Business development and safe growth go hand-in-hand. Trade credit insurance is one way to safely grow

22 November 2021
Business development and safe growth go hand-in-hand with business management. As the leader of your organization, you must continuously balance the cost of doing business with the risk of doing business.

Taking calculated risks to protect your organization from catastrophic losses isn’t always an easy task, and if there is anything the economic crisis caused by the COVID-19 pandemic has taught us, is that the world and the way we do business can shift overnight. As a result, and in the face of today’s changing domestic and global economic climate, recognizing and managing future risks has become a priority for business leaders.

In the spring of 2020, we had our second-annual Risky Business survey during the global health crisis that sent shockwaves throughout the world. We collected responses from 250 North American CFOs and their direct reports to learn about their attitudes toward risk during a major crisis and gauge their concerns related to the impact of COVID-19.

CFOs faced elevated levels of concern even before COVID-19, the top two being achieving growth and cash predictability. In the wake of the crisis, 93% of respondents stated their organization had been impacted and reported their top concern to be workplace safety in the short and long-term, while achieving growth remained a top concern in the long-term.

An eye-opening finding of the survey was that though 94% of respondents predicted their company would change their overall risk strategy in preparation for future crises, 66% of respondents said they only felt somewhat up-to-date on current tools for risk management, while 3% did not feel up-to-date at all.
This indicates a need to revisit risk management solutions and prioritize those that can also act as growth engines. Trade credit insurance is a prime example of how to safely grow your business.

This indicates a need to revisit risk management solutions and prioritize those that can also act as growth engines. Trade credit insurance is a prime example of how to safely grow your business.
Many professionals realize that a trade credit insurance policy is an effective tool for addressing economic, political, and nonpayment concerns. However, more and more company leaders are also discovering that trade credit insurance is a transformative business intelligence solution—both in terms of establishing more data-driven customer credit processes and enabling sales growth.

Trade credit insurance provides a business risk strategy framework for you and your teams to leverage. With the right trade credit insurance solution, you empower your teams to confidently grow sales without credit concerns.

With Allianz Trade, for example, our experts analyze propriety risk data from 85 million+ companies worldwide to deliver timely predictive insights to your business when faced with sensitive customer credit decisions. The ability to trade on safe, reliable and open terms often becomes a competitive advantage.
At the onset of your trade credit insurance policy, your most significant clients will be analyzed individually and each assigned a credit limit for coverage.

In most cases, your smaller client accounts will be covered under a blanket, or self-underwritten type of cover, known as a discretionary credit limit. This means that Allianz Trade does not need to individually analyze the companies that fall under that blanket. Your credit team will be able to approve credit for those clients while remaining aware of any risk warning signs they present.

In both cases, if a client should become unable to pay, and that event was not foreseeable, your company will benefit from our indemnification services up to the predetermined amount established within the policy parameters and qualified by our credit professionals.

Throughout the life of your trade credit insurance policy, you may request additional coverage on existing or new clients you would like to extend credit, knowing that we will conduct our due diligence and provide you with the best decision for your business.
Your credit management team:

The ultimate goal of credit insurance is not simply to indemnify losses incurred from a payment default, but to provide businesses like yours with the support and knowledge they need to avoid them from the start.

Your credit department’s insights about the relationships you have with your clients and the knowledge of your company’s credit strategy remain important. A credit insurance policy is not a substitute for prudent, thoughtful credit management. On the contrary, sound credit management practices are the foundation of any credit insurance policy and partnership. A policy will not replace your company’s credit practices, but rather supplement and enhance the job of your credit team, providing them with a set of risk management tools and allowing them to make data-driven credit decisions about your clients.

By signing up for a trade credit insurance policy, your credit management team will benefit from thousands of credit risk professionals at Allianz Trade that essentially become an extension of your team.
Our team of  risk analysts is responsible for monitoring portfolios of various companies in a wide range of industries, as well as reviewing and grading industry sectors quarterly. It is this team’s responsibility to proactively research, evaluate and monitor information about your clients to ensure their continued creditworthiness and to assess the risk they present.

They do this by gathering data from a variety of sources, including visits to the buyer, public records, receipt of financial statements, the information supplied by other policyholders that sell to the same company, etc.

Risk analysts follow industry trends and keep buyer information updated. They continuously assess the risk of their portfolio, in particular the most sensitive risk. The analysis of this information allows companies like yours to make informed decisions about how much credit to extend to customers. More importantly, it enables you to avoid losses through the close monitoring of your customers.
The type and amount of information our risk analysts collect on your clients play a crucial role in monitoring your clients’ risk of payment default since credit limits are assigned based on the data available.

Risk underwriters assess your clients’ risk, render credit decisions through credit limits, and provide you and your teams with peace of mind.

This team ensures your requests are treated promptly and works closely with our credit analysts to ensure the decision we provide you is the best one for your business. Risk underwriters are responsible for communicating our credit limit decisions with your teams and are available to speak with you directly should you need assistance understanding our decisions or want to dig a little deeper.
Allianz Trade is the global leader in trade credit insurance with offices in 52 countries, providing coverage to 66,000 clients around the world. We have 5,800 employees and insure over $1 trillion in US sales worldwide.

Our international risk teams and database monitor over 85 million companies, and as a Allianz Trade customer, you benefit from that proprietary intelligence. The advantages of having offices globally is that our risk teams are closer to their local risk. As experts, they understand their local businesses, sectors, and political and financial situations more than anyone, thus having a more accurate pulse on the risk buyers present. This is an advantage for exporter clients or for businesses looking to expand into international markets.
The ultimate goal of credit insurance is not simply to indemnify losses incurred from payment default, but to provide businesses like yours with the support and knowledge they need to avoid them from the start.

If an unforeseeable loss should occur, the indemnification aspect of the trade credit insurance policy comes into play. In these cases, you would file a claim with supporting documentation, and we would pay you the claim benefit.
Our online policy management information service was developed to help our clients easily manage and administer their Allianz Trade policy. Our platform empowers you and your teams with instant, secure online access to policy information, including the ability to obtain coverage decisions in real-time. Through our portal, you can access your current policy coverage and decisions report, request a credit limit and monitor its status in real-time, file a claim, report past due buyers, view the status of filed claims, and more.

Additionally, our customer experience team is available to answer questions and assist with concerns our clients may have. They facilitate communication with other departments within the company and strive to provide positive experiences for all our customers.

Unlike other types of business insurance, once you purchase trade credit insurance, the policy does not get filed away until next year’s renewal. Instead, the new policy marks the beginning of a dynamic relationship between your credit department and our teams of local and global risk experts.

Finding opportunities to improve credit management efficiency while navigating risk is crucial for business leaders. This is driven by increasing sources of disruption as well as growing pressure to expand sales with existing customers, explore new markets, and attract less familiar prospects. Trade credit insurance helps deliver a competitive advantage. It allows you to increase market share, boost market penetration, and expand into new markets without credit concerns.

Contact us today to talk with a risk expert to discuss if your business might be a good fit for trade credit insurance.