Many property & casualty brokers are not familiar with trade credit insurance. There are a number of reasons for this lack of familiarity – the policy can be a financial decision tied to bank facility, is managed through the finance / credit side of the business, or the policy is viewed as a tool to help facilitate sales. All typically outside of normal property & casualty focus – and for good reason – trade credit insurance tends to be viewed as a financial decision and not just an insurance policy. The core of the policy though protects the insured’s accounts receivable’s against non-payment, which can have a major impact on the financial performance and even viability of the business itself.
Some brokers, recognizing the significance of a potential credit loss, raise the need for credit insurance with their clients. However, more likely it’s the client when having a payment issue with one of their customers reaching out to their broker asking if there is an insurance solution to protect against buyer non-payment. Like most insurance, credit insurance is technical in nature and requires thorough understanding of policy terms and requirements, particularly if the broker is recommending a solution to their client. Many brokers realize these limitations and rely credit insurance experts like Securitas Global Risk Solutions to meet their client’s needs. Ultimately, they want to make sure their clients have the right policy, coverages and client support. They want to know their clients are in good hands and treated with the same level of expertise and care as the rest of the insurance portfolio. This is our focus at Securitas.
Real example of mis-managed credit insurance policy
A number of years ago, a broker contacted us because he was having difficulty settling a credit insurance claim for one of his clients. He was the broker on the credit insurance policy but didn’t understand the terminology or claim filing timelines. He had never reviewed the policy with his client and so his client didn’t fully understand the policy either. This was now a major issue and the client expressed to the broker that the relationship was in jeopardy if the claim wasn’t paid. As much as we wanted to help the broker, his client hadn’t followed the policy and the insurer rightfully denied the claim. The client ultimately fired the broker, costing his firm significant revenue over a relatively small claim and small policy compared to the rest of the P&C policies in place. This situation could have been avoided had the insured understood the policy.
Quick Takeaways on how we serve the broker community:
- We partner with brokers to serve their clients
- Gather all information for the application
- Complete application and submit to appropriate markets for quotes
- Summarize and compare key terms, conditions and coverage limits
- Review all quotes with client
- Make recommendations based on client feedback
- We educate, educate, educate the insured on policy requirements
- We work with insured and underwriters to obtain information to support policy credit limits
- We advocate on insured’s behalf on all policy matters
- We proactively work with insured on all claims and filing requirements
Our policy and service lifecycle starts and ends with client feedback. From the initial conversation to policy implementation, we strive to understand our client’s credit requirements and financials goals. We update our servicing plan and the policy itself based on changes in our clients sales projections and revenues, A/R balances, internal processes and procedures and ultimately credit requirements.
Please feel free to contact us with any questions. We’d love to be a credit insurance resource and help you serve your clients anyway we can.
Since 2004, Securitas Global Risk Solutions, LLC (“Securitas”) has helped clients develop credit and political risk transfer solutions that provide value on numerous levels. As an independent trade credit and political risk insurance brokerage, Securitas is focused on developing comprehensive solutions that meet the needs of clients, ensuring a complete understanding of policy wording and delivering excellent responsive service.
