Credit Insurance Companies

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. Trade credit insurance covers businesses against the risk of bad debt due to the insolvency or protracted default of their buyers. Trade credit insurance is an invaluable tool in credit management, as, among other things, it provides a replacement of working capital when bad debts and late payments impacts cash flow. Most trade credit insurance policies are specifically tailored to meet individual needs of businesses. This is required as businesses vary so widely that a standard policy will not be adequate in fitting all cases. Though a number of insurance companies underwrite trade credit insurance, many tend to specialise in particular areas.
The current Euler Hermes group has mainly been built up by its two largest subsidiaries, Euler Hermes SFAC in France and Euler Hermes Kreditversicherung in Germany. SFAC was founded in 1927 by several large insurance companies, and has held, the no. 1 position in the French credit insurance market since its inception. SFAC entered the factoring business by creating SFF Affacturage, in 1964, which, in 1999, merged with Credit Lyonnais’ factoring subsidiary. Out of the merger came the new company, EUROFACTOR, which is today, the European leader in integrated factoring. During the 90s, both SFAC (now a holding company) and Hermes began expanding in international markets by acquiring leading credit insurers or creating new subsidiaries. In 1996 AGF became a majority shareholder of the holding company SFAC while Allianz took control over Hermes. Within the same year, the holding company SFAC changed its name to EULER, and in 1998, two years later, Alliaz acquired a majority shareholding in AGF.

Filed under: Uncategorized on February 1st, 2012