How does credit insurance work

The ultimate goal of a credit insurance policy is not to simply pay claims when they arise, but more importantly to help policyholders avoid any foreseeable losses.
This is why credit insurance offers several services : prevention, management, recovery and compensation.

Credit insurance : How does credit insurance it work

credit insurance operation scheme

Credit insurance : prevention from the risk of non-payment and monitoring your customers and prospects

Credit insurance provides a reliable knowledge about the financial health and payment behaviour of your customers or about your prospects.
The credit insurance company, after analysing the solvency and financial stability of your insured clients, give a specific credit limit on your clients.
The credit limit is the amount you will receive for compensation if your insured customer does not pay.
This is a preventative action that allows the company to select its customers and to manage its the maximum exposure.

Credit insurance : Manage your receivables

Credit insurance provides support in managing your receivables with a tracking system, country-by-country, customer-by-customer and the collection of your export receivables: credit insurance included managing litigation.

Credit insurance: provides recovery and compensation for your unpaid bills

In case of default of one of your customers, the credit insurer pays the amicable or legal collection of your secured debts.

Operating credit insurance

For small amounts, the company has an automatic guarantee but with a low percentage of cover.
For those amounts that are important to cover, the insured requests a guarantee on a buyer and insurer tells him back the amount he is willing to cover.
This prevention is essential in order not to run unnecessary risks, and the seller is a good indicator for the exporter of the financial health of his client.

During the contract, you need to set credit limits for all your new customers.
When there’s a serious delay in payment, you must notify the insurance company.
If the debt is non-collectable, your claim is processed without delay to minimize impact on your cashflow.