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4
Risk Factors
Insurance and riskmanagement
25
Worldline
2016 Registration Document
Credit and/or Counterparty Risk
4.4.4
several banking partners.
Credit and/or counterparty risk refers to the risk that a
counterparty will default on its contractual obligations resulting
in financial loss to the Group. The Group believes that it has
limited exposure to concentrations of credit risk due to its large
and diverse customer base. The Group’s greatest credit risk
position is borne with respect to its financial institution
customers. The Group manages this credit risk by consistently
selecting leading financial institutions as clients and by using
The Group is also exposed to some credit risk in connection
with its Commercial Acquiring and checks services businesses:
exposure to these risks;
before delivering the product or rendering the service
purchased by a cardholder, the cardholder can require the
Group to reimburse it for the amount of the transaction. This
credit risk exposure is especially significant where services
are purchased through e-Commerce well in advance of the
time that they are actually rendered (e.g., ticket purchases
through travel agencies). The Group monitors these risks by
selecting financially sound clients, requesting guarantees
(collateral build up, delegation of insurance, etc.) and
checking daily transaction flows to avoid excessive
Commercial Acquiring.
For each transaction, the Group
●
provides a performance guarantee to the merchant in
respect the cardholder’s payment. Therefore, the Group is
exposed to a credit risk in the event of non-payment by the
cardholder. Additionally, the Group offers a guarantee of
“service rendered” to the cardholder. Accordingly, in the
event a merchant goes bankrupt (or ceases to operate)
Check services.
Under its check service business, the Group
●
pays its merchant clients indemnities for unpaid checks that
have been approved by the Group based on a credit scoring
system. To the extent that fees received from merchants for
this service are less than the average levels of bad checks,
the activity can become loss-making. The Group manages
this risk by analyzing bad debt levels for each type of
merchant business and adjusts fees charged to merchants
accordingly.
Insurance and riskmanagement
4.5
Insurance
4.5.1
The Atos group’s management coordinates the Group’s policy
with respect to insurance and is tasked with identifying the
principal insurable risks and quantifying their potential
consequences.
the Group’s revenue (based on the price of coverage).
The Group is insured under a series of policies maintained by
the Atos group with internationally recognized insurance and
reinsurance companies, covering its liabilities at levels that the
Group believes are appropriate. In 2016, the total cost of its
global insurance programs represented approximately 0.2% of
The Group’s entities are covered by the insurance policies
maintained by the Atos group, under which they are insured
parties. These policies include general professional liability
(responsabilité civile professionnelle) and operational and
business interruption liabilities (dommages/pertes d’exploitation).
After the listing of the Company’s shares on Euronext Paris, the
Group continues to be covered under these insurance policies
(in particular the policies maintained through the reinsurance
company wholly owned by the Atos group).
The largest Atos group insurance policies under which the Group
is covered are centrally negotiated by the Atos group. The
general professional liability policy is renewed on January
1, and
the operational and business interruption liability policy is
renewed on April
1. In 2016, these two policies were renewed with
coverage limits of €
200 million and €
150 million, respectively.
The Group is insured under certain other policies covering other
insurable risks for an amount adequate for the risks incurred,
taking into account the size of, and risks incurred by, the Group.
Deductibles are set at a level intended to encourage good risk
management and to control premium costs.