Credit Insurance

CREDIT INSURANCE
INTRODUCTION
Credit:
A contractual agreement in which a

borrower receives something of value now and
agrees to repay the lender at some later date. When
a consumer purchases something using a credit card,
they are buying on credit (receiving the item at that
time, and paying back the credit card company
month by month). Any time when an individual
finances something with a loan (such as an
automobile or a house), they are using credit in that
situation as well.
Credit Insurance:
Credit insurance is an insurance policy

and a risk management product offered by
private insurance companies and governmental
export credit agencies to business entities
wishing to protect their accounts receivable
from loss due to credit risks such as protracted
default, insolvency or bankruptcy. This
insurance product is a type of property & casualty insurance, and should not be confused with
such products as credit life or credit disability insurance, which individuals obtain to protect
against the risk of loss of income needed to pay debts. Trade Credit Insurance can include a
component of political risk insurance which is offered by the same insurers to insure the risk
of non-payment by foreign buyers due to currency issues, political unrest, expropriation etc.
Trade credit is offered by vendors to their customers as an alternative to prepayment

or cash on delivery terms, providing time for the customer to generate income from sales to
pay for the product or service. This requires the vendor to assume non-payment risk. In a
local or domestic situation as well as in an export transaction, the risk increases when laws,
customs communications and customer's reputation are not fully understood. In addition to
increased risk of non-payment, international trade presents the problem of the time between
product shipment and its availability for sale. The account receivable is like a loan and
represents capital invested, and often borrowed, by the vendor. But this is not a secure asset
until it is paid. If the customer's debt is credit insured the large, risky asset becomes more
secure, like an insured building. This asset may then be viewed as collateral by lending
institutions and a loan based upon it used to defray the expenses of the transaction and to
produce more products. Credit insurance is, therefore, a trade finance tool.
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CREDIT INSURANCE
Trade credit insurance is purchased by business entities to insure their accounts

receivable from loss due to the insolvency of the debtors. The product is not available to
individuals. The cost (premium) for this is usually charged monthly, and is calculated as a
percentage of sales for that month or as a percentage of all outstanding receivables.
Trade credit insurance usually covers a portfolio of buyers and pays an agreed
percentage of an invoice or receivable that remains unpaid as a result of protracted default,
insolvency or bankruptcy. Policy holders must apply a credit limit on each of their buyers for
the sales to that buyer to be insured. The premium rate reflects the average credit risk of the
insured portfolio of buyers. In addition, credit insurance can also cover single transactions or
trade with only one buyer.
Credit insurance was born at the end of nineteenth century, but it was mostly
developed in Western Europe between the First and Second World Wars. Several companies
were founded in many countries; some of them also managed the political risks of export on
behalf of their state.
Credit insurance indemnifies the policyholder against loss resulting from the non-
receipt of payment in respect of a transaction approved by the credit insurer. Such transaction
must provide for the supply of goods or services on credit terms by the policyholder to a
buyer. The non-receipt of payment must be due to the buyer’s insolvency/liquidation or
protracted default or, where export transactions are involved can also be due to repudiation or
political causes of loss38. A simple example: A yarn manufacturer supplies his product to a
textile-mill on 120 days terms of credit. The credit insurer has insured the transaction. The
textile-mill goes insolvent. In terms of the credit insurance policy the Protracted default
means non-receipt of payment after a specified period from due date.
Repudiation refers to the importer’s unlawful refusal to accept the goods/services

supplied by the exporter. Political causes of loss consist of: a) the refusal of the importing
country to allow the exported goods to enter unless such import prohibition already existed at
date of export; b) the inability of the importer to transfer the purchase price to the exporter
due to the importing country’s shortage of foreign currency or other regulation disallowing
the transfer which came into force after shipment of the goods; c) non-receipt of payment due
to strike, civil commotion, war or other similar disturbances.
Investopedia Definition:
Credit insurance can be a financial lifesaver in the event of certain catastrophes.

However, many credit insurance policies are overpriced relative to their benefits, as well as
loaded with fine print that can make it hard to collect on. If you feel that credit insurance
would bring you peace of mind, be sure to read the fine print as well as compare your quote
against a standard aterm life insurance policy.

