Credit insurance provides protection for clients against accounts receivable losses. Companies that sell goods or services on credit terms are highly exposed to the risk of non-payment due to customer insolvency, protracted default and political risks that prevent the buyer from fulfilling its payment obligations.

1. CREDIT INSURANCE
Credit insurance provides protection for clients
against accounts receivable losses. Companies that
sell goods or services on credit terms are highly
exposed to the risk of non-payment due to customer
insolvency, protracted default and political risks that
prevent the buyer from fulfilling its payment
obligations.
What is Credit Insurance?
• Credit Insurance indemnifies the policyholder for the invoice value
of goods delivered to a customer but unpaid due to the customer’s
insolvency or default.
• Policies are written on a 12-month basis, covering goods and
services delivered to customers during the policy period.
• Premium is charged as a rate on annual credit turnover. The policy
features risk-sharing in the form of a self-insured retention.
Who Buys Credit Insurance?
• Any company that sells goods and services on credit terms (i.e.,
extends credit to customers rather than requiring payment up front)
and is exposed to the risk of non-payment.
• Large, medium and small commercial enterprises.
• Subsidiaries or divisions of Multinational companies may buy
coverage for different regions or product lines locally, or under a
coordinated global program.
Top 10 Reasons to Buy Credit Insurance
1. Protects against the risk of a customer default on sales made on
credit terms.
2. Increase sales to new and existing customers.
3. Mitigates concentration risk when a large portion of a company’s
sales are concentrated among a few customers.
4. Facilitates attractive bank financing.
5. Helps establish new foreign markets to increase export sales.
6. Supports a company’s accounts receivable management and
validates credit protocols.
7. Provides an insured credit limit for a customer and monitors
portfolio performance during the policy period.
8. Reduce your company’s bad debt reserve.
9. Offers a solution for directors and officers by providing a second
opinion on customer credit limit decisions and monitoring the customer
portfolio.
10. Provides cost-effective collection agency services.
CREDIT INSURANCE
Protecting your
business

2. Parameter Details
Basis for calculation of
premium
• Estimated credit turnover for coming 12 months
• Excludes VAT, intercompany sales, cash sales
Rate • Between 0.10% p.a to 1.5% p.a
% cover • Between 85% to 95%
Client retention • Between 5% to 15%
Information cost • Inclusive in the rate (or in some cases paid
separately based on number of debtors in the portfolio)
What is covered? • Insolvency and Default
• Delivery of goods and services
• Business entities
• Short term: 6 Months
• All countries (except ‘blacklisted’)
Other cover options • Binding contracts
• Pre-delivery costs
• Consignment
What is not always
covered?
• Political risk cover
Any ceiling? • Maximum annual liability - usually 30 times the
premium paid or highest credit limit
Types of credit limits • Credit limits approved by the credit insurer
• Discretionary limits (decision taken in-house by the
client, but still covered by the credit insurer)
Claims • Protracted default
• Insolvency
Indemnification period • Protracted default: between 60 to 90 days
• Insolvency: between 30 to 60 days
Debt collection &
Recovery
• Done by the credit insurer
• Amicable and legal ways
Duration of a policy • Fixed duration period - usually 1 year
Security/Collateral • Can be used as security/collateral assigned in
favour of financing institutions
For additional information, visit www.strategicinsight.mu
Strategic Insight Ltd's credit insurance
solutions
• Wide array of expert solutions to pre-empt
risks from adversely affecting your business
• Risk management is our sixth sense
• Protecting our clients' businesses against
black swan events
• In-depth expertise in credit insurance
• Extensive network among credit insurers
in Mauritius and worldwide
• Proficient financial advisory services
• Team of professional and experienced
leaders in this field
• Carving the credit insurance policy
according to the client's requirements
• Provision of quotations from different
credit insurers worldwide
• Best pricing and value-for-money deals for
our clients
• Negotiating the most competitive
conditions including risk retention, excess,
profit share, political risk cover, commercial
disputes, etc
• Ensuring high risk management standards
for the organisation
Product profile
Strategic Insight is a new company launched in 2015 by a group of experienced and respected professionals to provide value-added services to its clients especially in Risk Management, Strategic Planning & Business Development, Financial Advisory,
Training & Development and Account Services & Corporate Finance. In addition, the company offers an innovative and unique product to its customers namely Business Intelligence Reports on companies based in Mauritius and across the world.Our main
objective is to optimise our clients' potential by not only providing them with adaptive solutions for their requirements, but also to support them in their expansion. We aim to harness them with the tools to achieve their goals.
Additional information about Strategic Insight can be found at www.strategicinsight.mu.
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