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Global

Credit insurance
for businesses

With credit insurance, you secure your transactions by protecting your cash flow. Credit insurance for businesses is the effective solution for guaranteeing the payment of receivables and securing commercial transactions domestically and abroad.

It enables companies to obtain compensation in the event of customer payment default, while benefiting from risk monitoring and support to optimize their financial management.

Minimise the risk of non-payments
Facilitate access to financing
Support your credit management organisation

€380 Bn

in annual guaranteed commercial transactions

+ 7200

insurance policies managed

110 countries

where we issue policies

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What is credit insurance for businesses?

In a business world where company failures and late payments are frequent, financial risk management has become a priority. A company that sells on credit to its customers automatically exposes itself to unpaid bills: these weaken its cash flow and can compromise its development.

In BtoB, credit insurance for businesses is a powerful protection mechanism against unpaid bills. In effect, it acts as financial cover that protects a company against the risk of non-payment of its invoices. When a company extends payment terms to a customer, it is always taking a risk: that of never being paid. Credit insurance then steps in to cover this risk by guaranteeing payment of trade receivables domestically and internationally.

How does it work?

The company takes out a credit insurance policy with a specialized insurer. The latter monitors the creditworthiness of its business customers, and takes charge of collection as well as compensation in the event of payment default within the limits of the contract. This system, specifically designed for BtoB transactions, helps preserve cash flow, minimize financial losses and ensure business continuity.

A strategic tool for risk management

Credit insurance for businesses is not just a guarantee against non-payment. It is also a genuine risk management tool. Thanks to the analyses provided by insurers, companies can assess their customers' creditworthiness. In this way, they can adjust their payment terms and limit their exposure to risky markets. This proactive approach contributes to reinforcing the company's financial stability and securing its commercial development.

What is the purpose of credit insurance for businesses ?

Credit insurance enables companies to secure their commercial transactions, facilitate access to financing and optimize receivables management. It also helps to strengthen customer relations, fostering sustainable, controlled business growth.

Securing commercial transactions

The primary objective of credit insurance for businesses is to guarantee payment of invoices. In fact, it prevents unpaid receivables from jeopardizing the company's financial health. When a customer fails to pay, the insurer takes over, trying to recover the unpaid debt and then compensating the company up to the guaranteed amount. This security makes it possible to pursue business relations without fear of non-payment.

Easier access to financing

By strengthening the confidence of banks and financial institutions, credit insurance facilitates access to financing for businesses. A company insured against non-payment presents a lower risk to a lender, making it easier to obtain credit and advantageous financing terms. Trade receivables, which represent a significant proportion of a company's assets (on average 40% of total balance sheet assets), thus become an effective lever for financing.

Managing receivables for growth and customer relations

Credit insurance is more than just compensation in the event of non-payment. It includes receivables monitoring and a collection service that helps companies find appropriate solutions, favoring amicable approaches to preserve the business relationship. Thanks to the information provided by the insurer, in particular credit ratings, companies can adapt the terms and conditions offered and pursue their commercial development in complete security. This enables them to anticipate risks, optimize their cash flow and pursue their business development with peace of mind.

How does credit insurance for businesses work?

When a company takes out a credit insurance policy, the insurer begins by analyzing the creditworthiness of customers (a non-payment can be foreseeable but also unforeseeable). This step is crucial in assessing the risk of non-payment and determining the amounts covered. The insurer then uses financial databases and market analyses to issue a customer reliability score (probability of default). At the end of this phase, it sets a coverage ceiling.

If a customer fails to pay an invoice within the contractual timeframe, the insurer then steps in to recover the debt. It initially initiates amicable recovery procedures to collect the sums due. As a last resort, the insurer may indemnify the company up to the amount stipulated in the insurance contract. This indemnification helps to offset the financial loss and secure cash flow.

In addition, credit insurance includes a prevention service by carrying out ongoing risk monitoring. The insurer continuously updates its solvency analyses, enabling it to inform the company of changes in its customers' financial situation. This monitoring enables credit policies to be adapted and unpleasant surprises to be avoided.

