One of the comments that we frequently come across when introducing the idea of credit insurance to companies who currently carry their own risk regarding non-payment by trade debtors is that credit insurance only covers customers that are a ‘safe’ risk. This stems from a belief that credit insurers don’t like paying claims. We know this isn’t true anecdotally – our clients remain with us for, on average, 10 years, and they wouldn’t continue renewing their policies for that long if they weren’t enjoying real value.
Admittedly, credit insurance offers a myriad of benefits that help improve business decision-making, even before businesses need to make a claim. However, let’s just deal with that “only cover safe risk” myth for now. Last week we received a presentation from one of our valued insurance partners, Nexus CIFS. Nexus CIFS has been providing credit insurance cover for 16 years, and the total value of claims they have paid during that time has just passed the £100,000,000 mark, an achievement that we’d like to congratulate them on!
The Channel Partnership has been placing business with Nexus CIFS since 2010 and our contribution to these total claims is a mere £1,486,291 (to date). Still, that’s £1,486,291 that our insured clients would have had to write off if they had not had credit insurance in place. We’ve also contributed three claims of more than £175,000 – claims of a value that might have seriously damaged our insured clients’ businesses if they had not had credit insurance to cover the risk.
It’s not just about paying claims. Nexus CIFS have 130,000 individual credit limits running for their insured clients for a total insured value of in excess of £8 billion – hard to imagine that these are all “safe risks”.
Although The Channel Partnership clients represent just 1.5% of the total value of claims paid, and are responsible for only three claims in excess of £175,000, we enjoy a great working relationship with Nexus CIFS. Our clients insured through us with Nexus CIFS rate them highly as an insurer (Nexus CIFS have been finalists in the British Credit Awards for each of the last 5 years and have been winners on 2 occasions) and we expect to place much more business with them in the future. Especially as they continue to provide our insured clients with the confidence to trade with customers across a wide range of credit risk (not just the “safe risks”) and continue to pay out claims where they have provided cover on companies who subsequently fail.
We were really reassured to see so many claims being paid, because although they represent mostly business closures and bankruptcy, the statistics are important in demonstrating the need for a safety net!