An example of safe sales expansion using credit insurance

Credit insurance, when used as a sales expansion tool can provide an outsized return on investment, as measured by the amount of premium paid.  A typical midsize business can show increased profits of hundreds of thousands of dollars with modest sales increases due to trade credit insurance.

For example a business with $20 million in annual revenue and can increase sales to new and existing customers by only 5% due to increased credit can show increased profit of $150,000, after insurance costs, in addition to indemnifying their largest asset.

  • Annual revenue: $20,000,000
  • 5% revenue increase: $1,000,000
  • Average gross margin:  20%
  • Gross Profit: $200,000
  • Premium .25%/revenue: $50,000
  • Profit after premium cost: $150,000

In this case for a cost of $50,000 the business was able to:

  • Indemnify the largest asset on the balance sheet
  • Increase Revenue, open access to new markets
  • Have access to Global trade credit risk analysis
  • Enhance their borrowing ability
  • Strengthen the internal credit management process

- And -

Make $150,000 in additional profit!

Trade credit insurance continues to demonstrate how it both makes and saves company money.