Summary of how credit insurance for businesses works

The triptych of credit insurance: PREVENTION - RECOVERY - INDEMNIFICATION

Analyze the solvency of customers
Fix a coverage ceiling according to the risk level of each customer
Intervene via a recovery process in the event of non-payment
Indemnify the company to limit losses
Alert on the financial evolution of customers

What types of businesses benefit from credit insurance?

Credit insurance is aimed at companies of all sizes and in all sectors. For large groups and multinationals, it provides a tool for managing customer risks on larger volumes. For SMEs, more vulnerable to non-payment, it helps secure their sales and avoid cascading non-payments where the default of one customer leads to financial difficulties for the entire chain of suppliers.

An ideal solution for exporters

Exporting companies work with foreign buyers whose credit worthiness is difficult to assess. As a result, they are particularly concerned by the risk of non-payment. With credit insurance, they can expand internationally in complete security, since they benefit from coverage against country risks (change of government, war, financial crisis...) and economic instabilities (recession, inflation, banking sector difficulties...).

What are the principal schemes of credit insurance for businesses?

There are several possible approaches: the global contract, the specific contract, '1st euro' credit insurance, 'excess of loss' credit insurance and export credit insurance.

The main schemes

Global contract
This type of contract covers the entire customer portfolio of a company. It is suitable for companies with a large number of customers who wish to secure all their commercial transactions.
Specific contract
In contrast to the global contract, some companies choose to cover only part of their receivables. Generally, they favor high-risk customers or markets with special features such as volatile sectors, unstable geographical areas or emerging activities. The main advantage of this type of contract lies in its adaptability to the company's needs.
'1^st euro' credit insurance
This insurance comes into play from the first unpaid euro. All customers are studied and monitored by the credit insurer's analysts. In the event of non-payment, you mandate the credit insurer to collect your receivables; it is also possible to keep the amicable collection of your receivables in-house. '1st euro' credit insurance is the most frequently used solution, as it is the most structuring and reassuring for the company. In addition, it is the most adaptable to the particularities of each company.
'Excess of loss' credit insurance
This insurance provides compensation for losses over and above a deductible and within agreed limits. The aim here is to indemnify losses considered exceptional that come in excess of a certain volume of unpaid invoices that the insured company believes possible to retain at its expense. This type of cover is reserved for companies with significant sales, and is particularly suited to those with advanced credit management systems. The latter determines independently and/or in consultation with the insurer the limits of cover to be granted to its customers. This solution can be combined with a business information contract, or even an outsourced collection service.
Export credit insurance
This is specifically designed for companies engaged in international trade. This insurance covers country risks, economic fluctuations and political incidents that may affect the payment of invoices.

Choosing AU Group: 4 advantages that make all the difference

Unrivalled expertise in credit insurance

With over 310 experts present in 50 countries, AU Group is the leading independent provider of credit insurance and trade receivables financing. For years, we have been putting our in-depth market expertise at the service of companies for tailor-made strategic support.

Our strong point? A unique ability to negotiate differentiating and competitive solutions.

Customized support and innovative solutions

Our approach is based on a detailed analysis of your challenges, in-depth market research and rigorous negotiation with insurers and factors. We devise strategies tailored to your sector, its specific features and your company's ambitions, to guarantee flexible yet robust, long-term solutions. To achieve this, we rely on a resolutely innovative approach. Thanks to high-performance digital tools, we give you a clear view of country risks, optimize your receivables management and access strategic data to secure your decisions. These technological solutions provide you with precise control and proactive risk management, combining human expertise with the power of digital technology for ever more effective and responsive support.

Thus, we guarantee you robust, long-term solutions.

Commitment at every stage to maximize your performance

We optimize your financial management, strengthen your coverage and help you obtain advantageous financing terms. Thanks to our agile structure and responsive organization, we're at your side every day to manage your contract and adjust your coverages as your needs evolve. We defend your interests with both insurers and financial partners.

Our mission doesn't stop with setting up a contract: we're with you every step of the way to secure your business and support your growth.

