SLIDE 1
CREDIT INSURANCE
- What is it?
- Why do companies buy it?
- How is it structured?
- What does it cost?
CREDIT INSURANCE What is it? Why do companies buy it? How is it - - PowerPoint PPT Presentation
CREDIT INSURANCE What is it? Why do companies buy it? How is it - - PowerPoint PPT Presentation
CREDIT INSURANCE What is it? Why do companies buy it? How is it structured? What does it cost? WHAT IS CREDIT INSURANCE? An insurance policy that guarantees your receivables Originated and commonly used in Europe Covers
SLIDE 2
SLIDE 3
WHAT IS CREDIT INSURANCE?
- An insurance policy that guarantees your
receivables
- Originated and commonly used in Europe
- Covers bankruptcies (formal or non-
formal)
- Covers slow pay, no pay, general non-
payment
SLIDE 4
REASONS COMPANIES BUY
- Sales Growth
- Support Credit Function
- Catastrophic Risk
- Bank Financing
- Reduce bad debt reserves and forecast losses
- Get bigger limits from suppliers
SLIDE 5
EXAMPLES
- Take away tool
- Out of town contractors
- Highway construction – needed higher
limit from his supplier
- Hurricane clean up crews
- Make credit managers’ time more valuable
- Emergency services
SLIDE 6
HOW IS CREDIT INSURANCE STRUCTURED?
- Full Portfolio
- Partial Portfolio
- Single Account
- Business Segments
- Multi-term
SLIDE 7
WHAT DOES IT COST?
- Typical policy ranges less than 1/3 of a
penny per gallon or 1% of exposure
- Can be paid upfront or quarterly
- 1 truckload of 20,000 gallons = $60
- 100,000 gallons = $300
SLIDE 8
SUMMARY
- Grow sales
- Ease sales-credit tensions
- Support your credit department
- Avoid catastrophic and general losses
- Reduce bad debt reserves and forecast losses
- Borrow better
SLIDE 9