Worldline - Registration Document 2016

Risk Factors Insurance and riskmanagement

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: 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) before delivering the product or rendering the service Commercial Acquiring. For each transaction, the Group ●

exposure to these risks; 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 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. Check services. Under its check service business, the Group ●

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4.5

Insurance and riskmanagement

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.

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Worldline 2016 Registration Document