1. Trade Credit Insurance and consumer credit
A different business model
Robert Nijhout – Executive Director ICISA

2. ICISA members

3. Credit Insurance is not a Financial Guarantee!
Conditional
Direct link with delivery of goods or services

4. Reasons for non-payment
The buyer is insolvent, i.e. declared bankrupt or allowed to defer payments following a court or similar decision
The buyer has absconded, which amounts to a type of fraud
The buyer is able to pay but cannot pay due to currency restrictions or a steep devaluation
The goods never arrived and the buyer considers himself absolved from payment

5. Role of Trade Credit Insurer
Policyholder
Credit Insurer
Reinsurer 2
Buyer 1
Buyer 2
Buyer n
Reinsurer 1
Reinsurer n
Other
Goods / Services
Payments
Premiums
Claim Payments
Default
Trade credit insurers provide three main services:
Risk management through ongoing assessment of present and future creditworthiness of buyers
Collection services for unpaid debts
Claims payment for delayed or unpaid receivables 5

6. What is credit insurance?
Trade credit insurance insures suppliers against the risk of non-payment of goods or services by their buyers:
buyer situated in the same country as the supplier (domestic risk)
buyer situated in another country (export risk)
What is covered?
non-payment as a result of insolvency of the buyer
non-payment after an agreed number of months after due-date (protracted default)
risk of non-payment following an event outside the control of the buyer or the seller (political risk cover), e.g. risk that money cannot be transferred from one country to another.

7. Non-payment when solvent
The buyer is solvent, but does not (want to) pay
Payment is not received for (other) unknown reasons
Protracted Default:
6-month waiting period
Considered equal to insolvency under the policy

8. Technology Trends | Digitalisation
“New” on-line retail platforms (e.g. Amazon and Alibaba) already account for 12% of the global trade.
Digitalisation is approaching an advanced level which enables significant changes of existing business models
Successful translation of B2C concepts to B2B global market places.
Standardised trade finance flows allow seamless connectivity between involved parties

9. Technology Trends | Digitalisation
Fintech, Insurtech and Blockchain developments outpace regulation and legal framework
connectivity with customers, brokers and 3rd parties
meeting future customer expectations by using digital technology to interact with them
working together with digital goliaths

10. The Trade Credit Insurance & Surety Academy
Training Seminars
Basic and Advanced Training Seminars
Trade Credit Insurance
Surety Bond Insurance
Participants 15 max.
Tailor-made in-house

11. THANK YOU!