CREDIT INSURANCE
HISTORY OF CREDIT INSURANCE
During the 1990s, a concentration of the trade credit insurance market took place and
three groups now account for over 85% of the global credit insurance market. These main
players focused on Western Europe, but rapidly expanded towards Eastern Europe, Asia and
the Americas
While trade credit insurance is often mostly known for protecting foreign or export
accounts receivable, there has always been a large segment of the market that uses Trade
Credit Insurance for domestic accounts receivable protection as well. Domestic trade credit
insurance provides companies with the protection they need as their customer base
consolidates creating larger receivables to fewer customers. This further creates a larger
exposure and greater risk if a customer does not pay their accounts. The additions of new
insurers in this area have increased the availability of domestic cover for companies.
Many businesses found that their insurers withdrew trade credit insurance during
the late-2000s financial crisis, foreseeing large losses if they continued to underwrite sales to
failing businesses. This led to accusations that the insurers were deepening and prolonging
the recession, as businesses could not afford the risk of making sales without the insurance,
and therefore contracted in size or had to close. Insurers countered these criticisms by
claiming that they were not the cause of the crisis, but were responding to economic reality
and ringing the alarm bells.
In 2009, the UK government set up a short-term £5 billion Trade Credit Top-up

emergency fund. However, this was considered a failure, as the take-up was very low.

CREDIT INSURANCE
FEATURES OF CREDIT INSURANCE
1. Captive Insurance:
Select-Risk Cover: A multi-debtor structure that excludes lower-risk obligors

from the insurance policy. Generally, prospective insured’s can expect many
underwriters to decline to quote on a select-risk portfolio or to receive higher
premium rates or risk retention in cases where quotes are provided. However, insurers
sometimes quote aggressively on select-risk portfolios if the remaining spread of risk
is attractive.
2. Whole-turnover cover:
A multi-debtor credit insurance structure that covers all of a company’s open

account sales. Many insurers will decline to quote select-risk portfolios over concerns
with adverse selection. For whole-turnover export policies, most insurers are
amenable to treating Canadian sales as “domestic” and therefore to excluding them at
the insured’s request. However, adding Canadian sales to an export program can help
to make the portfolio more attractive to underwriters and improve the policy’s
premium rate factor. Because whole-turnover programs maximize the spread of risk
and generate higher premiums for insurers, clients may expect to receive more of the
insurer’s capacity on higher risk credits than might otherwise be provided on a select-
risk portfolio.
Key Account Cover: A multi-debtor structure that insures only the “largest”
customers, e.g., customers with credit exposures above $500,000, the top ten
customers, etc.
3. Catastrophic Cover:
A multi-debtor structure with a sizeable deductible (either per-loss or first loss

annual aggregate deductible) written into the policy. These structures would only
result in indemnification in years where significant accounts receivable losses occur.
Insured companies receive the benefit of significantly reduced premiums and approval
of marginal credits because they retain high levels of risk.
First-Loss (Ground-Up) Cover: A multi-debtor insurance structure

traditionally offered by Coface, Atradius, and Euler Hermes. These insurers have
substantial underwriter staffs and large databases of information on obligors around
the world. As such, they have the ability to underwrite all or the majority of the
customer credit limits needed by the insured. Because they have more control over

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which obligors are covered, these insurers may provide coverage with no (or low)
deductibles.
4. Excess-of-Loss Cover:
A multi-debtor insurance structure traditionally offered by FCIA, Ex-Im Bank,

Chartis, Houston Casualty, QBE, Ace, and Lloyds’ of London syndicates. If
comfortable with the prospective insured’s credit management and credit procedures,
these insurers will provide a high level of discretionary credit authority that allows the
insured to underwrite the majority of the customers for coverage based on its own
internal due diligence. Insurers typically reserve the right to underwrite the largest
customer credit limits or those customers located in the most volatile markets. Larger
annual aggregate deductibles are written to excess-of-loss policies to justify the
significant discretionary credit authority granted.
5. Multi-Insurer Syndication:
Insurers are increasingly willing to participating in syndicated credit insurance

structures in cases where exceptionally large obligor exposures are to be covered.
Most insurers require that their individual premiums be $100,000 or more to consider
syndication. These structures have many benefits, including the diversification of
insurer counter-party risk and the access to capacity necessary to establish large
insured lines of credit for obligors. IRC has developed its own “Alliance” policy text
for syndications that has now been accepted and utilized by all the insurers in the
market. Syndications can be issued on both single and multi-debtor bases.
6. Global Programs:
The traditional market view of a global credit insurance program is one in

