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
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
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
10. Provides cost-effective collection agency services.
Basis for calculation of
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%
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
Short term: 6 Months
All countries (except ‘blacklisted’)
Other cover options
What is not always
Political risk cover
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)
Protracted default: between 60 to 90 days
Insolvency: between 30 to 60 days
Debt collection &
Done by the credit insurer
Amicable and legal ways
Duration of a policy Fixed duration period - usually 1 year
Can be used as security/collateral assigned in
favour of financing institutions
Risk Shield's credit insurance solutions
Your duly licensed specialized credit
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
Agreements with leading credit insurers
worldwide including Atradius and Coface
Team of professional and experienced
leaders in this field
Carving the credit insurance policy
according to the client's requirements
Best pricing and value-for-money deals for
Negotiating the most competitive
conditions including risk retention, excess,
profit share, political risk cover, commercial
Risk Shield Ltd | BRN C15133765 | Broker License BI15000104 | 27B, Riverside Street, Coromandel,
Mauritius | (230) 58 02 11 48 | firstname.lastname@example.org
For additional information, visit www.riskshield.mu