Large companies are increasingly opting for excess-of-loss credit insurance, with the trend set to grow further in the future.
This was the general consensus at a recent conference on credit risks organised by the German association of risk and insurance managers GVNW.
Claudia Haas, head of market management at Euler Hermes, commented that insurers have become more accommodating to excess-of-loss solutions as companies have grown more sophisticated in their risk and credit management.
She said: “We can now implement comprehensive risk transfer as our clients have the professionalism required to retain certain risks.”
Burkhard Wittgen, member of the executive board at Aon Credit Solutions, agreed. “Excess of loss is becoming more popular, especially among big companies with good credit management. They are able to take care of their own debt collection and risk assessment. The excess-of-loss insurance is then focused on risk transfer,” he said.
Wittgen also noted that clients with traditional credit cover had been affected by capacity reductions during the coronavirus pandemic. On the other hand, companies with excess-of-loss policies enjoyed greater stability as they had no credit limits.
The point was also made that digitalisation is facilitating improved process efficiency and adding transparency to, for example, receivables management or supply chain risks.
This is conducive to excess-of-loss insurance as companies can better segment their business areas and the associated risks.
This trend is part of a wider requirement to improve networking among business partners, stated Tim Hesse, head of broker distribution and partner management DACH at Euler Hermes. He said companies, insurers, fintechs, platforms and broker firms should work more closely together, in order to establish “workable and coordinated solutions”.
Credit insurance is a valuable means of mitigating major risks, such as geopolitical or supply chain issues. As companies become better at identifying which risks they wish to cede, a more partnership-based approach will be needed to align insurance products more closely to clients’ specific requirements.
Eric Brabenec foi o gestor responsável pela Coface, no lançamento do Seguro de Crédito no Brasil. Em 2008, criou a GECO Corretora com foco exclusivo em Seguro de Crédito.