Solution: Single Buyer
A single buyer trade credit insurance program provides targeted protection for transactions with one specific, typically large customer. It transfers the credit risk associated with that buyer up to an agreed credit limit, offering coverage against non-payment risks such as insolvency, protracted default, or other credit-related issues.
Main Characteristics:
Subject of Coverage: All receivables from a single, named buyer are insured under one policy (policy can be syndicated by two or more insurers for large exposures).
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, providing real-time insights and proactive alerts. Depending on the nature of the underlying contract with the named buyer, the credit limit may be adjusted during the year or fixed for the duration of the contract.
Additional Coverage: Collection costs, consignment stock, production risk, and more.
Self-Retention: Typically between 5% and 10%.
Why Choose Single Buyer Coverage?
Focused Risk Transfer: Protect against the potential impact of a selected, major customer’s default.
Cash Flow Stability: Secure predictable cash flows through insurer reimbursement 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.