With globalization, companies are seeing new opportunities and new markets are emerging. But when it comes to commercial relations, unforeseen events can quickly have serious consequences for a transaction that seemed a priori safe.

Late payment or bankruptcy of the customer and put the company in a dangerous situation and sometimes insolvency. So, what are your possibilities for securing your sales?

Credit insurance: what is it?


This is a particular assurance that aims, in a context of globalization and international market, to protect companies and banks against the default of payment of borrowers or customers occurred either for reasons of customers or for political reasons or following natural disasters.

If credit insurance has existed since the end of the 19th century, it was in the 1990s that it experienced a major movement of concentration with the emergence of the three giants of the sector, which are Euler Hermes, Atradius and Coface and who hold 80% of the world market together.

In addition to these private insurance systems, most states also have public credit insurance systems. In France, for example, the government set up the CAP – public credit insurance supplement – to distribute risks between credit insurers and the state. Thus, the Coface group, in partnership with the French State, offers public guarantees intended to protect the capital of companies and protect them from the default of their client.

How it works ?


Let’s take an example. You are a business – no matter how small (small, medium or multinational), and you have managed to negotiate a very important contract for you, especially in the current economic climate. You deliver the goods or provide the requested service on time but an unexpected happens and your customer and unable to pay: no payment for temporary reason or bankruptcy, you risk in any case to find yourself in a situation of insolvency.

Faced with such a situation, credit insurance insures you a full recovery of your unpaid invoices and compensates up to 90% of the secured claim. And this, no matter the situation of your company. Also, thanks to their network of experts scattered throughout the world and present on all continents, credit insurers offer specialized monitoring depending on the market on which you want to implement, but also according to the needs of your company.

Lastly, their partnerships with private companies and international public institutes around the world allow them to offer you an expertise and to inform you about the evolution of the financial situation of your customers in order to allow you to anticipate at best a possible default or other risk related to trade.

Who can subscribe?


Credit insurance mainly concerns business to business companies but is not limited to multi-nationals. Small and medium-sized enterprises are also eligible for this type of insurance, and insurers often even prefer support for this type of business.

Investors who, in the event of political problems, can not repatriate money placed abroad are also covered by credit insurance.

Banks, being sources of financing for buyers and suppliers, can also use this type of offer to ask them to participate in the risk of non-payment.

Finally, taking out credit insurance is a plus when you want to get credit. Indeed, the insurer vouches for you, and makes your company a safe company, whose capital is secure and protected.

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