which a multinational company packages its global business and negotiates coverage
with one carrier. Companies that take this approach hope to receive high-volume
premium discounts and special treatment as a large premium account. However,
individual business units often find that these globally tailored programs do not meet
their local needs and that coverage can sometimes be improved in local markets.
Further, concentrating coverage with one insurer at excessively low premiums can
lead to coverage short-falls and other problems that multinationals should consider
carefully.
In response to the inadequacy of this traditional approach, IRC develops

global programs with corporate management, in close coordination with individual
business units, to place highly durable, locally and globally optimized credit insurance
coverage. We typically rely on capacity from multiple insurers to achieve this goal on
a global scale. While IRC’s aim is to place coverage at reasonable premium levels,
our foremost concern is maximizing coverage for our clients and building the

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foundation for strong and mutually beneficial relationships with insurers that will
withstand market downturns and significant claims activity.
7. Captive Insurance:
Captive insurance companies sometimes use trade credit insurers to reinsure

the policies they issue to affiliated businesses. The credit insurer may issue coverage
directly to the business unit, execute a reinsurance agreement with the captive, and
then cede a portion of the risk and premium back to the captive. This structure is
attractive if the credit insurer is licensed to write coverage in a state or country where
the captive is not. Alternatively, the captive may issue coverage to the business unit
and then buy credit insurance to cover the captive’s exposure above an attachment
point. In both cases, the insurance can be structured in excess layers to help reduce
premium costs and the captive can get the benefit of the credit insurer’s policy text
and services, such as credit limit underwriting and claims processing.
8. Domestic Credit Insurance or Whole Turnover Domestic Credit Insurance:
For sales within a business’ local market, domestic credit insurance covers
against bad debt losses caused by insolvency and/or protracted default for a single
buyer or entire portfolio of receivables (whole turnover). Policies are usually
structured with a first loss of £500-£1,000 and many underwriters are now offering
fixed premiums inclusive of credit limit charges as well as an integral collections
facility.
9. Export Credit Insurance or Whole Turnover Export Credit Insurance:
For international sales, insurance covers various risks including insolvency,

protracted default and political events in the foreign country. Coverage is available
for a single overseas buyer or for an entire portfolio of foreign receivables (whole
turnover).
10. Combined Domestic & Export Credit Insurance:
For businesses trading in the home market as well as exporting abroad. The
breadth of cover is similar to the Whole Turnover Domestic Credit Insurance Policy,
but designed to cover a combination of domestic and export receivables.
11. Pre-Delivery Coverage :
Cover designed for situations where goods are made to order. This type of
policy protects against the insolvency of the buyer and/or political default or political
frustration. May be offered as an independent policy or may be attached to a domestic
or export credit insurance policy.

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12. Specific Account Credit Insurance is a policy designed to cover receivables for a
single customer:
Often the largest account the business has. Cover is often provided for
insolvency only and an “indemnity” can be specified on the credit limit granted -
typically 80-90%.
13. Key Account Credit Insurance:
This type of Credit Insurance policy offers businesses insolvency and

protracted default protection, but only covers a selection of between 2 and 20 of their
largest customers. Key Account policies will usually carry an excess.
Catastrophe Credit Insurance is designed to protect companies with annual

turnover in excess of £10 million and with established and effective credit control
procedures in place. Under such policies, the insurer “underwrites” these credit
control procedures and sets an Annual Aggregate Deductible, in excess of which,
claims are payable. The deductible is usually set at a level of at least £25,000 and
more commonly at £50,000-£100,000.
Global Credit Insurance is designed for multinational companies with trading

centres in several countries. A single credit insurance policy is designed to cost-
effectively cover all the divisions or branches of the business on either a Whole
Turnover or Catastrophe basis depending on the individual requirements. Such
policies allow businesses to ease the burden of high-risk industry sectors or trading
regions by incorporating cover with better established or ‘safer’ regions.

