Credit Protection Insurance
Rigby Financial has teamed up with Euler Hermes as our sole provider of Credit Protection Insurance. Euler Hermes is part of the Allianz Group and is the world leader in this area.
A bad debt can have a detrimental effect not only on cash flow but also on the ability of a business to continue to trade, therefore it is vital your company has a Credit Protection policy. Below are some bad debt facts and the reasons why having credit protection cover for your firm, be it a large or small business, is essential to protecting your long-term future.
Bad Debt Facts:
• If one of your customers goes into liquidation 76% of the time you will receive nothing.
• If you are lucky enough to receive anything it averages only around 7.5p in the £.
• Over 50% of all UK insolvencies involve established, prompt paying customers.
• Each year the average company will lose 3 of its active customers due to insolvency.
• Businesses who have Credit Protection Insurance have been proven to be more profitable than those without it.
(Source: Credit Management Research Centre)
Credit Protection Insurance Benefits
Improved Cash Flow
Having a credit protection insurance in place for your business can assist you in the collection of your business’ overdue accounts and therefore improve the speed and success with which you collect money owed to your business. Furthermore, should the worst happen and one of your buyers becomes insolvent, your policy with us will provide a prompt settlement of your claim, safeguarding your cash flow to ensure that you do not lose out on any owed money.
Focused Sales Effort for Business Growth
As Euler Hermes are part of the world’s leading credit insurance group, they monitor over 40 million buyers. Through their credit limits and opinions service, clients can take advantage of their trade sector, country, and buyer knowledge when purchasing a credit protection policy. If you decide to trade on the basis of their credit limit decision and your buyer refuses to pay or becomes insolvent you will be entitled to make a claim on your credit insurance policy.
Help in Securing Trade Finance
Banks and trade financiers are often more willing to provide trade finance or may be prepared to offer more favourable lending terms to businesses with a credit protection insurance policy.
Euler Hermes unique proprietary information obtained by visiting companies and received through their clients, coupled with their detailed knowledge of businesses and trade sectors enables their Risk Analysts to set appropriate credit limits. By following their advice, clients can review existing trading relationships and so reduce their exposure to potential bad debt.
Enhanced Trading Relationships
You may be able to negotiate more favourable terms with your suppliers since they know the business they are trading with has taken steps to protect its assets and balance sheet by acquiring a credit insurance cover.
Credit Management Discipline
Using their credit protection insurance policy enables clients to reassess their internal credit management procedures. Banks and trade financiers often take the existence of a credit insurance policy from Euler Hermes as an indicator that the business takes a serious and structured approach to its credit control procedures.
Peace of mind through risk transfer Credit insurance is a simple way to protect your business against the effects of bad debt. Policyholders have the reassurance of knowing that if one of the buyers covered under their policy can’t or won’t pay, then in accordance with the policy Euler Hermes will.
If you would like to discuss this area of cover or get a quotation please contact the office on 01744 886077.