricting credit terms a viable long-term strategy? Nearly half of CFOs and their direct reports (45%) said they planned to be more restrictive with extending credit terms in the future. However, in the portion of our survey that took place prior to COVID-19, 80% of respondents said they had experienced a loss of business from stricter payment terms. 
  4. Once workfplace safety needs have been addressed, it's clear financial leaders are focused on helping reignite their companies' growth engines. When asked about their concerns for the next 1-2 years, respondents said their biggest worry was Workplace Safety (22%) followed closely by Achieving Growth (20%). Workplace Safety was also the top short-term concern as well.
  5. One third (33%) of CFOs and their direct reports surveyed said they are having to make signficant changes to their business models due to the impact of COVID-19.
"If businesses can’t grow and trade on a global scale, that only exacerbates the slowdown we are seeing in the world economy. In just a few months, we have seen business leaders restrict credit terms and slash expansion plans. This is why it is so important to consider risk mitigation strategies like trade credit insurance, which allows for growth even in times of crisis." 

       — James Daly, President and CEO, Allianz Trade Americas
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