Credit assessment teams: gathering intelligence that empowers your business

Having a clear picture of the financial health of your close trading partners is a business fundamental. And in today’s uncertain economic conditions, gaining that understanding is more important – and more challenging – than ever.

Whether your client is a local specialist or a multinational, our credit assessment experts draw on an unrivalled set of information sources, C-suite engagements and advanced technologies to analyze and set accurate credit levels for the companies you work with – enabling you to trade with them with confidence.

To showcase our comprehensive approach, we asked Joseph Mocachen, Group Head of Information, and Dustin Schulman, Assistant Vice President, Credit Analyst and Sensitive Risk Manager for  Allianz Trade in North America, to outline how their different but complementary roles support your business with actionable insights.

“The fuel for any expert credit assessment is the right information. As Group Head of Information, my primary role is to make sure that we have the best available business data on companies worldwide. We provide as much recent and accurate information as possible, and on the highest possible number of companies, to ensure our creditworthiness assessment will be the best. This data is made available to our credit analysts and also feeds our artificial intelligence credit assessment models. The more data we have on companies, and the better its quality and sophistication, the more credit we will be able extend to customers. To achieve that, we source data ourselves through our credit analysts on the field and we work closely with information providers too,” Joseph outlines.

“We go to great length to ensure we can source data that is difficult to find – that others do not have – as it may allow us to extend credit on a specific company. We source financial results, balance sheets, management information, governance, credit ratingsscorings, payment records and insurance claims histories… and we go beyond that. They key is proximity to the companies we assess. Each market is different so information availability will be very different from one country to the other. It is crucial for us to have a tailor-made approach so that we can make a difference in the information we have on companies in each country. We always go beyond the standard information sources to find additional valuable information,” Joseph explains.

Our comprehensive company database is unique in the world by the number of companies tracked – more than 85 million companies – and by the quantity and quality of information we gather on each company. This information is processed and analyzed using first-class credit assessment models. We always strive to stay at the top of the highest performing modelling and scoring techniques, taking into account the technological advances. Our portfolio of models is built and maintained by a team of actuaries, credit analysts, statisticians and data scientists. It combines logistic regression, fuzzy-logic and machine-learning technologies to generate a cutting-edge grading that represents the probability of a company defaulting in the short term. We use all the technological tools and modelling techniques at our disposal to build the best, most predictive models.

“Our expert credit assessment capabilities involve both artificial intelligence models and expert credit analysts who have a deep understanding of the company, all supported by the best data. That combination leads to the right decisions by our risk underwriting teams  on setting credit limits,” says Joseph. “And, ultimately, it allows us to deliver tailor-made trade credit insurance  solutions for our customers that best fit their needs.”

But casting the information net wide and applying cutting-edge technology to generate the most accurate credit ratings scorings is just one part of the assessment process. Our credit analysts on the ground play a key role of our credit assessment by investigating and analyzing locally.

“Credit analysts are a lot like business reporters,” says Dustin. “We gather intelligence and perform detailed analysis on companies that our customers do business with. That allows us to determine their creditworthiness based on their strategy, their financials, the sector they operate in and a whole variety of factors. This work is the foundation for the core service that we provide as a business: by assessing the risk thoroughly, we can make the best decisions on credit limits and therefore deliver a service that best protects and supports our customers’ activities.”

A key characteristic of the credit analyst’s job is their work is primarily with your clients. “Like a business reporter, it means interviewing companies, diving into their operations, strategy and finances, pulling together information from the best available sources on that company, doing lots of interviews, asking the right questions and then delivering an independent robust assessment. So you have to be curious and like intellectual challenges, questioning what we are told and forming our own judgment,” Dustin explains.

First and foremost, this means cooperating with the companies being assessed and establishing a dialogue with their senior finance executives – often the best way to get access to prime information. But that challenge varies. “One day you could be dealing with a company that’s publicly traded and whose finances are completely transparent; the next day a private, family-run business that is not required to publicly disclose any of their numbers. But, if we are going to serve our customers’ interests, we still have to credit risk they might be exposed to,” says Dustin.

Gaining the desired confidence with companies under assessment is natural because getting financing through payment terms  is key. By cooperating, they are able to establish the best credit scoring rating from us, which allows them to be a trusted commercial partner to you, their suppliers.

Given the scope of the challenge, the skillset that credit analysts need to bring to the role is highly strategic. “Our credit analysts need to get under the skin of CFOs and understand whether companies are pursuing the right strategy. They are experts in analyzing companies in their territory and actively monitor the dynamics of the country or region they’re covering for developments that might impact risk decisions. It is key they understand the culture and business environment of the companies they are assessing,” says Dustin.

“That focus of analysts on local markets is a key differentiator for Allianz Trade,” he says. Our teams are also very close to our customers’ clients. On average globally, we meet them more than 600,000 times a year!

Along with analytical expertise, the role also requires strong communication and people skills. “The ability to win the trust of executives at the company you’re assessing is critical because you’re often asking them to share proprietary, company-confidential information,” says Dustin.

On the data sourcing and models side, there is a slightly different but complementary set of competencies. “My team’s skills are in data management, analysis and a deep knowledge of data sources. They know the fast-evolving data market and keep pace with its trade and evolutions, with the type of data being opened or how to connect to providers,” says Joseph. “For credit data modelling, the expertise also spans statistics, machine learning, data science, and all the elements needed to build world-class data models.”

Ensuring access to the most accurate sources of information and the best models for analysis and decision-making also demands some cross-functional capabilities. “When it comes to data sourcing, a key challenge is to ensure we meet business needs and technical possibilities. So, there is an arbitration element to the role that requires negotiation skills and a positive attitude to problem-solving,” says Joseph.

That commitment to comprehensive coverage, cooperation and innovation ripples through our whole operation, from the starting point of credit analysis to policy renewal. “The better the credit assessment, the greater our understanding of risk. The higher the number of credit limit requests we can accept, the more we support customers and help them grow ,” says Joseph.