Now is the time for companies to actively seek out opportunities to trade overseas secure in the knowledge they have the right Trade Credit Insurance to protect them, delivered by a knowledgeable and respected local expert; one who is part of a prestigious, experienced and highly regarded membership organization.
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Our client is one of the world’s largest manufacturers of formwork and scaffolding. The parent plant and headquarters are based in Germany and they have 70+ subsidiaries and 140+ logistics centres operating globally. The company employs over 8,700 employees and generates revenue of nearly € 1.5 Bn.
As a facilitator of products in the construction sector, they must follow strict Credit Risk Management guidelines. These take into consideration that the business implicates a larger scale and volume of bad debts. Neither Trade Credit Insurance nor accounts receivable financing has ever been an integrated part of Credit Risk Management – based on the assumption that this business will never qualify to be “insurable” and “eligible” for a factoring company.
ICBA Germany facilitated comprehensive research project on the accounts receivable data of the various subsidiaries. We concluded with the Group Management that we would work on an accounts receivable financing programme for five of the larger entities, using Trade Credit Insurance for enhancing the asset for a bank.
We managed a market tender process for the account receivable financing part of the project on the one hand, with Trade Credit Insurance suppliers on the other hand, with a high extent of customized wording requests, covering the client’s business model.
More than twelve months after this project commenced and, after finalizing road shows in five countries (with many discussions with the auditors to enable an off-balance sheet treatment), The client’s Group Management decided to implement the programme with Euler Hermes World Agency as risk carrier and Postbank Factoring (daughter of Deutsche Bank) as financing Partner. Local implementation is in Germany, Poland, UK, US and Canada.
The Policy wording is customized to the maximum extent and our client is now aiming to grow the programme in respect of Trade Credit Insurance in additional countries. This is based on the fact that the risk underwriting expertise of Euler Hermes significantly improved the client’s evaluation of default risk with the buyers which enables financing. It is also based on the fact that the local P&L is protected by alerting any deterioration of default risk and by detecting bad buyers in the sales’ process.
Our client’s management have told us they would never have been able to implement the programme, without the ICBA on their side.
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Read moreThe ICBA is best known for our Partners’ expertise, experience and forging local Underwriter relationships in Trade Credit Insurance. But there are other complementary services our Partners provide too. These are services that enable businesses to grow and to export, secure in the knowledge that all bases have been covered.
Your ICBA Broker team will work alongside you to provide a strategic range of tailored solutions. Trade Credit Insurance is changing and today’s Broker must be able to work closely in harmony with Underwriters.
The need for increased credit limits on key customers is becoming a challenge and it is not uncommon for Brokers to work with several Underwriters to provide much higher credit limits and claim payment certainty that will fully support a client’s expansion.
Many ICBA Broker Partners use the most technologically driven and effective Compliance Risk Software to monitor their Policies.
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