Credit insurance – a short explanation
Credit insurance is an instrument in debtor management. It protects your company from the insolvency of one or several of your customer(s) and additionally reduces your risk through continuous surveillance of your customers.
An overview of the primary functions of a credit insurer:
- Damage prevention
by timely notification before there is any loss of receivables (early warning system)
- Damage reduction
by bundling the interests of several insured parties
- Damage compensation
should a loss or an event of damage arise
A credit insurance will support you in assessing your customers‘ creditworthiness. It examines a company’s economic situation and performs a broad analysis of its financial situation. The most diverse information is collected in this respect: Reports from credit agencies, the Federal Gazette, balance sheets and corporate figures, reports from policyholders and much more. A credit insurance puts you in the position of objectively and professionally assessing your business partners from the start – which is of utmost importance already for negotiating your terms and conditions.
If a customer is in arrears or if payment default is impending, the credit insurance is activated and, if necessary, supports you with debt collection. And should that be unsuccessful, the credit insurance will not leave you alone with your losses on receivables: It covers both, goods and services that have already been invoiced, and services or performances already rendered but not yet invoiced. Optionally, it also includes the protection of advance services and additional purchases (production risk), risks of market price differences, as well as insurance protection against repayment claims by your (former) business partner’s insolvency administrator.
When talking with banks, the importance of credit insurance is highlighted from yet another angle. A bank’s rating of a company’s debtor management is decisive for the terms and conditions granted. Moreover, the reservation of ownership agreed upon with your customers is upgraded significantly by a credit insurance. That means the more thoroughly a company already evaluates its customers, the more obliging banks can be.
Frequently asked questions
We here compiled the factors contributing to the calculation. (German language)
We obtain offers and tenders for you, provide for comparability and answer all your questions relating to credit insurance. We thus help you make the right decision for your company. Because it is not always immediately obvious which credit insurance provider is best for you. In short: We provide you with an overview!
Of course, it goes without saying: We also accompany you for the settlement of loss with the insurer. Likewise, we will support you in the discussion on insufficiently subscribed limits and, if necessary, we will show you additional possibilities for adequate protection.
It’s possible that a change may be necessary even after long-standing contracts with credit insurers. The points you should take into account are summarized here. (German language)
We are collaborating with practically all important credit insurers: Atradius, Coface, Euler Hermes, R+V and Zurich. But through us you can also obtain sector-specific or add-on solutions from TCRE, VHV, Credimundi, Prisma, Isopo and many more.
No additional costs are incurred for you by using our service. We will support and advise you before, during and after the contract conclusion. This extends to all matters of a credit insurance – from a review of limits to the claims settlement. You’ll see: Competition among insurers will boost and stimulate business!