The many Bright Sides of Accounts Receivable Insurance

By Ron Doyle

My last series of blog posts focused on the mitigation of credit and political risk in a highly volatile and threatening world economy. While there haven’t been many improvements to provide hope that the risks facing companies around the world have reduced, today is a lovely April day, and so this post focusses on how credit insurance and better management of the accounts receivable can provide very positive benefits, even if a claim for a bad debt never occurs.

Please note: The non-claim benefits accruing from credit insurance vary depending if the client is a large company, a small company, a company exporting goods or a company providing services.

Benefit #1: It takes time and money to approve a new buyer, but obtaining a credit approval under a credit insurance policy can be faster and less expensive than you may think. With the online systems that underwriters have in place, most credit limit requests are approved within 24 hours, if they have information on the buyer. Compare this turnaround time to the time it takes a company to source the information to do a proper credit analysis and verify references on his or her own.

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Can the needs of small business be met by accounts receivable and trade credit insurance?

By Ron Doyle

Many smaller companies do not have the capital to support their accounts receivable exposure, nor do they have sophisticated credit systems and dedicated staff. The lack of capital to support the accounts receivable creates a greater need for bank support and more comprehensive coverage.

Companies often cite two reasons why they can’t absorb major bad debt losses. Firstly, bad debt write-offs can quickly erode the net worth of a business. And, the second reason: cash flow is critical to a business and bad debts can impair cash flow directly or indirectly by reducing a company’s ability to get financing for their receivables through the bank.

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Credit insurance claim busters – the dreaded trade dispute is increasingly being used as an excuse not to pay

by Mark Attley

In his recent blog post, my ICBA colleague, Rob Downey talks about the claims process in a credit insurance policy and cites his top ten reasons why claims are denied.

In today’s economic environment, my colleague Ron Doyle, another ICBA blogger, has pretty much taken up full time residence in our claims handling room at our head office in Ottawa, Ontario, Canada. Ron is a seasoned credit insurance vet with over 30 years experience in the credit insurance business. Having worked through at least five recessions and possibly four mini recessions, he has a myriad of unusual claims stories.

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