They can help you get paid in the event of any unforeseen circumstances, such as insolvency, bankruptcy, political risk, or war. Financial institutions like banks avoid extending credit to businesses with high accounts receivables. This is because it is a risk for them if you cannot collect outstanding payments from ledger account your customers.
- Examples of health insurance receivables include claims for medical treatments, surgeries, medications, and laboratory tests.
- Understanding these factors helps you structure coverage that balances protection with cost-effectiveness.
- Accept a broad range of payment types — such as credit cards, automated clearing house (ACH) transactions, and wire transfers — so that they can use their preferred method.
- Pay close attention to their coverage options, including policy limits and exclusions, and see if they offer tools like risk assessments or insights to help you navigate challenges.
- This insurance serves as a safety net, shielding your business from risks like customer non-payment, bankruptcies, or even political turmoil.
- If the average debt on your unpaid invoices is $100,000, you can expect to pay around $15,000 to collect the total amount.
Credit solutions for financial institutions
Atradius underwriters bring deep knowledge of industries like energy, chemicals, food, and beauty. Their Global team combines geopolitical insights with an understanding of sector-specific challenges, helping businesses navigate complex markets. Additionally, Allianz Trade Liability Accounts provides political risk insurance to further enhance its global offerings.
AIG’s Full Cycle Policy Support Portal – Functionality & Feature Enhancements
- Companies offering payment terms are exposed to multiple economic and geopolitical cycles that exposes them to the risk of non-payment due to customer insolvency, protracted default, and political events.
- By digitizing and centralizing claim information, insurers can accelerate the processing time, reduce errors, and improve transparency throughout the entire claims lifecycle.
- However, payment plans can range anywhere from a couple of days to a fiscal year.
- Carriers with extensive global networks bring local expertise and market insights.
- For most businesses, the cost of trade credit insurance remains affordable, typically under 1% of sales revenue.
- American Trade Finance protects several industries from the impact of non-payment, while enabling competitive credit terms.
While factoring involves selling your receivables to a third party at a discount to receive immediate cash, AR insurance protects those receivables while they remain on your books. AR factoring may provide immediate liquidity but comes with higher costs and potential loss of customer relationships, as the factor takes over customer communication regarding payments. While European businesses have embraced accounts receivable insurance for decades, more and more North American finance teams are now recognizing its importance as part of a balanced risk strategy.
Risk Mitigation and Reduced Bad Debt
Whether it’s big or small, domestic or international, your company can benefit from accounts receivable insurance. We are one of the top business insurance providers in Canada, having more than 1,600 business clients across the country. If they fail to pay their debt, you would need to make an additional $2 million in sales to make up for the lost profit.
We’re American Trade Finance (Atrafin).
It enables businesses to extend credit to customers with greater confidence and enhance their attractiveness to potential clients. It also helps companies make quicker credit decisions and extend more attractive offers, increasing sales and improving financing terms. By insuring accounts receivable, businesses can extend credit to customers with greater confidence – even in unpredictable markets. Many policies also offer tools for risk assessment and credit management, enabling smarter decisions about customer relationships and credit limits. This can be particularly helpful for industries that face frequent supply chain challenges or economic swings. Atradius stands out in the world of trade credit insurance by offering customized solutions accounts receivable insurance backed by nearly a century of experience and a global presence in over 50 countries.