CREDIT INSURANCE
BENEFITS OF CREDIT INSURANCE
Credit insurance provides not only peace of mind to

you, but also the following key benefits:
1) Catastrophic loss protection:
Your receivables are one of your largest and most

at-risk assets. Credit insurance protects against potential
bad debt losses, thus providing a safety net. Click here to
see an actual case study from our client portfolio.
2) Safe sales expansion;
Credit insurance allows you to grow your business without worry. Whether
you are trying to expand credit lines with existing customers, or extend competitive
open credit terms to new accounts, using credit insurance to reduce or eliminate the
risk is a great way to safely grow your business.
3) Increased Borrowing:
Credit insurance can provide cost effective access to working capital that can
help you grow and avoid cash flow crunches. Your credit insurance policy can help
you maximize working capital availability from the receivables you pledge to your
lender. Most ineligible receivables (including concentration of receivables with a few
accounts and foreign receivables) can now be included in your borrowing base with
your lender.
4) Credit Decision support and information on your customers:
When you implement a credit insurance program with Global Commercial

Credit, you are not just buying coverage on your receivables, you are getting a partner
in credit risk management whose goal is to help you avoid credit losses before they
happen and back you up when they do. Credit insurance can also provide you with
valuable market intelligence on the financial viability of your customers (buyers),
and, in the case of buyers in foreign countries, on any trading risks peculiar to those
countries.

CREDIT INSURANCE
5) Allows companies to lower their bad debt reserve;
Credit insurance will allow you to lower your bad debt reserve significantly
and manage write-offs with greater certainty. By reducing the bad debt reserve on this
scale, you will be able to take excess bad debt reserves back into income (by
provisioning significantly less) thus improving earnings, shareholder equity and
financial ratios etc. Credit Insurance premiums are tax deductible (whereas your bad
debt reserve is not).
6) Helps avoid an unexpected significant impact on your company:
For example, you would have to generate a significant amount of future sales
at $0 profit (beyond your normal sales) to make up for a credit loss.

CREDIT INSURANCE
DETERMINING WHY TO BUY CREDIT RISK INSURANCE
Before actually going to the market for quotes, you would be best served by clearly
identifying what your interest in credit insurance is and how you think it will benefit your
company. As a custom tailored financial tool, there are many practical benefits to having this
type of coverage in place. That said, there are also some common misconceptions about what
this type of coverage can be used for.
At the most basic level, credit risk insurance is designed to protect you from
unexpected losses due to the insolvency or past due default on the part of your insured
customers. The limited number of underwriters who specialize in this unique coverage will in
most cases, conduct credit evaluations on the accounts you wish to insure and approve them
for specific credit limits based on your requests and the results of their research. Given this
active credit evaluation on the part of the insurer, credit insurance should not be approached
as a tool you can use to grant credit to companies that don't merit it. Likewise, it should not
be sought when you have an imminent loss that you are looking to shelter.
Credit risk insurance is a proactive management tool that best helps you in the
following specific areas:-
1. Catastrophic loss protection:

Across most industries and companies of all sizes, it is generally true that the
top 20% of accounts represent about 80% of the company's revenue. In some cases,
the concentration of credit exposure among a few or even one key customer is even
greater. Just one sudden, unexpected loss could have a devastating impact on the
business. If you consider that your receivables are a concentration of all of your cost
and your profit, and that, in many cases, you create them based on nothing more than
a customer's promise to pay; you can see that there is a tremendous amount of risk
facing your business. Even with customers you believe are "good as gold", the risk of
unexpected default persists. Credit insurance is a great tool to remove this
catastrophic risk from your balance sheet and cap your company's exposure.
2. Safe sales expansion:

It is not uncommon for customers to request more credit than you are
comfortable giving them, or to have new customers you aren't familiar with seek
meaningful amounts of credit from you. While you may invest in a professional credit
practice to review these requests and manage the exposures, if you are limiting sales
as a result of concern over the risk, credit insurance is an ideal answer. Many
companies use credit insurance to be able to expand on existing credit limits without
having to put them at additional risk. It is also helpful in covering open credit sales to

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new accounts where you might have limited information and sales history. It is worth
pointing out that using your credit insurance policy to support additional sales you
would not have made otherwise will not only allow you to recapture the premium, it
will help you drop additional profit to your bottom line.
3. Credit decision support:

As mentioned earlier, in just about every case, the underwriters on your credit
insurance policy are going to actively research, approve and monitor the accounts you
wish to insure. Having an industry specific financial analyst doing this work for you
as part of your credit risk insurance program adds a lot of expertise to your credit
practice, or provides you, to a certain degree, with an outsourced credit department.
This allows you to focus your internal resources more on cash flow management and
collections work. If you consider the cost of amassing the information resources,
many by costly subscription only, and hiring the additional expert financial analysts,
this decision support alone is worth the typical annual premium. Most companies
operate on the general rule that as long as the customer is paying timely credit
management efforts can be focused elsewhere. Unfortunately, payment history is not
a valid predictor of default. Many companies are current on their bills at the time they
file for bankruptcy protection or are forced into default. Having the carrier watching
your covered accounts and helping you evaluate credit limits on new risks is a great
advantage to the program.
4. Borrowing enhancement:
If the company borrows against its receivables, credit risk insurance can
provide additional protection to the lender so they may be able to enhance the
borrowing arrangements. They do this by increasing the percentage they will advance
against insured accounts, and/or roping more accounts into the borrowing base- large
concentrations, slow payers, export customers, etc. This allows you to maximize the
amount of working capital available from the same pool of receivables. If you're in a
high growth mode and find yourself in need of more working capital, credit insurance
is a great way to resolve the problem.
5. Exporting on open credit:

