In an unfavourable economic situation, it is necessary to carefully monitor credit quality in order to safeguard one of the most important balance sheet items of the assets. Credit risk thus plays a key role within the business financial cycle.
Credit insurance protects business against commercial and political risks that cannot be controlled. It improves the quality of management results and cash flows and allows a company to grow by minimizing the risk of sudden and unexpected customer insolvencies. Credit insurance gives the security needed to grant more credit to clients, to acquire new ones, even if they are not known, and improve access to the financing, often on more favourable terms.
Credit insurance not only transfers the risk of non-payment to the company, but also offers a wide range of specialized services aimed at evaluating and monitoring client’s reliability, as well as collecting debts in the appropriate places. Therefore, it can be regarded, for all intents and purposes, as integrated tool of Credit Management.