I guess Trade credit insurance is all about business insurance. Under circumstances that a non-commercial business debt remains unpaid, the seller could be protected in case he has trade credit insurance. It would certainly make sure that either the trader's debtor or credit insurer is gonna pay for the unchallenged a/cs receivable.
It would surely help you to keep your political and commercial risks at bay!
Your balance sheet would project the much needed smoothness thereby ensuring smooth cash flow, proper loan servicing as well as easy repayment of loans.
Posted: Wed Dec 31, 2008 10:30 am Post Subject:
Wish you a Happy New year!
Trade credit insurance is certainly a very important tool in the finance world.
It protects an organization from pretty many risks associated with its commercial dealings as well as the present political scenario.
It enhances the ability of an organization to forward a greater volume of credit to its existing customers. It also enhances its capacity to serve customers with more risks.
Barbwire
Posted: Mon Mar 02, 2009 02:17 pm Post Subject:
Trade credit insurance or credit insurance is an insurance policy and a risk management product offered by private insurance companies and governmental export credit agencies to business entities wishing to protect their balance sheet asset, accounts receivable, from loss due to credit risks such as protracted default, insolvency, bankruptcy, etc. This insurance product, commonly referred to as credit insurance, is a type of property & casualty insurance and should not be confused with such products as credit life or credit disability insurance, which the insured obtains to protect against the risk of loss of income needed to pay debts. Trade Credit Insurance can include a component of political risk insurance which is offered by the same insurers to insure the risk of non-payment by foreign buyers due to currency issues, political unrest, expropriation, etc.
This points to the major role trade credit insurance plays in facilitating international trade. Trade credit is offered by vendors to their customers as an alternative to prepayment or cash on delivery terms, providing time for the customer to generate income from sales to pay for the product or service. This requires the vendor to assume non-payment risk. In a local or domestic situation as well as in an export transaction, the risk increases when laws, customs communications and customer's reputation are not fully understood. In addition to increased risk of non-payment, international trade presents the problem of the time between product shipment and its availability for sale. The account receivable is like a loan and represents capital invested, and often borrowed, by the vendor. But this is not a secure asset until it is paid. If the customer's debt is credit insured the large, risky asset becomes more secure, like an insured building. This asset may then be viewed as collateral by lending institutions and a loan based upon it used to defray the expenses of the transaction and to produce more product. Trade credit insurance is, therefore, a trade finance tool.
Posted: Tue Dec 30, 2008 11:46 am Post Subject:
I guess Trade credit insurance is all about business insurance. Under circumstances that a non-commercial business debt remains unpaid, the seller could be protected in case he has trade credit insurance. It would certainly make sure that either the trader's debtor or credit insurer is gonna pay for the unchallenged a/cs receivable.
It would surely help you to keep your political and commercial risks at bay!
Your balance sheet would project the much needed smoothness thereby ensuring smooth cash flow, proper loan servicing as well as easy repayment of loans.
Posted: Wed Dec 31, 2008 10:30 am Post Subject:
Wish you a Happy New year!
Trade credit insurance is certainly a very important tool in the finance world.
It protects an organization from pretty many risks associated with its commercial dealings as well as the present political scenario.
It enhances the ability of an organization to forward a greater volume of credit to its existing customers. It also enhances its capacity to serve customers with more risks.
Barbwire
Posted: Mon Mar 02, 2009 02:17 pm Post Subject:
Trade credit insurance or credit insurance is an insurance policy and a risk management product offered by private insurance companies and governmental export credit agencies to business entities wishing to protect their balance sheet asset, accounts receivable, from loss due to credit risks such as protracted default, insolvency, bankruptcy, etc. This insurance product, commonly referred to as credit insurance, is a type of property & casualty insurance and should not be confused with such products as credit life or credit disability insurance, which the insured obtains to protect against the risk of loss of income needed to pay debts. Trade Credit Insurance can include a component of political risk insurance which is offered by the same insurers to insure the risk of non-payment by foreign buyers due to currency issues, political unrest, expropriation, etc.
This points to the major role trade credit insurance plays in facilitating international trade. Trade credit is offered by vendors to their customers as an alternative to prepayment or cash on delivery terms, providing time for the customer to generate income from sales to pay for the product or service. This requires the vendor to assume non-payment risk. In a local or domestic situation as well as in an export transaction, the risk increases when laws, customs communications and customer's reputation are not fully understood. In addition to increased risk of non-payment, international trade presents the problem of the time between product shipment and its availability for sale. The account receivable is like a loan and represents capital invested, and often borrowed, by the vendor. But this is not a secure asset until it is paid. If the customer's debt is credit insured the large, risky asset becomes more secure, like an insured building. This asset may then be viewed as collateral by lending institutions and a loan based upon it used to defray the expenses of the transaction and to produce more product. Trade credit insurance is, therefore, a trade finance tool.
Add your comment