Businesses are still finding it hard to secure lending as the banks recapitalise, therefore we are being asked to replace our overdraft facilities and loans with finance packages.
How do we protect ourselves???
This is an additional burden for those companies struggling to recover from losing their cover when insurers changed their underwriting approach at the height of the banking crisis. As premiums soared and cover was withdrawn, a substantial number of organisations have been forced into a position where they needed to trade unprotected and uninsured. In addition to loss of cover, these companies lost the benefit of the disciplines and procedures outlined in their credit insurance policy; their guiding principles for credit risk management.
However, there is hope on the horizon, capacity is returning to the market and there has been an increase in the availability of commercially acceptable terms. Rates have stabilised and Insurers are now writing more business and agreeing cover on a ‘business by business’ basis.
Insurers have developed more sophisticated risk assessment techniques however, as they have adopted more stringent underwriting, they are also demanding that firms provide a more comprehensive financial picture.
Now, more than ever, companies need an experienced broker to help them meet the Insurer’s requirements and obtain the cover they need to protect their business. For many businesses, the crisis in credit insurance has highlighted the benefits that a comprehensive credit management programme can deliver. Credit Management is not just about an insurance policy. The right combination of cover and credit management services can help businesses to establish effective credit control systems and disciplines that can help businesses grow and prosper as well as minimizing the risk of bad debt.
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