Trade credit insurance – also sometimes called accounts receivable insurance – has one simple aim: to support your business when a customer fails to pay a trade debt. That situation may occur when a customer becomes insolvent or does not pay within the contracted terms (a protracted default). The insurance indemnifies up to 90% of the debt owed to you, provided you have traded within the limit we give you for that customer.
Trade credit insurance makes sure invoices will be paid and allows companies to reliably manage the commercial and political risks of trade that are beyond their control.
Every business can benefit from good credit management. Trade credit insurance is one of the most important tools for that purpose. If you’re selling on open account terms to other businesses then trade credit insurance could bring many benefits. Even if you trade on other terms we have services that can support and strengthen your trading activity.
We’ve designed a range of trade credit offers for different types of business and transactions. Every business can benefit from good credit management.
Our insurance is designed for businesses with sales of at least $5million per year, but companies with sales of as little as $1million sometimes find our services to be a good fit, depending on the situation. If your sales are lower than this, our insurance may not be the most suitable product for you. We suggest you speak to your insurance broker or business bank manager who will be able to point to other ways you can protect your business.
Many businesses trade with long standing customers that seem well funded. They believe payment can be relied on. However, even the strongest commercial concerns can be affected by the economic cycle and commercial trends.
It takes considerable investment in data collection to keep track of customers’ financial health and to evaluate the risk of non-payment. We make that investment so you don’t have to and make analysis available to you. Insurance backed by insight allows you to trade with confidence through all phases of the cycle; today and tomorrow.
Yes, we have experience in supporting longer term transactions (for example, multi-year contracts). Get in touch with us and let us know what you need. We’ll be pleased to make recommendations.
Yes. Exporters concerned about political events can also benefit from cover for non-payment as a direct result of events in the buyer’s country. Typical situations can be war or cancellation of a contract by the local government. Another example is when a government imposes rules that stop goods being exported or imported or when regulations prevent hard currency transfers.
There are many benefits to trade credit insurance. If you have just started with trade credit insurance it can be useful to review your processes and procedures so that you gain the greatest value from your policy. We can advise you on best practice too. Here are some examples of what you can do.
Train your employees on the use of our systems. Use our information on limits and grades to improve credit control and defend against catastrophic bad-debt losses.
Demonstrate the enhanced quality of your accounts receivable when negotiating with lenders to access better terms.
Build our information into your sales planning to target the most financially sound new customers.
When developing strategy and business plans, identify the risks in new markets and opportunity areas with our data.
Access our debt collection capabilities and network to accelerate speed of payment. Aligning your processes with our systems will improve efficiency.
Strengthen your cash flow by insuring invoices so that you are indemnified for non-payment.
Design your financial management and reporting to identify performance improvements.
