The global economy and international trade are constantly evolving bringing new economic pressures with the risk of insolvency and defaults. Protect your business from these risks with our tailored trade credit insurance solutions.
What is trade credit insurance?
Trade credit insurance provides indemnification for the non-payment of trade receivables, thereby enabling sales growth without a corresponding increase in risk.
Trade credit insurance can also enable a company to secure more favorable financing terms, as insured accounts receivable may be used as collateral and can support securitizations, receivables purchase and supplier credit/payables programs.
Trade credit insurance can enhance credit risk management by using the credit information, risk monitoring and debt collection services insurers provide. The use of credit limits, underwritten by insurers, helps an insured monitor its debtor risk. This helps the company manage its sales policy by enabling it to focus on creditworthy customers, appropriate payment terms and security conditions. Trade credit insurance claims payments improve cash flow uncertainty.
There are several ways a company can use trade credit insurance to protect its business. It can*:
- Outsource the credit analysis to the insurer, providing comprehensive ground-up cover and cash flow replacement (whole turnover)
- Use insurance to support in-house credit management standards and processes supported by significant risk retention to align interests between insured and insurer and providing balance sheet protection (excess of loss)
- Insure selected or single risks based on acceptable spread of risk or large concentration on certain buyers or sectors, provided the selection criteria are not too limited or adverse
*Trade Credit insurance policies will vary depending on the agreed terms and conditions. Subject to availability and insurer selection.
What can our trade credit insurance solutions cover?
Our specialists provide solutions that cover non-payment of trade receivables caused by:
- Insolvency
- Protracted default
- Political risk
- Non-honouring of letters of credit
- Non-delivery of pre-paid goods
- Loss of pre-delivery costs
Who are our trade credit insurance solutions for?
Combining robust credit management policies and procedures with properly structured trade credit insurance protection, we serve:
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Large national and multi-national companies looking to:
- Improve credit management
- Open up lines of credit and expand sales markets
- Protect cash flow
- Enhance their balance sheet to increase shareholder value
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Banks:
- We represent some of the largest banks worldwide and with many transactions syndicated to other banks our work touches and impacts most major financial institutions. The trade credit insurance programs we arrange support securitisations, receivables purchase and supplier credit/payable facilities.
Why choose WTW for trade credit insurance?
- The trade credit team sits within Financial Solutions (FS), which provides a comprehensive and complementary suite of political risk and trade credit insurance solutions.
- Our team specializes in large and structured excess of loss (XoL) programs.
- We forge strong relationships with clients by listening, building trust, aligning interests and investing in long-term partnerships with them.
- We understand best practices in credit risk management.
- We will work with you to design tailored programs, adapting insurance to match your business processes and needs. Our solutions will mirror your systems without imposing new or onerous costs or procedures.
