Your trade credit insurer will require that you maintain sound credit and collection policies and practices that comply with the insurance company's rules for approvals, monitoring credit lines, reporting collections problems, and timely filing of claims. With our Carixa cloud credit insurance and policy management software, we help navigate and manage this process, as shown below.
Credit Insurance Administration
Insuer APIs for limits
Workflow for approvals
Monitoring limits
Policy stops
Reporting to insurer
Policy Compliance
Reporting
Proactive Collections Workflows
Monitoring - Early Intervention
Automated Collections
Policy Compliance
Reporting
Forwarding to legal or insurer
Claims Processing
A/R Management
Invoice Collection
Deduction Management
Cash Application
Proofs of Delivery
Sales Tax Certs
Reporting
What is Credit Insurance and How it Can Be Part of Your Risk Mitigation Strategy?
We believe you should use all the tools available to you in order to protect your company's accounts receivable. Depending on your circumstances you may also wish to consider trade credit insurance. If you want to increase international business or protect against domestic credit risks, Trade Credit Insurance can be a part of your growth and risk protection strategy. You will find that different insurers have differing "appetites" for risks in certain industries, or for certain debtors. In the meantime, here is some general information on this subject.
A typical credit insurance program is called "whole-turnover", requiring that you insure all of your receivables, not just the bad credits, and you will pay a percentage - often less than 1% - of all of your trade revenues. The insurance company will require that you maintain effective credit procedures and controls and work within their sometimes complex policy rules. Because of the slim margins in the credit insurance business, credit lines on problem buyers will be restricted.
Accounts Receivable "Puts" as an Alternative to Trade Credit Insurance for Single or Distressed Customer Credit Protection
A/R Puts can provide credit protection to cover your large credit risks with public companies, or large private companies if they have publicly traded debt, often even if they are already having financial problems or possible bankruptcy. This protection can cover amounts from $500,000 up to $100 Million, for up to five years. The Accounts Receivable Put is an alternative to credit insurance and factoring. It provides the ability to "put" unsecured trade claims to an institutional buyer, generally a large Wall Street investment bank, in the event of a customer bankruptcy or liquidation. The Receivable Put can be customized to meet a client's unique needs, including the length of the term.
Political Risks Insurance
Political Risks Insurance covers emerging market exposures and can protect from losses due to arbitrary governmental actions or sovereign defaults. Coverage can include currency non-convertibility, expropriation, political violence, and more. Whether you are a manufacturer, trader, lender, or equity investor, your coverage can be tailored to meet your specific needs.
Insurance Brokers
Specialized, licensed credit insurance brokers can guide you through the process, comparing the market, reviewing, and advising on the agreement, and even help you administer the credit insurance policy. We can put you in touch with specialists who can help you with this.