With more companies sourcing customers outside their own borders, the risk
of granting credit terms has to be balanced against maintaining competitive terms
against other sellers. Export credit risk insurance is one tool you can use to offer
competitive open credit terms without the additional risk.

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6. Before you talk to a specialist in this field, you should take a look at your
business:
The customer base, credit practices, risk appetites, etc. and think about how
you want the policy to go to work for you and where it can bring value. With this
accomplished, you'll be better prepared to have a productive dialog with a specialist
who can help you find the ideal solution.
7. Put option:
A Put Option is an effective tool to help you continue to sell to a buyer(s)
representing significant credit risk concerns or deal with a concentration issue with an
investment grade customer. With the risk removed from your balance sheet, you are
able to continue with the relationship until the credit risk improves or it no longer
represents a concentration issue allowing you to realize your original revenue
projections and / or increase market-share. It can also help you maximize borrowing
availability under your existing bank line.
This program involves a non-cancellable contract whereby the option seller
agrees to buy qualifying accounts receivable at a pre-determined amount if your
protected customer(s) goes Insolvent during the contract period. The protection would
be provided by a financially strong counterparty.

CREDIT INSURANCE
UNDERSTANDING CREDIT INSURANCE
Credit insurance is just that – insurance. Like any form of insurance, credit insurance
is there to protect the insured customers. And again, as with any insurance, there are limits to
what can be insured.
It would not be surprising if an auto insurer refused to insure an unlicensed driver, nor
would we blink an eye if coverage was pulled on a previously licensed driver who lost his
eyesight. The auto insurance company would simply be making prudent, common sense
cover decisions based on the risk profile of the potential drivers. These decisions would help
the customer avoid unacceptable risks. Even an increase in premiums would not change the
fact that the very high risk of an accident occurring should these drivers get behind the wheel
of a car makes these drivers are uninsurable.
This is essentially what credit insurers do on a regular basis. Analyse the risk that a
buyer will not pay for the purchases it makes on credit and guide its customers away from
those buyers that are likely to fall into this high risk category. In the current economic
climate however, they are finding it necessary to help their customers avoid unnecessary risks
by reducing cover on potential buyers more often.
There is an analogy with credit insurance. The economic landscape changes

constantly and, during a downturn such as the current one, the changes are rapid and
precipitous. Credit insurers therefore have to review their portfolio of risks, and withdraw
cover on those buyers who have gone beyond the tipping point from insurable to uninsurable
risk.
In terms of total portfolio, the number of withdrawals of cover is very small – a single
figure percentage, and focused on an even smaller proportion of companies (that is to say, a
number of withdrawn limits will apply to a single risk). At radius has maintained cover on
the vast majority of risks, providing invaluable cover and a financial safety net in the current
economic downturn.
Just like the prudent motor insurer, credit insurers have a responsibility to guide their
customers away from unacceptable risks and not simply cover every transaction, however
perilous, as always, credit insurers are simply doing their job.
There are numerous examples of credit insurers maintaining cover for their
customers’ trade way beyond the early signs of a buyer’s impending demise. Credit insurers
withdraw cover on buyers only as a last resort.
What’s more, credit insurers are just that – insurers – and not finance houses. It isn’t
their role to shore up ailing or failing businesses: that may be the job of those businesses’
banks or investors, but not of a credit insurer whose customers have chosen to trade with
those businesses. The credit insurer is there to protect its customers balance sheets by
guiding the customer towards good risks and discouraging them from entering sales with

