Tel: 01424 217698 or 07971 996658 Fax: 0845 127 4385
E-mail: Rycroft Associates
Credit Insurance current position:
The current position seems to be that the top three (by size), credit insurance companies have over-exposed themselves to the market by competing with each other, meaning lower premiums but the effect of this is a lower bad debt reserve, so insurers are now seeing their own loss ratio's (currently) hit up to 150% with no end in sight. The only answer therefore is to slash exposure but this may well have a bigger impact in the near future - as their premium income reduces, because they are losing policies so will their ability to recover.
But all is not lost. There are other insurers who have taken a more sensible approach to both underwriting and calculating of premiums. At the time they would not compete with the top three but would write premiums as they felt appropriate. This has clearly been the correct strategy as they are now, not sitting pretty but comfortable enough to weather the storm.
Where can we help:
We have access to 5 insurers still writing cover, although they are under pressure due to the number of new enquiries they are getting, plus we have access to credit insurance with finance which as a package can be really competitive, even in this market and we now have access to an insurer allowing you to self underwrite ALL your own limits (for turnover co's in excess of 16m).
Case Study - A plastics profiler who had an independent credit insurance policy and finance agreement has just merged the two using one of our schemes. They have a good number of losses from debts uninsured as well as their own insured loss ratio of 156% so they could not stay with their current insurer due to the number of restrictive limits being imposed and they could not change insurers due to the number of bad debts they had.
They are paying less now (for finance and insurance together) than they were last year, plus they are getting better insurance cover.
We also have available a scheme for companies who have had cover removed or reduced as a buyer (for companies needing a line of 500k+) e.g. If a supplier as been using credit insurance and the insurer has taken cover away, whereby this has left you, as the buyer, struggling to get goods and being forced to pay cash in advance (or on reduced credit terms), we have a scheme available whereby the goods are purchased on your behalf, financed and then supplied to you on credit terms of up to 120 days.
The benefits of this are simple:
A. You can have 120 days credit.
B. You will become effectively a cash buyer, so the scheme costs can be offset against this buying power.
C. As your supplier will either not need or have a reduced need for credit insurance they should be able to discount and therefore offset further costs.
The schemes offered are very much on a case by case basis an will depend on a number of factors but it cost nothing to find out.
In the first instance please either contact 07971 996658 or email richard@rycroftassociates.com and we will try and help.
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