Simple payment terms are a competitive advantage
Trading always involves business and political risks. When companies provide goods or services on account, their customers are sometimes unable – or unwilling – to pay. Payment in advance, in cash or via a letter of credit provides more security, but it can make businesses less competitive. It is not uncommon for rival firms to win a contract because their simpler payment terms are more attractive.
What benefits does credit insurance offer?
Credit insurance protects your company even in times of economic difficulty, whether a single customer becomes insolvent or an entire market dries up.
It can include the following services:
- Credit check: A continually updated, discreet credit check of business partners means that you always know whether a specific company is able to pay. Potential insolvencies in the customer portfolio are flagged up at an early stage, allowing you to take preventive action.
- Debt collection: If a bill is overdue, a global receivables management system takes care of it – whatever the country, whatever the continent.
- Guaranteed payment: If a default is unavoidable despite preventive measures, compensation for the amount due is paid at the agreed time.
Credit insurance thus offers support throughout the customer-related value chain, from prevention to intervention and compensation.
Prevention: Loss prevention
Intervention: Loss mitigation
Compensation: Loss coverage
What is export risk insurance?
Export risk insurance is a form of credit insurance. Unlike conventional credit insurance, however, it is also valid abroad, offering global debtor coverage. Many customers add coverage for political risks such as state intervention, war or transfer bans.
No hassle with outstanding customer invoices
With credit insurance, companies do not have to deal with delayed incoming payments or worry about possible payment defaults. Instead, they can secure their liquidity over the long term – and benefit from further advantages:
- Plannable budgets: There are no unquantifiable losses – just an easy-to-calculate insurance premium.
- Support for trade finance: The ability to pay signals better creditworthiness, thus opening up easier access to financing opportunities.
Advantages of credit insurance at a glance
- Tap into new customer segments: support with the customer acquisition process and customer base monitoring
- Win more contracts: by offering delivery on open terms and granting payment periods
- Increase revenues: faster, safe growth in new markets and help with business development
- Save resources: outsourced credit management and cost-optimized collection without a contingency fee
- Global network
- Focus: on your core business
- Payment security: the insurance pays if the customer does not
- Improve liquidity: avoid financial losses, remain solvent, and secure the company's liquidity
- Ensure survival: key customers defaulting can threaten the company's continued existence