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buyers considered to be bad risks. When the credit insurer does insure a transaction that ends
in default it reimburses its customer to the amount agreed upon in the terms of their insurance
contract.
And, if there is the risk of cover being withdrawn, buyers can help themselves by
keeping their lines of communication with credit insurers open.
While, in relatively benign economic times, credit insurers may be willing to make
some assumptions about a buyer’s financial status, in the current climate it has become
necessary to look more closely at a buyer’s books in order to assess the risk. A credit insurer
is unlikely to insure a risk it cannot analyse. While it is no guarantee of credit insurance
coverage, buyers can increase the likelihood of maintaining cover and favourable credit terms
from their suppliers by opening their books to credit insurers. Some buyers may perceive a
credit insurers request for up-to-date financial information as a hunt for reasons to pull cover.
To the contrary it is a search for reasons not to withdraw cover.
 Credit Insurance Underwriters:
Credit insurance providers consist mainly of banks, private insurance

companies and even capital funding companies. They offer credit insurance either as a
main product or a component of other products and services. Today, the biggest credit
insurance companies were formed through mergers, acquisitions or consolidations of
smaller insurance firms or buying out the credit insurance segment of other companies
who changed their business focus.
London’s pre-eminence as a world finance and trade centre has resulted in the
most sophisticated and competitive trade credit insurance market. All the underwriters
listed below continue to be rated by agencies such as Moody’s and Standard & Poor’s
at an investment grade level and provide a the range of credit insurance policies
outlined in this site to protect the seller against most of the risks that cause payments
to fail.
 Market Structure:
The three biggest credit insurance companies in the world today account for a
hefty 85% of the total global insurance market. They are Atradius, Coface and Euler
Hermes:
o Euler Hermes is considered as the world's biggest credit insurer. It was formed
when Allianz SE of Germany was acquired by Assurance Generales de France
(AGF) in 2002. Euler Hermes has 53 subsidiaries around the world and
maintains its headquarters in Rue de Richelieu in Paris.

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o Atradius is the second largest credit insurer and was formed when two leading
international credit insurance providers NCM and Gerling Credit Insurance
Group merged in 2001. The resulting company was renamed Atradius in 2004.
Core products include credit insurance, export credit insurance and installment
credit protection, among others.
o The third biggest credit insurance underwriter, Compagnie Francaised'

Assurance pour le Commerce Exterieur (COFACE), was originally an export
credit agency founded in 1946 and eventually became the credit insurance arm
of the banking group Natixis. COFACE offers export credit insurance and
accounts receivables management and currently has presence in 93 countries.
However, UK Credit Insurance Ltd work with all the major credit insurance
providers as each have specialisms that may best match a business’ requirements. By
assessing the product offerings of all our underwriters, we are able to recommend the
best solution for clients’ needs.
Most policies from our underwriters are written on a whole turnover basis
covering all the debtors, however cover is available on a variety of different structures
and we will be happy to guide you through the options. We have highlighted areas
which we feel differentiate each of the listed underwriters, but we have not attempted
to list all the classes of risk they will cover. Click on the underwriter name below to
take you through to their specific page or contact us for a full appraisal of your
requirements

CREDIT INSURANCE
REASONS FOR FAST GROWING CREDIT INSURANCE

SECTOR
Credit Insurance is growing at a fast pace. There are various reasons for the boom of
this sector, but the main reasons are the financial help provided by banks and various other
financial agencies to exporters in their day to day business activities.
The two main products which actually encourage trade credit insurance are–
a) Pre shipment credit and

b) Post shipment credit.
These are the financial help provided by banks and various other financial institutions
so that the exports are at an ease. This helps the exporters to carry out their exporting
function. To back these exports by a surety of return, many insurance company provide the
traders with Credit Insurance.
a. Pre-Shipment Credit:
Pre Shipment credit is issued by a financial institution when the seller wants
the payment of the goods before shipment. 'Pre-shipment' means any loan or advance
granted or any other credit provided by a bank to an exporter for financing the
purchase, processing, manufacturing or packing of goods prior to shipment, on the
basis of letter of credit opened in his favour or in favour of some other person, by an
overseas buyer or a confirmed and irrevocable order for the export of goods from
India or any other evidence of an order for export from India having been placed on
the exporter or some other person, unless lodgement of export orders or letter of credit
with the bank has been waived.
The main objectives behind pre-shipment credit or pre export finance are to
enable exporter to:
 Procure raw materials.
 Carry out manufacturing process.
 Provide a secure warehouse for goods and raw materials.
 Process and pack the goods.
 Ship the goods to the buyers.

