Credit insurance brings certainty to this uncertain world
Following the Brexit vote, uncertainty is the only thing we can be certain of. No one seems to know what is going to happen and everyone has questions. What are the trade deals going to be? What direction will the FTSE go tomorrow? Will the pound get weaker? What will happen when interest rates are dropped? What direction will house prices go? Who will be the next Prime Minister? The list goes on…
Problems in business
In business there are many obstacles that are faced, one being winning the business in the first place but it doesn't stop there. You also have to make sure the client pays for the good or services provided, so even after winning the business things could go wrong.
- Example 1: You run a modest clothes supplier and win a huge deal with a massive retailer. You offer them the terms they require and then 4 weeks later they file for administration.
- Example 2: One of your longest standing clients always pays on time, but this month the money doesn't arrive. You think nothing of it as they are a good client and there is perhaps a slight delay but nothing to worry about. They then file for administration.
- Example 3: A new client you know nothing about says that want to place a huge order. Should you take it…of course it'll make you a fortune. Then they disappear off the face of the earth.
The solution is credit insurance.
Solutions not Problems
At CMR we are all about providing solutions to problems. If a client isn't paying you, we will commence with recovery action and with a current success rate of over 80% this year it is likely we will succeed. If that fails the managed credit insurance policy we provide will pay out a claim of up to 90% of the money owed. We believe in solutions to problems.Â
- Solution 1: Credit insurance cover protects you against the risk of a company filing for administration. A claim payment will be made once claims documents have been provided to the credit insurer. Even large companies fail!
- Solution 2: Some companies don't feel the need to insure long standing clients as they have always paid. It is quite often the unexpected debt that can cripple a company. Credit insurance would cover the risk of any client not paying, so rather than just insuring the one you see as a bit risky, it is best to invest in a full turnover credit insurance policy.
- Solution 3: As credit insurers have up to date financial information on companies they quite often find out about fraudulent cases. The knowledge of the credit insurance underwriters will give you the best insight so you can decide whether to deal with a new client. A deal is only worthwhile if you actually receive the money.
What's stopping you?
Credit insurance is a relatively low cost insurance to protect one of the largest assets of a company, their debtors. Some companies don't appreciate the value of credit insurance but often it pays for itself in one claim. Credit insurance improves your credit control as you need to notify the credit insurer if a payment is late, which keeps you on top of the slack payers and ultimately improves your cash flow.
If you would be keen to discuss the credit insurance solutions we can offer, whether that is an export credit insurance policy, a domestic credit insurance policy or a combination of the two, please request a call back. Or if you now understand the importance of credit insurance, please complete our Quick Quote.