TRADE CREDIT INSURANCE Our job is protection of Your business… Trade Credit
What is trade credit? Trade credit is goods delivery, providing services or handling a customer’s production order by one company (supplier) to another company (customer/buyer) without advanced or immediate payment upon goods receipt Accounts receivable (A/R) NB! accounts receivable often exceed 30% of all company’s assets •
What is credit insurance? Trade credit insurance is a security tool protecting your business against losses resulting from non-payment of outstanding debts by customers allowing to start making payments at some specified time in the future (deferred payment) Reasons for Non-payment / Insured Perils: long-standing history of late payments • customer’s insolvency (bankruptcy) • political risks (as an additional option for export operations) • NB! about 80% of suppliers deal with late payment problems •
What are the benefits of credit insurance? Increasing control over accounts receivable • professional evaluation of debtors’ creditworthiness Entering new markets and boosting sales • deferred payment is a strong competitive advantage Maintaining liquidity • avoiding cash deficiency risk and strengthening the current account balance NB! After filing for a bankruptcy petition in the Unified State Register you will have 30 days to report your claims •
What are the benefits of credit insurance? • Additional information on buyers The opportunity to monitor not only current buyers, but also to evaluate potential buyers, including foreign counter agents • Reduction in debt management costs decrease in the reserve amount for accounts receivable and bad debts • Alternative to bank instruments cost-saving method compared to bank guarantee, letter of credit, factoring NB! in December 2013, the city of Detroit filed for bankruptcy with 18 billion $ debt •
How does it work? Insurance Coverage Model
Insurance coverage options • whole turnover All contractors are covered with deferred payments • top account Key buyers are covered (accounting for 70-80% of sales) • excess of loss Significant aggregate deductible NB! when bankruptcy in Ukraine 8.6c. of 1USD debt is paid back vs 37.7c. in Asia and 71.9c. in Europe/USA •
Characteristics of insurance coverage • Domestic and international shipment insurance • Whole turnover or its portion coverage with deferred payment покрытие • Commercial and political risks coverage • Maximum credit limit is up to 135M UAH • Maximum deferred payment period is up to 90 days • Waiting period is standard 180 days • Guaranteed payment is up to 85% of the debt amount • Retroactive coverage option NB! statistically, large bankruptcies occur more often than natural disasters •
Business Solutions – is the first insurance broker in Ukraine specializing in Credit Insurance • Organizing communication with the Credit Insurer • Studying all the possibilities how to build the insurance protection • Collecting information about your counterparties • Providing consultations during the loss settlement procedure • Analyzing your current trade credits insurance programs for free and giving recommendations on the possible improvements NB! in 2017, accounts receivable of Ukrainian companies amounted to 3.5 trillion UAH •
Insurance company INGO Ukraine – reliable insurance partner • 23 years on the insurance market • UAH 616,4 M is the actual cash reserves as of 31.12.2017, that is +275% excess of performance indicators • 93,5 % a share reinsured in companies with А- (S&P and A.M.Best) or higher rating under effective obligatory package reinsurance programs • 295 834 agreements concluded, in 2017
Business Solutions We help business to make balanced decisions! Your trade credit insurance manager Zhuliy Yaroslav mobile +38 073 722 8776 e-mail: credit@bs.in.ua Trade Credit
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