Euler Hermes is a leading global credit insurance company that provides businesses with protection against non-payment by their customers. Founded in 2002, Euler Hermes has established itself as a trusted partner for companies looking to mitigate the risks associated with trade credit. With a presence in over 50 countries, Euler Hermes offers a range of credit insurance solutions designed to help businesses manage their credit risk and improve their cash flow.
What is Credit Insurance?
Credit insurance, also known as trade credit insurance, is a type of insurance that protects businesses against the risk of non-payment by their customers. It provides coverage for invoices that remain unpaid due to insolvency, bankruptcy, or protracted default. Credit insurance is an essential tool for businesses that sell goods or services on credit, as it helps them to manage their credit risk and avoid significant financial losses. Credit insurance can be particularly useful for small and medium-sized enterprises (SMEs), which may not have the resources to absorb large losses due to non-payment.
How Does Euler Hermes Credit Insurance Work?
Euler Hermes credit insurance works by providing businesses with a safety net against non-payment. Here’s how it works: policyholders pay a premium to Euler Hermes, which in turn provides coverage for their invoices. If a customer fails to pay an invoice, the policyholder can claim against the insurance policy, and Euler Hermes will pay out a percentage of the invoice value. The payout percentage typically ranges from 80% to 90% of the invoice value, depending on the terms of the policy. Euler Hermes also provides policyholders with access to its extensive network of credit analysts and risk experts, who can help them to assess the creditworthiness of their customers and make informed decisions about extending credit.
| Policy Type | Coverage Level | Premium Rate |
|---|---|---|
| Whole Turnover Policy | 80-90% of invoice value | 0.2-0.5% of annual turnover |
| Excess of Loss Policy | 90-95% of invoice value | 0.5-1.0% of annual turnover |
Benefits of Euler Hermes Credit Insurance
Euler Hermes credit insurance offers a range of benefits for businesses, including: improved cash flow, reduced bad debt, and increased competitiveness. By providing coverage for invoices that remain unpaid, Euler Hermes credit insurance helps businesses to manage their credit risk and avoid significant financial losses. This can be particularly useful for businesses that operate in high-risk industries or that have a large number of customers with poor credit histories. Euler Hermes credit insurance can also help businesses to improve their relationships with their customers, by providing them with the confidence to offer more generous credit terms and to pursue new business opportunities.
Industry Applications
Euler Hermes credit insurance is suitable for businesses operating in a wide range of industries, including: manufacturing, wholesale, retail, and services. It is particularly useful for businesses that sell goods or services on credit, as it helps them to manage their credit risk and avoid significant financial losses. Euler Hermes credit insurance can also be used by businesses that operate in high-risk industries, such as construction or energy, where the risk of non-payment is higher due to factors such as project delays or changes in market conditions.
- Manufacturing: Euler Hermes credit insurance can help manufacturers to manage their credit risk and avoid significant financial losses due to non-payment by their customers.
- Wholesale: Euler Hermes credit insurance can help wholesalers to improve their cash flow and reduce their bad debt, by providing coverage for invoices that remain unpaid.
- Retail: Euler Hermes credit insurance can help retailers to manage their credit risk and avoid significant financial losses due to non-payment by their customers.
What is the cost of Euler Hermes credit insurance?
+The cost of Euler Hermes credit insurance varies depending on the type of policy, coverage level, and premium rate. Typically, the premium rate ranges from 0.2% to 1.0% of annual turnover.
What types of policies are available from Euler Hermes?
+Euler Hermes offers a range of policy types, including whole turnover policies and excess of loss policies. Policyholders can choose from different coverage levels and premium rates to suit their business needs.
In conclusion, Euler Hermes credit insurance is a valuable tool for businesses looking to manage their credit risk and improve their cash flow. With its range of policy types, coverage levels, and premium rates, Euler Hermes credit insurance can be tailored to meet the specific needs of businesses operating in a wide range of industries. By providing coverage for invoices that remain unpaid, Euler Hermes credit insurance helps businesses to avoid significant financial losses and improve their competitiveness in the market.
