Financial Protection: The most obvious benefit is financial protection. Credit insurance covers the unpaid debt of insolvent companies, therefore protecting a company's cash flow.
Credit Information Services: The value of credit insurance goes beyond simple payment of claims. We offer credit information services that act as a credit management department for a company, providing information on trading partners. With this information, companies can decide whether or not to trade with a company and whether to offer credit. This invaluable service provides up-to-date financial information on companies worldwide.
Credit insurance helps prevent bad debt in the first place by providing an early credit warning system to identify whether customers are experiencing financial problems. This not only prevents bad debt but enables a company to avoid buyers that may become insolvent and reduces the risk of delayed payment.
Credit insurance is becoming a much more sophisticated product due to a wider variety of reasons beyond simple cash flow protection. These include:
1. Balance Sheet Protection
Many companies today are concerned with balance sheet protection. There is a concern about the possibility that a major incident could cause an impact on the balance sheet which would have to be explained to the parent company or shareholders. Credit insurance protects the company against catastrophic bad debt losses, ensuring its continuity and survival.
2. Better Credit Control
Many companies see credit control as an integrated management function and often part of risk management. The value of a credit insurance policy, where it has a credit limit service, is that it provides invaluable assistance to the credit manager of the company to make decisions on new markets, distribution routes, or new clients.
3. Increased Sales
Credit insurance can increase the volume of trade by enabling exporters to offer better credit terms and thereby acquire new businesses. When a company has credit insurance, it can offer open credit to a buyer rather than having to demand letters of credit or other secured terms.
Collateral Security: SLECIC Insurance is considered as a good collateral security as the policy gives easy access to post shipment finance from banks.