Each company’s decision to use credit insurance is based on their specific needs. There are however, three universal ways a policy adds value to everyone’s largest asset: their client portfolio.
Prevention of Bad Debts
An often overlooked value of credit insurance is its ability to prevent a payment problem before it happens. How does it do this?
Through your policy, you have access to these Coface resources:
- Largest footprint versus global competitors
- Coface operates directly or indirectly in 100 countries and offers cover in over 200 countries
- Business Information on 80 million companies worldwide
- Constant review and scoring of 2.5 million debtors worldwide
As a result, we analyze and monitor your client’s financial strength and payment capacity. This lets you increase sales with enhanced information about your customers and avoid problems before they happen.
Of all the benefits that come from credit insurance, this is the most often overlooked. It is also potentially the most important. Making informed credit decisions and being aware of your customer’s financial situation is perhaps the most important kind of business intelligence.
If you knew before-hand that a customer was losing money, not paying other suppliers or being impacted by a declining market situation, would you continue to do business with them in the same way. What resources would you need to have in order to gather this market intelligence? What would it cost to gather, analyze and monitor? This infrastructure is part of your credit insurance policy.
Debt Collection
Any time an insured account is seriously past due, Coface manages the debt collection through our claims process. This helps recover money that may not have been paid otherwise.
If you have uninsured accounts, we can still help through our affiliated company, one of the largest a/r management and collection companies in the US.
Indemnification
If we’re unable to collect unpaid debt, we reimburse you through the claims process. Paying claims is the most obvious benefit of having a credit insurance policy. Be aware however, that our mutual goal is to avoid the problem first, recover unpaid money second and pay claims if these measures don’t work.
Remember that there are two conditions that are covered.
- Customer insolvency (up 28% in the last year)
- Slow pay. Think of us as a collection service that guarantees your money in 60 days.
Final Thoughts
Having a Coface credit insurance policy helps your company in ways that go beyond simply having a claim paid when a customer defaults. Please contact me to talk about how we can best partner with you to take full advantage so you can increase sales and profits with reduced risk.
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