A close relationship and ongoing support

Customer risk management is a strategic challenge. To meet this challenge, our experienced account managers support you on a daily basis with tailor-made monitoring, regular analysis and detailed reporting. Thanks to our proactive approach, we optimize your coverage, facilitate claims management and help you secure your cash flow.

To go even further while allowing you ever greater autonomy, we provide you with powerful digital tools enabling you to monitor country risk trends, effectively manage your receivables and access strategic data to inform your decisions. By combining our human expertise with advanced technologies, we offer you optimized, responsive risk management.

Our aim: to enable you to focus on your growth with complete peace of mind, with a trusted partner at your side.

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Frequently asked questions

All the answers to your questions about credit insurance.

Credit insurance is a solution that protects you against the risk of non-payment by your customers. It guarantees payment of your receivables in the event of non-payment by a customer, whether through financial default (bankruptcy, receivership) or prolonged delay. Credit insurance works for your customers anywhere in the world.
It operates on three pillars:
- Customer risk assessment: the insurer analyses the creditworthiness of customers and assigns a credit limit.
- Recovery: in the event of late payment, the insurer can intervene to recover the funds.
- Indemnification: if the insurer is unable to recover the debt, the company is indemnified in accordance with the terms of the contract.
The credit insurance market is dominated by three major international players, offering customer risk cover solutions to companies of all sizes: Allianz Trade, Coface and Atradius. There are other insurers that stand out in specific markets: AIG, Groupama, Credendo, Cartan Trade, etc.
Taking out credit insurance allows you to :
- Secure your sales by avoiding financial losses due to non-payment.
- Protect your cash flow and ensure the continuity of your business even in the event of non-payment
- Optimise management of your WCR thanks to better visibility of buyer solvency.
- Facilitate access to finance: you'll be able to obtain better terms and conditions.
Credit insurance mainly covers :
- Commercial risk: customer insolvency (bankruptcy, liquidation) or late payment.
- Political risk: inability to pay due to geopolitical events (expropriation, war, currency transfer restrictions).
The cost of credit insurance varies according to several criteria:
- Insured turnover: this generally represents the basis for calculating the premium and generates a volume effect on the premium rate
- Business sector: certain industries present a higher risk.
- Payment history: a good payment history can reduce the premium.
- The level of cover chosen and the insurer's retention rate: a contract covering 100% of receivables will cost more than a partial contract.
- Geographical area(s) covered: credit insurance can include political risk.
Credit insurance and factoring are two distinct solutions:
Credit insurance protects against non-payment, but leaves the company to manage its receivables. It provides compensation in the event of non-payment.
Factoring involves transferring your receivables to a factor (a financial organisation), which advances the funds and takes charge of collection.
Credit insurance is ideal for :
- Analysing and monitoring the quality of your customers
- Outsourcing part of your debt collection
- Protecting yourself against the risk of non-payment by being indemnified in the event of a claim by your customer
Factoring is ideal for :
- Improving cash flow and financing WCR (Working Capital Requirement): the main objective is to provide immediate cash to the company in exchange for the sale of its trade receivables. This makes it possible to compensate for sometimes long payment periods and to finance current or unforeseen activities.
- Reduce financial risk: by transferring receivables to a factoring company, companies protect themselves against the risk of customer insolvency, with a guarantee against non-payment.
- Optimise administrative management: the factor takes charge of invoice collection, including reminders and monitoring payments, thereby reducing the administrative burden on the company.
- Stabilise financial flows: factoring helps to improve the predictability of income by avoiding disruption caused by late payment or disputes.
- Support growth: by quickly releasing funds, factoring enables companies to invest in their development or seize opportunities without waiting for customer payments.
In the event of late payment or non-payment, the company must follow these steps:
1. Notification of the claim to the insurer after a period defined in the contract (e.g. 60 days after the due date).
2. Amicable and legal recovery: the insurer may attempt to recover the funds through its network.
3. Compensation: if recovery fails, the insurer reimburses a percentage of the claim, often between 70% and 90%.

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