Credit insurance has a long history. Figures similar to the credit insurance we know today were recorded as early as the 18th century. However, its evolution has been continuous and, even today, many companies do not protect themselves against non-payments either because they do not believe it is convenient to insure the entire portfolio or because they consider that they are sufficiently secure.
What is credit insurance?
The functionality of credit insurance lies in the fact that if one of the clients stops paying and obtains debt, this is reimbursed – provided that it is affordable – so that it does not affect your cash flow.
As we have said, this credit tool may have some application in certain circumstances, but it is not a first line of defence, especially if a company’s risk is high. In this sense, the insurance company is in charge of analysing and classifying the risks of companies in order to determine which operations can be covered. But what if companies do not want to cover their entire client portfolio, and do they have options?
Flexible credit insurance
For companies seeking flexibility in covering their customers, customised options have been developed that allow them to protect and insure only the customers they need. This alternative has many advantages that not only improve on the traditional offer, but also break with some preconceived ideas about credit insurance:
- Credit insurance requires a lot of bureaucracy. The process of contracting these services may have been lengthy in the past, but nowadays, and more so with flexible credit cover solutions, the contracting times have been reduced to the point of being able to activate the cover in real time, without waiting and with the corresponding cost savings.
- There is no control over the entire portfolio. Flexible credit models are self-managed, i.e. they perform an exercise of prevention and control over the total portfolio automatically thanks to the evolution of technology and AI.
- Credit insurance costs are high. With flexible credit cover, the costs associated with a traditional policy are eliminated. Moreover, with the operational simplicity discussed above and the possibility to choose the customers to insure, costs are further reduced, offering a very competitive price.
- Knowing how effective the company’s actions are in selling.
Advantages of flexible credit insurance for your company
In Spain, trade credit represents on average more than 40% of a company’s assets. That is why personalised protection against non-payment is key. With flexible credit insurance, companies can benefit from the following advantages, in addition to those mentioned above:
- Customise solutions according to their needs, configuring their own policy.
- Pay only what is necessary.
- Control and optimise the total portfolio, both insured and uninsured.
- Benefit from daily credit risk monitoring.
- A reduction of administrative tasks thanks to the supporting technology.
- An improvement in the credit quality of the company, with a direct impact on the bottom line.
With Yndika you can set up your own policy and manage it in just a few clicks. Without the need to insure all your sales, you have a flexible credit insurance policy at your fingertips, allowing you to reduce the bureaucracy and administrative burden associated with it. Yndika has a customised solution for your company’s needs, allowing you to protect and insure only the customers you require.
