1. RECEIVING TRADE CREDITS FROM CREDIT INSURANCE COMPANIES BY SUPPLYING FINANCIAL STATEMENTS TO PUBLIC REGISTERS

2.  What is the business of a credit insurance company? n insurance against insolvency of commercial receivables n insurance against non-payment n provides credit risk management to its customers n provides trade credit to the suppliers of their customers (policyholders) 2

3. Indemnification Loss minimisation Loss avoidance Insurance cover  Core functions of credit-insurers

4. Credit insurers gather information from local sources like: n Banks n Information agencies n Trade registers n Visits to the buyers n Suppliers: payment behaviour Risk assesment  Core functions of credit-insurers

5.  How does that work? CREDIT DECISION ESTABLISHING OF CREDIT LIMITS MONITORING RISK ASSESSMENT

6. n changes in address n changes in legal form/style n changes regarding the capital n changes regarding bank accounts n changes regarding the payment behaviour n update of financial information n debt collection orders  Monitoring

7. n balance sheet data n profit & loss account n management report/notes n budgets n forecasts n quarterly reports  Financial Information

8. Trade registers: n Obligations to report and to register balance sheets are different from country to country n content of registered data is different n form: – paper – structured data – audited figures – unaudited figures – certificate of auditors  From where can you get this information?

9. Information agencies: n Gather information basically from trade registers and by telephone-interviews Buyer: n Regularly buyer visits are important for understanding each others business and for having confidence in each other.  From where can you get this information?

10. n It helps your creditors (banks or insurance companies) to grant trade credits to your company and to maximize the level of credit. n Your supplier will be able to enhance the business relationship to your company. n This may result for you in receiving more goods, better credit terms or additional discounts. n If you are presently trading on a “cash in advance” basis a credit limit from an insurance company may allow you to trade on credit terms.  Why is it so important to make financial statements publicly and deliver them promptly to the trade registers?

11. n It may mean that the credit insurer is not able to grant limits or is only able to grant limits in a small extent n It may mean that your supplier will ask you for payment in advance or payment within shorter terms.  What will happen if you don’t provide financial information ?

12. n A credit insurance policy insures the entire receivable portfolio of your vendor. n The benefit of an insurance policy is to insure against that catastrophic event that may put a business in jeopardy. n A credit insurance policy is a supplement to your suppliers’ in-house credit management. n opens up opportunities for better financing n Lets your supplier confidently increase sales to new or existing buyers and allows him to reduce bad-debt reserves to free-up working capital. n All this makes your supplier a more dependable business partner.  Your company has good credit, why does your vendor need to insure you?

13. n to get close to their clients’ customers n to understand their business and the market in which they operate n to take decisions on the most up-to-date relevant information n to build relationships to the buyers to have a better understanding of each other’s business  Philosophy of credit insurers

14. n It will help you to maximize your trade credit volume with insurance companies n You will be known as a reliable partner and this will result in: – Enhancing the business relationship with your suppliers – Receiving more goods, better credit terms or additional discounts – If you are presently trading on a “cash in advance” basis a credit limit from an insurance company may allow you to trade on credit terms  What are your benefits if you deliver your financial data promptly to public registers?

15. n about 300.000 companies - 174.120 registered companies - 1.475 joint stock companies - 102.162 companies with limited liability - non registered: ownerships or companies with unlimited liability n about 80.000 – 90.000 companies file their accounts in the trade register  Austria’s companies