Credit insurance protects a company against the risk of non-payment by its business customers. The insurer monitors customers, sets a credit limit for each one, and reimburses a portion of the receivable in the event of non-payment. The main players in this market are Allianz Trade (formerly Euler Hermes), Atradius, and Coface.
Example
A client insured for €100,000 goes bankrupt with debts of €60,000. After the claim is filed, the insurer pays out a large portion of the amount, according to the percentage specified in the policy (often around 90%).
Why It’s Important
It helps ensure cash flow and facilitates sales to new customers. Since it’s fully integrated with the collections software, it prevents you from missing a filing or exceeding a limit.
For more information: the Allianz Trade connector, Aston AI and Atradius, and Aston AI and Coface.
See also: credit limit, customer claim, customer risk.
