New in Credit Insurance

Are you new in the credit insurance world and you are studying whether it is the right solution for your company?

  What is the credit risk?

Credit risk is the possible loss that a company assumes when it sells by installment as a consequence of the breach of the payment obligations of its customers. This non-payment can be motivated by a situation of financial insolvency, lack of liquidity, or by the involuntary or intentional negligence of our client. The work of our analysts is to discover if that risk exists, quantify it and ensure it.

Globalization involves opportunities and risks. Companies are getting bigger every day and their client portfolios are increasingly diversified. Being the most of the times very difficult to control to who they sell, if it is safe to give them credits or even if it is safe to sell to them.

My company offers services instead of products. Can I buy a credit insurance?

Yes, coverage is available for both goods and services. Whenever a sale is made on business to business credit it is possible and highly advisable to take out insurance.

If I sell to the public sector, do I have to include this in the volume of business to be insured?

No. Regarding the buyer of the public sector, it is considered that there is no risk of default. You will only pay for insurable billing.

What is the insurable billing volume?

The insurable billing volume may be partially or totally covered, depending on your needs. You will not have to pay the entire portfolio if the subscriber declines some coverage.

Can the insurer withdraw coverage during the term of the policy?

The insurer pays a large amount of resources to monitor credit risk, if they have negative information about an insured they could decline future coverage but the goods or services that have already been provided are always covered.

*In ABK we propose a unique and adaptable solution to solve this problem. For more information contactus.

-What happens if I am obliged to provide but the subscriber cuts me the limit of credit?

Most credit insurance policies have a clause that allows for a 30-day grace period for the business to continue while looking for new information to reevaluate the situation. If your sales contract is legally binding, the coverage can be added. Coverage will be maintained unless it is evident that the buyer is about to fail.

*ABK Credit proposes a unique and adaptable solution to solve this problem. For more contactus.

 

What does the credit insurance covers?

Non-payment by a debtor company is covered, due to de facto insolvencies (“disappearance of the debtor or default”) or Legal insolvency (Creditors’s bankrupt , Chapter XI …).

Do I have to cover all my clients?

In general, the most efficient and profitable policy in the market is coverage for the whole volume of business, but we take care to adapt to your needs and preferences to find the best option for each case. You will have the best coverage with the lowest possible price.

Does the insurer fix the coverage on all my clients?

The majority of insurers establish a “discretionary credit limit”, below which they grant autonomy in the classification to the policyholder. An insured can maximize coverage by using the commercial experience of payment behavior and other means to justify the insured credit limits.

ABK CREDIT offers the solution to achieve maximum autonomy in the classification of buyers, which will be commented in a personal or digital interview. Contact Us.

How much will it cost me?

The minimum premiums are set for a period of 12 months and currently stand at around € 3,000.

Already Existing Policy Review

Currently insured: Why should I review my existing contracts or policies?

How can I be sure that I have the most appropriate policy for my needs?

As described in the section of the web “Products and Services”, there are a large number of different types of coverage available in the market. Insurers are continuously introducing services and new concepts. We are constantly learning and innovating from clients and insurers in order to offer the most optimal and updated solution for your company.

Is my current credit insurance company providing me with the best coverage available in the market?

We do not like to talk about third parties so we can only say that ABK Credit, in each renewal, will establish if there are deficiencies in the coverage and carry out a complete market analysis to compare both the price and the coverage, to be sure that your policy will offer you the best coverage at the best price.

How can I know if my agent is giving me the best service?

Your broker should support requests for buyer credit limit and claims recoveries, demonstrating in the renewal that their current conditions are the best available in the market. We understand that the person who can best perform this job is an independent and specialist broker such as ABK Credit. We understand that it is essential to avoid direct contracting with Insurers or agents that will always be in favor of the Insurer in the event of substantial discrepancies.

Do you have a local broker for me?

ABK Credit has presence and full scope in the Iberian Peninsula and as a founding member of Credea, we also offer worldwide support.

What can ABK CREDIT offer, what is different?

Let us explain in depth the differences in a personal interview, conference or Webex / Skype, that we can arrange through our contact page.

Exporter client

Do you export and need a credit insurance that adapts to the markets in which the risk increases due to the customer’s distance?

Can I operate in cash against delivery of documents through the banking system. Do I need to get coverage?

The insurance entities differ on this point. The risk of a foreign bank announce the ownership documents without making the payment is real and often occurs as is the bankruptcy of a foreign bank. The risk assessment will be on your side, but coverage is available.

What does the export credit insurance cover?

In addition to the default of your client, the coverage extends to political risk, that is, currency inconvertibility. It may happen that an importer has funds in local currency and the Government imposes restrictions on the exchange of currency and there is a default due to the impossibility of changing to € or US $.

If my buyer refuses to pay can I claim?

The credit insurers have built an extensive support network to help collect overdue accounts in foreign countries, but if this fails, the claim will be paid within the next 6 months from the due date. You do not have to worry about negotiating attorney’s fees or other fees in the export markets.

I only have some export accounts on credit terms. Is there a policy for this?

It will probably be determined by the cost levels and the minimum premium of the export policies, which are generally higher than the national ones. In any case, we would study the specific case to adapt the insurance to what is convenient for your case.

Coverage of major buyers

Are you happy because most of your customer base has an acceptable credit risk but you are worried about an important account?

Can I select only one client for coverage?

Yes, but this may not be the best option. In these cases, the Insurers will apply the highest minimum premium levels. Selecting all business volume or a large group of accounts may be a better option.

I have received denial of subscriber coverage. Can I ask another Insurer to cover the risk?

As long as the coverage is not very high, above € 300,000, change subscriber. You should ask ABK Credit for a review of the coverage to be contrasted.

How much would it cost to cover a single account?

Unlike covering the total volume of business and most other policies, in the case of a single buyer is established a price with the value of the credit limit instead of the insurable turnover. As expected, the price is based on the strength and potential of the buyer and the insured value, which means that the rates will vary from a fraction of the percentage of up to 8% or 9%.

Improvement in credit procedure

Our Subscribers and Consultants design credit procedures according to their casuistry in combination with the insurance policy contracted.

Financial support

Are you looking for alternative financing options and want to maximize the value of your debtors’
account (client account) as a guarantee for a “factoring” or a bank’s current financing?

Having the insurance portfolio 100% secured is a key strategy to improve the financing capacity of the money supply. The factoring and banking companies tend to provide better conditions if the invoices are insured and the beneficiary appears as the financer.

My factoring company has offered me assurance through them about assigned invoices…

Separating your credit insurance provider from your financer grants more flexibility and money savings depending on a series of criteria. you should discuss this topic with one of our subscribers.

Will the credit insurance cover my existing debtors?

Most of the credit insurance policies cover the debt of the dates within the period of the policy created through payment (Fixation risks). At the beginning of a policy, it should be agreed to include the historical debts of those buyers who did not present defaults to the date of commencement of coverage.

For more information: Trade Finance.