Evolve To The Changing World

M. Lipsitz's CFO credits the partnership with Allianz Trade in helping the company evolve to meet a changing world.




Create Peace of Mind in an Uncertain Industry

Policy Benefit:

Expansion into new new markets

The metal recycling trade is greatly impacted by uncontrollable factors—such as politics and fluctuating commodity prices—which increase risk. Lipsitz’s partnership with Allianz Trade plays a critical role in mitigating that risk and expanding its customer base.

Nemec, the company's CFO, credits Lipsitz’s partnership with Allianz Trade in helping the company evolve to meet a changing world. “Ten years ago, we had no trade credit insurance, but we did have 100 years’ worth of experience,” says Nemec. “But in the last five to seven years, the world has changed dramatically.”

The company’s initial risk mitigation strategy was conservative, says Nemec. “We would ask for financial information from customers, but we had no systemic procedures,” he says. “If there was no information, the customer had to pay upfront before we would ship their order.” 

“This limited our opportunities,” says Nemec. “Most customers couldn’t or wouldn’t pay upfront before they got the material.” 


Lipsitz’s partnership with Allianz Trade extends beyond risk mitigation. Trade credit insurance has become an integral part of the company’s marketing strategy, allowing it to grow its customer base worldwide.

“We’ve really expanded our sales opportunities with trade credit insurance,” says Nemec. “Before, we were so conservative with who we provided credit to. Now, credit is an integral part of the sale process. We use Allianz Trade to help evaluate the creditworthiness of a potential customer, then decide whether we want to sell to them.”

The partnership is particularly advantageous for new international customers, which are harder for US companies to find information about. Allianz Trade, which has access to a global database of key financial information has helped Lipsitz grow quickly and safely.

“Allianz Trade has allowed us to open some markets that we otherwise would not be involved in,” says Nemec. “Without Allianz Trade, if a customer did not have a rock-solid financial statement or was not publicly held, we would not be able to work with them.”

Trade credit insurance benefits both Lipsitz and its customers, who aren’t always able to pay for orders upfront or don’t have a proven track record. Nemec finds that it’s helpful to think of trade credit insurance as part of the cost of doing business.

“Credit is an asset on the books that we want to protect, just like we protect our building with liability coverage,” says Nemec. “We sell in pounds and tonnage and our insurance becomes part of our cost model, part of our per pound cost.”

Nemec believes that trade credit insurance is particularly advantageous to those in the metals industry, or any industry that deals in commodities. It provides peace of mind when there is certain uncertainty.

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