Across 2023 and 2024, there was a significant shift in the insurance market due to global TCI premiums increasing by over 10% due to a growing demand for insurance and a corresponding rise in premiums. 

If you are unsure as to why you should pay more, you may need some reassurance of what this form of insurance offers and how a good credit insurance broker can provide clear benefits for your business.

Keep reading to learn more about customer non-payment, the significant risks involved with that, and how trade credit insurance transfers this risk from your balance sheet to an insurer, helping you avoid the worst of the problem. Learn how a top broker can boost credit limits and fast-track payouts today.

Why Firms Need Credit Insurance Broker Expertise

Beyond the basics of TCI, it is important to understand scenarios in which having insurance brokerage services can save you from disaster.

For example, you may find that only a few buyers purchase the majority of your work. When this happens, you are at significant risk should you lose any of these customers.

So, for example, if only two or three clients out of hundreds owe you more than one-fifth of all invoices, keep an eye on them and discuss with a credit insurance broker how to mitigate the losses from them disappearing. As the insurance broker would prefer that their company not pay out, they may be able to help you avoid such an issue.

You will also want to analyze your receivables to flag any slow-paying accounts. If you find yourself waiting for significant lengths of time, you should follow up more often and discover ways to mitigate the problem before your available cash runs out.

Your broker's tools can likely detect these before you do.

Financial Risk Management for Individual Buyers

Similarly, you can ask your broker to investigate your customers' credit scores to determine precisely how much risk they pose. Then, you can decide how much business you want to extend to each one, ensuring you engage safely while still having an opportunity for continued profit.

If your broker has an online dashboard, you can use it to get an at-a-glance snapshot of every buyer, seeing how reliable they are and if they are displaying any warning signs, which will help you organize more easily.

When discussing the situation with a client after this, you can choose payment rules that match how much you should trust them. If they are less likely to pay on time, set a net-30 limit and ensure that they understand the repercussions of failing to reimburse you.

Analyzing International Customers

Ensure you break down your receivables by each customer's risk grade, highlighting those who fall above your comfort level. However, ensure that you engage with your broker to fully understand not only your customers' capabilities but also the inherent risks of engaging with firms in other countries.

For example, reports have recently revealed that Canadian exporters insure less than 1% of their overseas receivables, according to Insurance Journal. This simple fact puts them at a greater risk of danger should something occur that causes them to lose out on a payment. Your Canadian clients who rely on overseas business may, thus, be at greater risk than others.

You can also have your broker set up alarms to notify you if any specific events you're concerned about occur. For example, if you are paid in dollars, you may wish to set up an alert when the dollar's value drops during a time of financial instability.

For those outside the US, this means you will receive less in payment, whereas for US firms, it may be harder to make purchases.

Then, calculate worst-case scenarios by modeling both 60-day and 120-day payment delays. Put systems in place to ensure that these do not cause significant losses.

What Top Insurance Brokers Provide Beyond the Policy

When you engage with a broker, such as those working with the award-winning TCI expert, ARI Global, they can watch your whole customer list at all times. By doing this, they can inform you whenever a buyer's payment patterns start to deviate from expectations. They can also provide you with insights as to what they expect to occur moving forward, even if the buyer has not yet shifted in their patterns.

If the worst happens and you suffer a loss, the broker can handle all the back-and-forth with the insurer, helping you resolve the issue faster and ensuring you get paid before the situation escalates.

Training for Staff

While not universal, you may want to discuss the necessity of training with your staff. If those on your team need to understand what an insurer needs and what they can provide, doing so helps remove many barriers and can mean that your staff are not the bottleneck. 

It also helps maintain a strong partnership, making it easier to remain in good standing with them for long-term benefits.

Direct Access to Analysts and Tools

The Credea network is a global association of credit insurance brokers and analysts. Working closely with a broker means that you can leverage this, allowing you access to an extensive range of expertise, such as how to deal with specific or tricky buyers.

Similarly, these brokers can often provide or research risk-analysis tools and help tie them directly into your existing systems and software. They can, thus, allow you to help yourself handle several tasks without needing to wait to speak with them directly.

You can then see real-time credit data, business profiles, asset analyses, or other information at the click of a mouse.

Elevate Your Business Credit Protection with ARI Global Brokers

Having a credit insurance broker on your side can help you shift non-payment risk from you, and a skilled broker can also work with you to reduce the risk of it happening in the first place. Our analytics and trained staff can work to maintain a healthy cash flow, while specialists can engage in proactive risk mitigation with your teams.

To learn more about what this could mean for you, contact ARI Global today for a quote. Discover the benefits of a robust TCI policy and protect your receivables for a more secure future.