Credit insurance

What is the purpose of credit insurance?

Credit insurance fulfils several essential functions for your company: 

1. Protection against non-payment
2. Securing your cash flow
3. Facilitating access to bank financing
4. Aiding commercial decision-making
5. Supporting the growth and expansion of your business for domestic and export sales

How does credit insurance work?

Credit insurance works in several stages.

1. Risk assessment: the insurer analyses your customers' creditworthiness.
2. Granting cover: credit limits are granted for each customer.
3. Continuous monitoring: the insurer follows the evolution of your customers' financial situation.
4. Collection: if you wish, the insurer can handle the recovery process .
5. Compensation: in the event of non-payment, the insurer pays you an indemnity according to the terms of the policy.

Who is credit insurance intended for?

Credit insurance meets your needs

Growth stagnation, increased non-payments, and the anticipated rise in business failures are all risk factors that require improved visibility, responsiveness, and the implementation of solutions to secure your accounts receivable. Today, credit insurance is clearly associated with best management practices.

What are the main credit insurance schemes ?

Each company has its own organisation, its own business model and different objectives. That's why it's essential to identify your needs in order to structure the most suitable solution. This depends on a multitude of parameters such as: the spread of your customers, previous loss history, the credit period, geographical zones, and special characteristics of a business sector...

Different main schemes exist: 
 

1. Whole turnover (or Comprehensive) Credit insurance 

The insurance applies as soon as you have a first outstanding payment (above any franchise imposed by the insurer).

All your customers are assessed and monitored by the credit insurer's analysts. In the event of non-payment, you can manage the debt recovery until the maximum time limit for passing unpaid debts to the insurer. 'Whole turnover' credit insurance is a commonly used solution because it provides the most structure and security for the business. It can be adapted to the specific needs of each company. 
 

2. Excess of Loss credit insurance:

Commercial risk can also be covered by "Excess of Loss" policies.

These provide compensation for losses exceeding an annual deductible and within agreed limits.

This type of insurance compensates for exceptional losses beyond bad debts which the client is prepared to retain.

This type of cover is often preferred by  for companies with significant turnover with advanced credit management systems and which wish to insure for abnormal levels of loss.

The insurer will delegate credit risk assessment for most debtors to the client’s Credit Manager and only review the top %age of risks . This solution can be combined with a commercial information contract or even an outsourced debt collection service.
 

3. Single Risk or Selected Buyers Portfolio:

You can apply for insurance on a single or limited number of customers. 

 How AU Group supports you

When you choose AU Group, you benefit from a dedicated team of experts, capable of understanding your specific needs and advising you effectively. They understand your challenges and possess in-depth knowledge of the insurance market, existing solutions and insurers; this gives you access to the best offers and conditions.

We present you with innovative solutions, adapted to changes in your sector and your needs

Finally, we offer powerful digital management tools that facilitate the daily monitoring of your policies and the optimisation of your credit limits.

Discover our expertise