Newsletter Issue | Lock Finance

Trade Credit Insurance or Bad Debt Insurance as it is sometimes referred to is a product that is very much in demand presently. The reason for this demand is the perception by many that both the local economy and those of our trading partners are in for a tough time over the next eighteen months. The signs are pretty obvious to be honest; here we have dairy prices that may remain low until 2018, the construction and contracting industries coming to the end of a growth cycle and despite an improved currency situation a fall in demand for our exports due to falling business confidence in our major markets. Credit insurers globally anticipate a surge in company failures and as is always the case, many of them will never be seen by suppliers until it is too late. In the case of almost 90% of company failures there are no obvious warning signs, often a slight hiccup is identified after the event that could or should have raised a flag but in the normal course of business these things are usually overlooked.

And this is the case for credit insurance, whilst it performs as expected in paying out in the event of a non-payment, what it also does is provide an independent monitoring of your debtors, collating information from a wide variety of sources and forewarning you when irregularities are identified. Let us assume that you selling to buyer X, the insurer will often have other suppliers dealing with the same company and often from a range of different countries. The insurers operating here are all part of large multinationals and devote enormous resources to their information databases. Buyer X may be obtaining product from Europe/Asia/USA in addition to yourself and if they slow pay any other supplier or change payment terms then you will often receive notification of this. This sort of information can often prove to be invaluable.

National Credit Insurance (Brokers) NZ Ltd is a specialist credit insurance broker and has access to all of the major underwriters of this business. To find out more about how this product may help you please contact Charles Sampson, (charles.sampson@ncinz.co.nz, Tel 09 524 9358)

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