Trade Credit Insurance

Scope:

Trade Receivables account for up to 40% of a typical corporate’s current assets – even more for the assets of traders and financiers. Trade Credit Insurance can be a vital tool in securing significant exposures as well as playing a crucial role in credit management and in the availability of and access to finance.  

With regards to banks, when properly structured, Credit Insurance can have important ancillary benefits in the management of aggregations and even regulatory capital (as a Basel II compliant Credit Risk Mitigant).

Cover is readily tailored to the demands of an individual transaction and can secure against exposures arising both before and after the delivery of goods or commodities. This is especially important where bespoke manufactured goods are involved; increasing production costs and supply whilst reducing the ability to locate alternative buyers.

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Applies to:

Operators, traders and financiers with substantial trade receivables.

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How it works:

Cover can protect a seller or their financier against the potential loss before shipment of:

• Costs and expenses incurred up to the date that the contract is frustrated.
• Additional costs in liquidating contracts with sub-contractors and suppliers.
• Loss of expected profit.

Cover will respond to the financial failure or non-performance of the buyer.

After goods or commodities have been delivered cover will protect an exporter against the loss of unpaid invoices (inclusive of profit) arising from non-payment by the Buyer or any guarantor (including non-honouring by the opening bank of any letter of credit).

Cover can be arranged for single exposures or on a portfolio basis.

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Markets:

London, Singapore, other European Insurers

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Price Range:

Dependent on turnover, industry and spread of risk.

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Self Retention:

Typically 10% co-insurance

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Time to market:

Non-binding indication within 72 hours. Full underwriting to take 30-60 days.