When we think about Credit Insurance, generally we focus on the protection afforded to company assets, however, Credit Insurance is much more than that, as one of its main advantages is the increased commercial appetite for new clients, new markets and the leveraging of sales within existing clients.
To focus on the acquisition of new clients and new markets, we use the experience of Credit Insurers, which generally have already analyzed such clients and monitor the same at the request of other insureds in Brazil and worldwide. Therefore, in most cases when prospecting for new clients, it is not even necessary to send the documentation to the Insurer, it is only necessary to request the credit limit on the Insurer’s client base. In this manner, it is possible to determine the potential of new clients with greater precision and certainty.
Generating sales with Credit Insurance
The leveraging of sales has a strategic value, for instance, when the credit department considers that it has reached a client’s maximum exposure, the credit limit approved by the Insurer can be used as a leveraging factor. For instance, if the credit department approves a limit of BRL 500,000 for buyer X and the Insurer approves BRL 500,000 for the same buyer X, the company may simply transfer the risk to the Insurer and sell BRL 500,000 or then sell BRL 1,000,000 and divide the risk with the Insurer and double the exposure or the payment period for this client.
Finally, we believe that, in commercial terms, Credit Insurance has potential advantages with respect to new sales in view of the extensive databank analyzed and constantly monitored by the Insurers. We would remind that the working capital to support this increased exposure can be obtained through financial tools provided by a Credit Insurance policy.
With Credit Insurance you can increase your sales to existing clients without increasing your credit risk. This was the case with one of CredRisk Insurances’ clients, which increased its annual turnover from R$ 40mi to R$ 500mi.