introduction/overview

Executive Risk Insurance Services in it’s continued effort to provide innovative solutions for companies is pleased to announce their latest insurance solution – Trade Credit Insurance. In keeping with the principles that ERIS has built its business we now offer this cover to help mitigate the risk of non-payment from a debtor to a selection of commercial and export risks.

The trade credit practice is founded on the same principles that have delivered sound solutions to the insurance community since our inception in 2004. Our ability to quantify risk and establish insurance solutions through our extensive knowledge and expertise is the basis for our latest product offering. In addition, we seek to differentiate ourselves through the following attributes:

1. clear and comprehensive coverage – Our trade credit products are offered in understandable, inclusive and comprehensive terms

2. solution based underwriting - A solution based approach to underwriting allows ERIS to develop trade credit insurance solutions that address a need effectively and are tailored to a company’s specific needs. ERIS prides itself on not shying away from complex risks

3. service level commitments – ERIS prides itself on maintaining a service commitment to our brokers and insured clients. Efficient policy issuance, timely endorsement response

4. financial stability – Our trade credit insurance is 100% provided by Kiln Syndicate 510 at Lloyd’s through a Managing General Agreement, putting ERIS in the position of a Lloyd’s coverholder. Lloyd’s is ‘A+’ rated by Standard & Poor’s and is admitted in every province and territory in Canada

the risk

Managing credit risk is a growing issue for most companies. A company’s client controls a key asset of the business – accounts receivable!  Once title to those goods is transferred to the client, control over this asset is greatly reduced. Trading in a competitive environment can increase risk to the company and it’s assets. Adding to the increase in risk is the level of concentration companies face due to mergers and acquisitions that result in a shrinking customer base and growing credit exposure to each customer, a company’s balance sheet becomes increasingly exposed to the actions of their customers.

In addition, companies seeking to grow their business by offering competitive sales terms as well as offering credit limits that support demand are faced with seeking ways to maintain their credit risk at a level that is appropriate for the company’s financial position. Seeking ways to cost effectively lay off excess credit requirements can be the difference between a good year and satisfied shareholders and a mediocre year. Seeking alternatives to mitigate credit risk can be difficult in an ever changing financial climate. Many products, while effective, may be restrictive, costly or not an exact match for the risk at hand. It is important to ensure that the “hedging” tools that a company uses to mitigate its risk align properly and cost effectively with its needs and business plan.

our coverage solution

Companies hedge many aspects of their business against negative inputs that can turn a good year in to a bad year. Credit management is one area that can directly impact the bottom line of a company and can make or break a company’s financial success in a given year! ERIS trade credit insurance is designed to help a company manage the following issues:

• Mitigate the risk associated with concentration in the customer base

• Leverage your company’s own credit appetite

• Utilize the accounts receivable asset to enhance financing arrangements

• Insulate cash flow from large bad debts

• Hedge the company’s own credit management practices

ERIS’ focuses our underwriting on our prospective client, we underwrite the credit management procedures and design a program that will meet the needs of the company and its credit management personnel. Our programs are designed to hedge the credit management team’s day to day credit procedures through the offering of key policy features such as:

• Non-cancelable buyer/debtor limits

• Discretionary Credit Limit Options

• Domestic and Export policy forms

• Ability to endorse “Loss-Payees” for accounts receivable financing programs

• Appropriate co-insurance percentages


sample policy structures

trade credit insurance launch

Excess of Loss

Advantages

• Hedges Credit Department

• Premium pays for protection where
needed

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 DCL – Discretionary Credit Limit

Credit Leverage

Advantages

• Leverage company’s internal credit appetite

• Cost effective collateral replacement

• Trade with more ease

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•

Excess Policy

Advantages

• Buy greater protection to match
needs

• Blanket excess or buyer limit specific

• Overcome primary carrier shortfalls

• Follow form policy structure

Quota Share Policies

Advantages

• Build a larger program

• Tap in to greater capacity availability

• Single wording – claims and administration lead

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•

 LOL – Limit of Liability

the suite of products

ERIS has developed four initial products designed to address the key areas where trade credit insurance arises. We have designed each policy to clear, standard issues are built in to the policy so as to minimize the need for additional endorsements. Each policy

our payment terms

Premiums are to be paid within 30 days of the inception date of the policy term.

Installment payments are not accepted.

our claims process

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