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 Meet other financial cost of the business.
Types of Pre Shipment credit:
 Packing Credit
 Advance against cheques/draft etc. representing Advance Payments.
1) Packing Credit:
This facility is provided to an exporter who satisfies the following

criteria:
 A ten digit importer exporter code number allotted by DGFT.
 Exporter should not be in the caution list of RBI.
 If the goods to be exported are not under OGL (Open General

License), the exporter should have the required license /quota permit to
export the goods.
Packing credit facility can be provided to an exporter on production of

the following evidences to the bank:
 Formal application for release the packing credit with undertaking to

the effect that the exporter would be ship the goods within stipulated
due date and submit the relevant shipping documents to the banks
within prescribed time limit.
 Firm order or irrevocable L/C or original cable / fax / telex message

exchange between the exporter and the buyer.
 License issued by DGFT if the goods to be exported fall under the

restricted or canalized category. If the item falls under quota system,
proper quota allotment proof needs to be submitted.
The confirmed order received from the overseas buyer should reveal
the information about the full name and address of the overseas buyer,
description quantity and value of goods (FOB or CIF), destination port and the
last date of payment.

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2) Advance against Cheque/Drafts received as advance payment:
Where exporters receive direct payments from abroad by means of

cheques/drafts etc. the bank may grant export credit at concessional rate to the
exporters of goods track record, till the time of realization of the proceeds of
the cheques or draft etc. The Banks however, must satisfy themselves that the
proceeds are against an export order.
b. Post-Shipment Credit:
Post Shipment Finance is a kind of loan provided by a financial institution to

an exporter or seller against a shipment that has already been made. This type of
export finance is granted from the date of extending the credit after shipment of the
goods to the realization date of the exporter proceeds. Exporters don’t wait for the
importer to deposit the funds.
Types of Post Shipment Finance:
The post shipment finance can be classified as:
 Export Bills purchased/discounted.
 Export Bills negotiated
 Advance against export bills sent on collection basis.
 Advance against export on consignment basis
 Advance against undrawn balance on exports
 Advance against claims of Duty Drawback.

CREDIT INSURANCE
1) Export Bills Purchased/ Discounted. (DP & DA Bills):
Export bills (Non L/C Bills) is used in terms of sale contract/ order
may be discounted or purchased by the banks. It is used in indisputable
international trade transactions and the proper limit has to be sanctioned to the
exporter for purchase of export bill facility.
2) Export Bills Negotiated (Bill under L/C):
The risk of payment is less under the LC, as the issuing bank makes
sure the payment. The risk is further reduced, if a bank guarantees the
payments by confirming the LC. Because of the inborn security available in
this method, banks often become ready to extend the finance against bills
under LC.
However, this arises two major risk factors for the banks:
 The risk of non-performance by the exporter, when he is unable to

meet his terms and conditions. In this case, the issuing banks do not
honor the letter of credit.
 The bank also faces the documentary risk where the issuing bank
refuses to honour its commitment. So, it is important for the
negotiating bank, and the lending bank to properly check all the
necessary documents before submission.
3) Advance against Export Bills Sent on Collection Basis:
Bills can only be sent on collection basis, if the bills drawn under LC
have some discrepancies. Sometimes exporter requests the bill to be sent on
the collection basis, anticipating the strengthening of foreign currency.
Banks may allow advance against these collection bills to an exporter

with a concessional rates of interest depending upon the transit period in case
of DP Bills and transit period plus usance period in case of usance bill.
The transit period is from the date of acceptance of the export

documents at the bank’s branch for collection and not from the date of
advance.

CREDIT INSURANCE
4) Advance against Export on Consignments Basis:
Bank may choose to finance when the goods are exported on

consignment basis at the risk of the exporter for sale and eventual payment of
sale proceeds to him by the consignee.
However, in this case bank instructs the overseas bank to deliver the
document only against trust receipt /undertaking to deliver the sale proceeds
by specified date, which should be within the prescribed date even if
according to the practice in certain trades a bill for part of the estimated value
is drawn in advance against the exports.
In case of export through approved Indian owned warehouses abroad

the times limit for realization is 15 months.
5) Advance against Undrawn Balance:
It is a very common practice in export to leave small part undrawn for

payment after adjustment due to difference in rates, weight, quality etc. Banks
do finance against the undrawn balance, if undrawn balance is in conformity
with the normal level of balance left undrawn in the particular line of export,
subject to a maximum of 10 percent of the export value. An undertaking is
also obtained from the exporter that he will, within 6 months from due date of
payment or the date of shipment of the goods, whichever is earlier surrender
balance proceeds of the shipment.
6) Advance against Claims of Duty Drawback:
Duty Drawback is a type of discount given to the exporter in his own

