Solution: Selected Portfolio
A type of trade credit insurance that covers a specific, preselected group of named customers. By focusing on defined buyers, businesses can align protection with their risk profile and allocate resources where they matter most. This selective approach is ideal for companies with a concentrated customer base or divisions where certain clients pose higher credit risk. Compared to whole turnover programs, selected portfolio coverage typically comes with higher relative costs.
Main Characteristics:
Subject of Coverage: A chosen portfolio of buyers (typically 5 to 10 buyers) covered under one insurance policy.
Losses Covered: Insolvency, protracted payment after a pre-agreed waiting period, and other credit-related events.
Risk Management: Insurer monitors the financial health and payment behavior of the selected buyer portfolio, providing real-time insights and proactive alerts.
Additional Coverage: Collection costs, consignment stock, production risk, and more.
Self-Retention: Typically between 5% and 10%.
Why Choose Selected Portfolio Coverage?
Focused Risk Transfer: Protect against defaults from your most critical or high-risk customers.
Cash Flow Stability: Predictable cash flows due to insurer reimbursement of loss for bad debt losses.
Strategic Growth: Safely maintain or expand high-value relationships without fear of non-payment.
Financing Advantage: Secure your receivables and improve access to bank financing.
Process Improvement: Implementing insurer-driven credit risk standards helps standardise and enhance internal procedures.