Companies looking to insure their trade credit risk have always had a choice of insurance provider with different insurers offering different views of the overall risk involved (which sets the premium) and the individual credit risk for each customer supplied (which sets the individual insured credit limit). Credit insurers have had to balance their overall income with their overall level of exposure and have historically offered this single level of pricing / risk coverage.
Insured customers have frequently then told us as LDPA Credit Insurance that they would like to offer higher levels of credit that the insurers are willing to cover, that they would like to insure those higher levels of credit but we’ve been unable to help. All that is now changing.
Coface UK have just announced their “Topliner” product which allows Coface policyholders to purchase additional cover for an additional premium.
This follows EulerEuler Hermes who have offered CAP Europe and CAP Plus top up cover for some months now and Enhanced Cover from HCC International. Each product offers greater levels of cover on individual clients.
Whether or not a company is credit insured, every company’s attitude to trade credit risk will be different. There are questions about the level of bad debt that a company is willing to incur (and the level of bad debt that a company is able to provide for). There is then the question of the likelihood of any one company or any group of companies becoming insolvent and a bad debt being incurred. And finally there is the question of the appropriate amount of credit to allow any one company. All of these questions are a matter of opinion rather than a simple yes / no answer. That has meant that each credit insurance company has only had one offering and each client or prospect has had to either say yes or no.
Now things have got much more interesting and much more complicated with a wide range of insurance companies offering a wide range of price / risk coverage options.
All this means that your company can now create an individual credit insurance policy designed and costed to cover the precise level of trade credit risk that you feel appropriate for your business. LDPA Credit Insurance has always embraced the idea of individual policies for individual businesses and the credit insurance market is now heading in this same direction.
Of course, as the market becomes more complicated, there is a greater reliance on the expert advice of a specialist broker. We at LDPA Credit Insurance look forward to hearing from you.
28th May 2013