Customer view


Most businesses see the value of credit insurance as being the


protection it provides from the sudden and unexpected insolvency of one of their customers. Paul Ward, Managing Director of Direct


Packaging Solutions, sees this and more: he understands how credit insurance can help his business grow.


through to stretch film, tapes and labels. These products are sourced from around the world and provided to companies of all sizes throughout the UK. Over the last 10 years the Stockport based firm has grown steadily, such that it can now boast a turnover of around £4.5 million. Almost from the start, the company has seen credit insurance as an integral part of its credit management strategy: “It’s what helps me sleep at night,” Paul says, “for it protects us from the very real threat of having to manage a serious bad debt.” Paul also sees credit insurance as part of the company’s growth strategy: “We have grown quite rapidly in recent years,” he continues, “and have come to respect credit insurance not just for the protection it gives us, but also for its role in helping us take on new business.” Direct Packaging Solutions is insured through


F


ounded in 2001, Direct Packaging Solutions provides a range of services and packaging products from corrugated boxes and bubble wrap


Euler Hermes, the largest credit insurer in the world. The size of Euler Hermes, its network of risk offices, and its access to both proprietary and non-proprietary sources of information enable it to underwrite risk on millions of companies worldwide: “What our credit insurer gives us,” Paul says, “is a professional opinion on the risk of doing business with a potential partner, and this in turn enables us to make an informed judgment about how much credit we may be willing to extend, and on what terms.” Paul says that the process is easy: he provides the details of the company with who he is looking to trade and a decision is often immediately forthcoming. If, for whatever reason, a limit is not agreed, then Paul takes this as a warning to exercise caution: “If Euler Hermes declines, then it clearly has access to information about a potential risk,” he says. “There will always be a good reason for it.” On a number of occasions, Paul has taken advantage of Euler Hermes’ CAP Europe product that enables businesses like Direct


Packaging Solutions to receive additional cover (up to £1 million) for what might be considered ‘exceptional’ transactions: “CAP has been a most useful option to us,” Paul continues. “Where ‘standard’ cover has not been available, but we consider the opportunity to be sufficiently attractive, then we have been prepared to pay a premium for a short time to ensure that we are covered. “What credit insurance does, and CAP has done in particular, is open up opportunities for doing business with a wider number of companies but without the risk that we will not get paid.” Late payment, Paul says, continues to be an issue and credit insurance will always have a role. In recent months he has noticed a number of customers pushing out payments by as much as 20 days: “It’s definitely something that we have to keep an eye on,” he concludes, “and report to our insurers. It is reassuring to know, however, that if we have a limit, and we are insured, then we will always be protected.”


"It protects us from the very real threat of having to manage a serious bad debt."


CAP Europe. A market leading


innovation A CAP Europe Policy gives our customers cover, over and above what is available to them under their main primary Policy in the form of CAP and CAP+ credit limits.


Key benefits


• A CAP limit will match a customer’s existing limit under their current Policy (to a maximum of £1million) where a partial credit limit decision has been given.


• CAP+ limits up to £50K may be used where cover has not been given. • CAP Europe Policies are free to set-up and easy to use. Customers are only charged when a limit is actually endorsed to the Policy.


If you would like to find out more, please do not hesitate to email the CAP Europe team at CAPEuropeUK@eulerhermes.com quoting CAP2013 in the subject line. Terms and Conditions apply.


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