Moving into credit

	Risks covered Commercial perils Insolvency Default Political risk perils* Currency inconvertibility Government action Import/export license cancellation Public buyer default War *Political risk perils only written in conjunction with commercial perils Typical policy structures Excess of loss: multi-buyer (typically includes discretionary credit limit) Excess of loss: specific or named buyer (no discretionary credit limit facility) Ground up: specific or named buyer (no discretionary credit limit facility; includes indemnity percentage riskshare) All of the above can be written as 'losses occurring' or 'risks attaching' Typical products Commercial or commercial and political risk trade credit policy Contract replacement cover - energy industry only Time voyage/charter Anticipatory credit Captive reinsurance Trade receivable securitisation Vendor financing Financial institution/factoring Pre-credit/work in progress

With the launch of a new trade credit division, Markel International has widened its portfolio of insurance products. The division draws on a highly experienced team with expert knowledge of global commerce, trade sectors and country risks.

If money makes the world revolve, credit keeps it spinning. For sellers wishing to move goods and services across the globe, credit is the lubricant that facilitates trade and provides financial momentum. However, it is not without risk. Buyers may become insolvent before the end of their credit term, or fail to pay for any number of other reasons. Either way, the results can be disastrous for sellers – unless, of course, they have been prudent enough to protect themselves through credit insurance.

Security for the seller

Trade credit insurance is essential for business security and confidence, but it is a highly complex field that embraces a wide range of factors including political, cultural, legal and social differences. This complexity means it is important to choose an insurer with a comprehensive understanding of all the commercial contexts and issues that impact both international and domestic trade. Markel International's new trade credit division, launched in April 2010 with a team of highly experienced specialists, provides just such a service.

Global vision and versatility

The trade credit team is led by Ewa Rose, who has 20 years' experience in this specialist field, both as a broker and an underwriter. She is supported by three senior underwriters: Adrian Jones, Simon Moon and Carl Titterton. The four-strong underwriting team has experience across more than 150 countries, and can tailor policies for specific credit risks and contingencies.

Trade credit team: (l-r) Carl Titterton, Adrian Jones and Ewa Rose

"We're a versatile team," says Ewa, "with expert knowledge of counterparty and country risks, and we cover a broad spectrum of sectors. We provide specialist, bespoke, flexible solutions and maintain a strong focus on risk management and good corporate governance. We will provide global solutions, if that’s what the client needs, but can also tailor policies for specific credit risks, markets and contingencies."

Benefits and policies

The key benefits for clients include balance sheet/cash flow protection; improved terms for bank financing facilities; an effective alternative to letters of credit or other types of collateral; reduced need for bad debt reserves; increased potential for sales growth to new and existing buyers because credit is based on a firm foundation; and risk transfer to satisfy capital adequacy requirements. Policies are structured to provide certainty of cover and are underwritten with the aim of forming long term partnerships with clients.

Building on strength

The launch of the new trade credit division reflects Markel's commitment to niche insurance, its experience in covering complex and hard-to-place risks, and its success in developing new business lines across the world. Following the launch of an equine and livestock division in 2009, Markel International's expansion into trade credit underlines the growing strength of the Markel brand and the diversity of its specialist products.

For more information about trade credit, please contact Ewa Rose at ewa.rose@markelintl.com or see our online brochure:
www.market-matters.biz/in-credit