Allianz Trade Japan launches tailor-made medium term credit solution – A first in Asia

Japan, 27 May 2021 – Allianz Trade Japan has launched a new medium term trade credit insurance product aimed at supporting Japanese businesses by offering a quick off-the-shelf solution for credit protection.

The new product, “Cover One”, provides one solution to cover credit on one buyer for one contract committed for up to 36 months, contrary to standard trade credit insurance policies which usually cover short payment terms of up to a year.

The private credit insurance market in Japan typically offers standard trade credit up to 12 months for companies trading in goods and services.  There are also, complex structured credit solutions for large long-terms projects.  However, for sectors and businesses that are looking for a quick and easy solution using standard wording to secure credit cover up to three years, machinery/capital equipment manufacturers or infrastructure projects for example, have no real options in the private insurance market today.  

“Cover One” not only covers the cost of goods already supplied but also work in progress costs in case there is a payment default before the project is finished.  It is particularly useful for the machinery manufacturing sector as they often have only one contract with a buyer and it takes much longer from the date they receive the order until the project is completed and they are eventually paid.  

Allianz Trade already offers a similar product in selected European markets, especially in Germany.  And since Japan has a high concentration of machinery manufacturers, it is for this reason that it will be the first country in Asia where this product will be available.  

Holger Schaefer, Regional CEO of Allianz Trade Asia Pacific, says, “The timing of the launch is perfect.  Economies around the world, Japan included, are looking to invest in the post-pandemic recovery and local supply chains.  This will mean increased capital investment and greater demand across all sectors, particularly for manufactured machinery and equipment.  Against a backdrop of weaker balance sheets and political tensions, all businesses should secure themselves against the risk of non-payment from a new customer and political risk where export is involved.”  

Dirk Kotzé, CEO of Allianz Trade Japan, says, “Higher demand means that more quotations will be required.  All businesses therefore need quick and easy answers on whether they are safe to commit to a potential new contract.  We are confident that the private sector solution offered by ‘Cover One’ can help Japanese businesses reap the benefit of the current market opportunities while protecting themselves from non-payment.”