Trade Credit Insurance

Because the future is uncertain, we predict trade and credit risks today to protect cash flow tomorrow.

Trade credit insurance – also sometimes called accounts receivable insurance – protects businesses when a customer fails to pay a trade debt. 

This often occurs when a customer becomes insolvent or is unable to pay within the contracted terms (a protracted default). Credit insurance indemnifies a proportion (up to 95%) of the debt owed to you. 

Additionally, Allianz Trade' trade credit insurance provides world-class knowledge and data to empower your trading decisions. This helps businesses that choose trade credit insurance to avoid more bad debts and safely expand sales to new and existing customers.

  • Prevent disruption to cash flow from slow payment, nonpayment, and insolvencies
  • Reduce the risk of key account concentration levels

  • Borrow against insured receivables
  • More capital at reduced rates – take full advantage of A/R reduction in bad debt reserves

  • Expand sales into riskier or new markets with favorable terms
  • Grow with existing accounts and safely offer open terms to new accounts
  • Provide a structure and discipline for credit decision making
  • Fast data-driven credit decisions on customers, prospects, industries, and countries

The premium is calculated for your business and the way you trade. This helps us make sure you receive the best match and service excellence for your business as well as an affordable premium.

If you haven’t used it before, here’s how to work out what it might cost for one of our more popular policy types.  The premium is based on a percentage of your sales, generally below 1%.  Suppose your sales were 2 million last year and you want to cover that entire turnover.  Then the premium would usually be less than 20,000.  

Remember that premiums go up or down from year to year.  They are affected by the losses you have experienced in the past, the customers you deal with and the sector you work in. Covering political risk as well as trade risk costs more. We calculate the best price for your situation so that these factors and your needs are taken into account.

Trade debts can make up 40% or more of business assets. Just a few instances of failure to pay can make a big impact on your cash flow.  The cost to a business of non-payment can be considerable. If you have a 5% profit margin and suffer a 100,000 debt, you’ll need to win sales of 2 million to make up for the lost profits. 

Plus, your financial position can be weakened by bad debts in other ways. For example, your cash flow will be affected and you will have less capacity for investment. Banks and finance providers could charge you higher interest. The morale of your employees may be affected if they become worried about their future in the business. Consider these effects and what they might cost when you think about the value you will gain from trade credit insurance. 

Yes.  Exporters concerned about political events can also benefit by cover for non-payment as a direct result of events in the buyer’s country.  Typical situations can be war or cancellation of a contract by the local government.  Another example is when a government imposes rules that stop goods being exported or imported or when regulations prevent hard currency transfers.

Every business can benefit from good credit management.  Trade credit insurance is one of the most important tools for that purpose.  If you’re selling on open account terms to other businesses then trade credit insurance could bring many benefits.  Even if you trade on other terms we have services that can support and strengthen your trading activity.

We’ve designed a range of trade credit offers for different types of business and transactions.  Please get in touch with us to discuss what would be most suitable for you.

Our insurance is designed for businesses with sales of at least 1 million CAD per year.  If your sales are lower than this, our insurance may not be the most suitable product for you.  We suggest you speak to your insurance broker or business bank manager who will be able to point to other ways you can protect your business.  

Many businesses trade with customers of long standing that seem well funded. They believe payment can be relied on. However, even the strongest commercial concerns can be affected by the economic cycle and commercial trends. 

It takes considerable investment in data collection to keep track of customers’ financial health and to evaluate the risk of non-payment.   We make that investment so you don’t have to and make analysis available to you.  Insurance backed by insight allows you to trade with peace of mind through all phases of the cycle; today and tomorrow.

Yes, we have experience in supporting longer term transactions (for example, multi-year contracts). Get in touch with us and let us know what you need. We’ll be pleased to make recommendations.

There are many benefits to trade credit insurance.  If you have just started with trade credit insurance it can be useful to review your processes and procedures so that you gain the greatest value from your policy.  We can advise you on best practice too.  Here are some examples of what you can do.

  • Train your employees on the use of our systems. Use our information on limits and grades to improve credit control and defend against catastrophic bad-debt losses.  
  • Demonstrate the enhanced quality of your accounts receivable when negotiating with lenders to access better terms.
  • Build our information into your sales planning to target the most financially sound new customers.  
  • When developing strategy and business plans, identify the risks in new markets and opportunity areas with our data.
  • Access our debt collection capabilities and network to accelerate speed of payment.  Aligning your processes with our systems will improve efficiency. 
  • Strengthen your cash flow by insuring invoices so that you are indemnified for non-payment.  
  • Design your financial management and reporting to identify performance improvements.
Small Business Trade Risks
Learn how credit insurance data helps businesses with up to $25 million in annual revenue identify creditworthy customers, protect receivables, and safely grow sales.
Expand your business in domestic or international markets and protect your key financial accounts. Explore solutions for companies with revenue exceeding $25 million.
We build and manage robust, global insurance for credit risk and related services specifically for you, to give your multinational enterprise the confidence to trade in this complex environment.
Clients worldwide
83 Million
Businesses monitored
AA Rating
by Standard & Poor's

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At Allianz Trade we value your time and will try to respond to your enquiry on the same working day. ​Some questions may take a little longer to answer, but we ​aim to provide you with a response within 3 working days.

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