For any business that extends credit to its clients, credit insurance is a valuable asset. For example, say a company has 50 customers and sells washing machines. Of those 50 customers, the washing machine manufacturer feels 20 of those companies are their most important customers because they buy the most merchandise. The washing machine can identify which of those companies they’re most concerned about, maybe because of their history of past late payments, non-payments or their amount of extended credit. Read more »
Credit insurance is instrumental in minimising non payment risks caused by financial, economic or political uncertainties. Credit insurance is also a useful tool for managing financial performances, increasing sales and optimising balance sheet efficiency. Read more »
The end of the nineteenth century, saw the development of credit insurance, mostly in Western Europe between the first and Second World Wars.several credit insurance companies were founded in every country, some of them even managing the political risk to export on behalf of their State. Over the 90s, a concentration of the trade credit insurance market took place and three groups accounted for over 85% of the global credit insurance market. Read more »
For businesses extending credit to their customers, having business credit insurance is very important. Having credit insurance to protect your company against the possible default and insolvency of your customers ideally suited to minimise the risk involved in extending credit to your clients. Read more »
Overall, credit insurance described both trade credit insurance and credit life insurance. In terms of credit life insurance, it is a consumer purchase, often sold with large purchases like a car or house. The insurance will pay off the loan balance in the event of the death or disability of the borrower, and depending on the type of insurance policy, it may also cover job loss if it was at no fault of the borrower. This type of insurance is not only beneficial to the company financing the purchase who is able to satisfy a debt, but it is also a benefit to the borrower who can rest assured that their debt is being paid off. Trade credit insurance, otherwise known as business credit insurance, is a policy and risk management product covering the payment risks resulting from the delivery of goods or services. This branch of credit insurance usually covers a portfolio of buyers and pays an agrees percentage of an invoice or receivable that remains unpaid as a result of protracted default, insolvency or bankruptcy. Read more »
