Slowing global growth, shifts in international trade, digitisation and automation of trade receivables, (geo)political instability: trade credit management is becoming increasingly complex, with the risk of affecting your company's cash flow and disrupting the development of your business. Here's how to make trade credit insurance your best weapon for avoiding bad debts and conquering new markets in this new commercial ecosystem.
1 - Expertise, resources, time: outsource complexity, focus on the essentials
Managing your commercial risks is essential for the financial health of your business and maintaining the trust of your commercial partners (buyers, suppliers). But effectively managing these risks on a daily basis requires time and a wide range of specific expertises. This is especially true if you trade abroad, where risks are constantly changing, dynamics are variable and local regulations are highly specific.
For many executives, financial directors and credit managers, this is a significant operational burden. Quite often, the required resources are not even available internally. However, the lack of solutions to assess the creditworthiness of your business partners or manage your credit limits can lead to unpaid debts, an increase in payment defaults and pressure on your company's cash flow.
Outsourcing credit risk management is now as much a strategic imperative as it is a profitable investment for companies. Tailored support from dedicated teams and economists specialising in country and sector risk assessment provides you with bespoke analysis and proactive monitoring of your commercial risks. Your internal teams can focus on the commercial development of your business, while being assured that your commercial risks (cover, credit limits) are continuously adapted to market developments.
2 - Adapting to global trade shifts
Growing protectionism is reshaping global trade flows, with direct impacts on supply chains and market conditions. Geopolitical upheavals are accelerating fragmentation, while friend-shoring is reorienting trade according to alliances. These are all factors that companies must now constantly juggle in their development strategy.
Trade credit insurance and its ‘glocal’ approach (global approach, local support) are your compass in the (geo)political storm. By combining access to global macroeconomic analyses (countries, sectors) with the field expertise of local underwriters, you empower your company to proactively identify risks and growth opportunities. This dual perspective helps you assess the specific risks of each market's local realities and build targeted credit management strategies.
3 - Real-time information, daily automation: the power of data
In an environment where 25% of bankruptcies result from payment defaults, access to reliable, up-to-date financial information about your business partners is critical. Regional differences in reporting and limited access to local data complicate risk assessment and can delay your strategic decisions or even jeopardise your business relationships.
With selected trade credit insurance programmes, you can access accurate, real-time financial information, with hundreds of thousands of new credit reports and analyses on the solvency and payment default risk of most companies worldwide. These solutions allow you to monitor your exposure continuously, with automated alerts on changes in your clients' ratings. This gives you a consolidated view to optimise your credit limits and adjust your business strategies before an incident occurs.
4 - Simplify multi-country policy and claims management
Managing multiple trade credit insurance policies in various countries on a daily basis while handling claims under different jurisdictions is complex... and risky! It can quickly become a time-consuming headache and even a financial drain. Regulatory differences and specific legal frameworks generate high administrative costs and risks of non-compliance.
By centralising your trade credit insurance through a global programme, you can harmonise your coverage terms while maintaining the necessary local flexibility. This approach generates economies of scale and greatly simplifies administrative management. All-in-one digital platforms, such as Alyx, directly integrated into your IT systems also allow you to automate your daily tasks and speed up claims processing, thereby reducing payment times and operational costs.
5 - Maximise coverage, minimise costs: the optimal equation
Solving the equation between controlling insurance costs and optimal protection is key to maintaining a balance between profitability and effective risk management. This is a major challenge for any CFO: over-insurance ties up capital and increases operating costs, while under-insurance exposes your cash flow to significant financial shocks that your company may not be able to absorb in the event of non-payment or insolvency on the part of your client.
A trade credit insurance master agreement gives you the opportunity to negotiate preferential terms through global risk pooling, while benefiting from advanced decision-making tools. Sector analyses, customised portfolio reviews with economists and management tools enable you to fine-tune your coverage to suit your actual needs.
6 - Anticipate shocks
Beyond the reshaping of established trade routes, political instability (changes in government, regulatory changes, geopolitical conflicts, etc.) and some economic factors (recession, inflation, currency fluctuations, etc.) can suddenly affect trading conditions between companies (and the financial stability of each!). These changes are often unpredictable and can lead to contract breaches, payment defaults or affect your ability to expand into new markets or maintain your business in existing markets.
Trade credit insurance helps you anticipate these changes: by leveraging the prospective and predictive analyses of a network of risk experts ( risk underwriters, credit analysts, economists), you gain a competitive edge and take smarter business decisions. This business intelligence solution preserves your competitiveness and your ability to adapt instantly to risks in dynamic environments.
Coface Premium Services: a partner of choice, cutting-edge solutions
Being insured against the risk of payment default and insolvency should be the norm for any company seeking to grow, especially abroad. At Coface, we offer you more than traditional trade credit insurance! Coface Premium Services supports you with a tailor-made approach.
Our comprehensive solution allows you to benefit from:
- a centralised insurance programme via a master agreement
- tailor-made support from teams dedicated to your success
- exclusive services such as regular portfolio reviews with our experts for proactive risk management
- analyses and insights from our risk experts (risk underwriters, credit analysts, economists) on 162 countries and 13 sectors
- cutting-edge digital platforms such as URBA360 for accessing financial information and the Coface Dashboard for managing your exposures in real time.
> Contact our teams now to join the Coface Premium Services programme and secure your growth
