Business Money


® Name of lender


Credit Insurance Tel / Fax / www Atradius


T: 0800 212131 F: 029 2082 4339 www.atradius.co.uk


Coface


T: 01923 478111 F: 01923 478101


enquiries@cofaceuk.com www.cofaceuk.com


Credit Indemnity & Financial Services


T: 020 7903 7300 F: 020 7903 0590 info@creditindemnity.com www.creditindemnity.com


Euler Hermes UK plc


T: 0800 056 5452 F: 020 7860 2455 enquiries@euler hermes.com www.eulerhermes.co.uk


HCC International Insurance Co plc


T: 01664 423333 F: 01664 424892 creditsales@hccint.com www.credituk.hccint.com


Time est. in UK


UK premium income


Since 1918 Not disclosed Policies available


Domestic and export credit insurance and receivables management. Structured credit and political risk solutions. Worldwide recoveries and collections. Business intelligence services.


Since 1993 Not disclosed


Whole turnover domestic and export credit insurance, key account, specifi c account and political risk.


11 years Not disclosed


Whole turnover, commercial risk, commercial and political risk and aggregate first loss with either a fixed premium or variable rate premium.


Strengths


The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence through 160 offices in 42 countries. Atradius has access to credit information on 60 million companies worldwide and makes more than 20,000 trade credit limit decisions daily via a unique global database, so it can monitor risks on anywhere in the world, from anywhere in the world on behalf of its customers.


A global provider of credit management solutions with a direct presence in 67 countries and local service provision in 97 countries. Other services include receivables fi nance, receivables management and business information. Coface has a database of 50 million companies with an exclusive company identifi cation process.


CIFS is part of Novae Group plc and trades as a division of Novae Underwriting Ltd. CIFS underwrites on behalf of various Lloyd’s syndicates, including Novae syndicate 2007 and benefits from Lloyd’s rating of A+ from Standard & Poor’s. Flexible and innovative approach with prompt claim payments. Unique internet system for fast credit limit delivery and easy to use policy management.


Since 1918 Not disclosed


Whole turnover, excess of loss, key accounts for domestic and/or export sales including political risk. Specialist terms and dedicated policies for SMEs, mid-large corporates and MNCs.


Since 1982 Not disclosed Whole turnover, single risk, key account, factors/ discounters policy.


All information © Copyright Business-Money.com Ltd 2011


Part of Allianz, the Euler Hermes Group is rated AA - by Standard & Poor’s, has a 36% market share, monitors the financial health of more than 40 million businesses worldwide and protects more than EUR 700bn of business transactions. Offices are present in over 50 countries on five continents, offering local support to clients and knowledge of local risks. Additional receivables management tools available include credit opinions, bonding and commercial debt collections.


HCC International Insurance Company plc is an organisation with experience stretching over three decades, providing credit insurance to businesses in the UK. Rated AA by Standard & Poors.


The information in this table is updated every month. The Guide to Business Money Tables is on page 74


A guide to trade credit insurance T


rade credit insurance protects a company from the risk of non-payment of trade receivables for its business to business transactions. It offers cover for two specific risks:


Insolvency in its widest form: formal liquidation, members voluntary arrangement, receivership, or any local in-country equivalent.


Protracted default – where an undisputed debt is simply not paid by the customer. The product can be varied with many different forms. In general these tend to fall into three categories: the whole turnover approach; selective account cover; or, the catastrophe cover.


Whole turnover This offers cover for the total debtor book. As it provides the insurer with a complete spread of risk and is therefore normally priced very competitively.


A level of self discretion is offered to most purchasers, subject to their credit management procedures, which allows them to offer credit terms for smaller sums to all customers while still being insured. Above this discretionary figure, the insurer will vet all customers and agree an insurer credit limit as a maximum level of cover. These can be increased, and in some instances decreased, throughout the terms of the policy. Seasonal peaks


24 June 2011


can be covered, along with growth initiatives, or new product launches. The percentage of cover can differ by insurer, but it is usually between 80% and 90% of the insured debt.


Selective account This product offers a more selective approach to the method above. A purchaser can specify which customers are to be covered. However, as selection can be deemed more risky for the insurer, the costs begin to rise. There is no discretionary limit offered with this


type of cover, and all debtor names are vetted by insurers. The percentage of cover is again usually between 80% and 90% of the insured debt.


Catastrophe This approach demands a policy deductible. This is a self insurance figure up to which the purchaser accepts as bad debt losses, before any insurance cover is effective.


Due to the nature of this product, much higher levels of discretion are offered, but the insurer will complete a full credit management audit, prior to offering terms. Cover can be as high as 100% above the deductible figure. All trade credit policies are administered in a similar way – they demand reporting of debts which stray beyond 60 days after the original due


Business Money – RSM Tenon


date, collection action to take place (either through the insurer, or independently), and in the event of a claim completed documentation to verify and validate the outstanding debt.


Disputed debts are not covered (at least not until the dispute is resolved), nor are sales to subsidiary or associated companies. Insurers do not offer cover for personal debt, or sales to individuals in their private capacity.


Credit insurance can enhance a company’s


performance. Not only by instilling credit disciplines, but also through the need to actively mange the aged debtor balances. It allows companies to trade with greater confidence, knowing they have support from a third party insurer who will settle outstanding debts if they turn bad. It can also be used as a tool for negotiation with financial institutions, using the debtor portfolio as an asset on which additional funding can be raised. Essentially, however, it is an information product – delivering an early warning update based on financial and non-financial information, including adverse trading patterns. In the ever- changing economic climate, it is a tool that can bring a competitive advantage and a comfort to many companies.


Tim Smith, leader, Marsh’s Trade Credit Practice, tel: +44 (0) 20 7357 5493, e-mail: tim.j.smith@marsh.com


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