What is Credit Insurance?

In its most simple form it is the insurance of your debtors or accounts receivable. It can be provided for both domestic sales and international exports. Credit insurance protects your business against commericial or geopolitical changes beyond your control. Credit Insurance provides a safety net so that you can extend a credit line to new customers or even to existing ones.

Advantages of credit insurance

Increase your sales Credit insurance allows you to grow your business without worry. Whether you are trying to expand credit lines with existing customers, or extend competitive open credit terms to new accounts, using credit insurance to reduce or eliminate the risk is a great way to safely grow your business.

Improve your borrowing and cost of finance Having a credit insurance policy in place can assist when negotiating with banks on borrowing and its related costs.

It helps with your credit decision & information on your customers When you implement a credit insurance program you are not just buying coverage on your receivables, you are getting a partner in credit risk management whose goal is to help you avoid credit losses before they happen and back you up when they do.

Allows companies to lower their bad debt reserve By reducing the bad debt reserve on this scale, you will be able to take excess bad debt reserves back into income (by provisioning significantly less) thus improving earnings, shareholder equity and financial ratios

Protect your balance sheet A number of companies derive 80% of their business from 20% of their clients. Can companies afford a default by a client who is part of this 20%?

In a nutshell, this is an essential tool for profitable growth and operations for any company.

A quote for Credit Insurance commits you to nothing and highlights, in more detail, the many benefits to be derived from a policy. Contact Pioneer Insurance Brokers today and see how your company can benefit from the security and information afforded by a Credit Insurance policy, as well as access to sophisticated debt collection and legal recovery services.

For more information on our Credit Insurance cover, please don’t hesitate to get in touch.