country. This discount is given only, if the in-house cost of production is
higher in relation to international price. This type of financial support helps
the exporter to fight successfully in the international markets.
In such a situation, banks grants advances to exporters at lower rate of

interest for a maximum period of 90 days. These are granted only if other
types of export finance are also extended to the exporter by the same bank.
After the shipment, the exporters lodge their claims, supported by the
relevant documents to the relevant government authorities. These claims are
processed and eligible amount is disbursed after making sure that the bank is
authorized to receive the claim amount directly from the concerned
government authorities.

CREDIT INSURANCE
REASONS TO HAVE CREDIT INSURANCE
Companies arrange Credit Insurance policies to protect themselves against the

potentially disastrous effects of accounts. However, an insurance quote can also provide
various additional benefits and besides bad debt insurance.
Credit Insurance is important for many businesses, it might mean the difference
between your online business surviving a bad-debt, as well as joining that long listing of
names appearing in this Liquidator files.
Credit Insurance (sometimes referred to as Trade Credit Insurance) provides a safety

net so you know that a customer goes into insolvency you happen to be covered for any
expenses outstanding.
There are various types of policy available which can be tailored to your individual
particular requirements. Whether you would like to Credit Insure your entire customer base
or perhaps require Credit Insurance coverage to provide information and security on your
own export debts, you're Credit rating Insurance adviser is friends and family placed to
negotiate a Trade Credit Insurance policies that is best for you.
Credit Insurance often lets you choose the companies you require to have cover
regarding. Will probably be starting a particularly substantial project and be investing all his
time, capital and risk into this, this means you will probably want to pay your business for
how much risk you are shown to your Specialist Broker are appropriate with you in collating
some details about previous bad debt history plus your customer profile. This is essential to
enable us to get to know your business as understanding your company issues and asking far
better questions will enable us to provide better answers from credit rating insurers.

CREDIT INSURANCE
IMPORTANCE OF CREDIT INSURANCE IN NATIONAL AND

INTERNATIONAL BUSINESS
The decisions made by a credit insurer influence the business of many parties. By
granting cover, credit transactions are made possible. By declining or withdrawing credit
insurance facilities, suppliers’ businesses are curtailed and buyers’ businesses may be forced
into liquidation. The wrong decision by the credit insurer may lead to overtrading or loss of
business with the concomitant negative effects on the micro and macro economy. Many
export transactions would not take place without credit insurance. Credit insurance helps in
channelling limited resources towards worthwhile and healthy enterprises; it promotes the
earning of foreign exchange and thereby effects job creation.
Internationally, credit insurance is often used for political purposes. By underwriting

major capital goods/services projects, the economy of the importing country can be
significantly influenced (e.g. Lesotho Highlands Water Scheme or the Mozal aluminium
smelter project in Mozambique). The withholding of credit insurance facilities can be used to
send a political message to the applying (importing) country. Through its international
associations, 39 credit insurers have a considerable influence on international credit terms
and conditions. Thus the credit insurer’s activities influence the national economy and can
play an important role in international relations. The credit insurer’s indemnity has not
infrequently saved policyholders’ businesses which would otherwise have been forced into
insolvency.

CREDIT INSURANCE
PRACTICING OF CREDIT INSURANCE
Credit insurance is usually underwritten by comparatively small mono-line insurance

companies (as opposed to the large multi-line insurers) due to its specialized nature. Credit
underwriting is not done actuarially but on an individual risk assessment basis. The
International Credit Insurance and Surety Association and the Berne Union.
This class of business is presently available in 72 countries40 with between one and
three credit insurers per country. Most credit insurers writing domestic and short-term export
business (see below for a description of the credit insurance products) are privately owned,
some of the large European companies being listed. Government departments mainly conduct
medium-/long-term capital goods/services export credit insurance or this business is
supported via re-insurance facilities from government.
The reasons for government involvement are:
a) The long credit terms (up to and in excess of 10 years) for which it is often impossible
to obtain re-insurance in the private market.
b) Government’s desire to promote exports, particularly of large projects and
c) The political implications of such business.

CREDIT INSURANCE
THE CREDIT INSURANCE PRODUCT
1. Domestic credit insurance:
This type of insurance provides cover against a loss caused by the non-receipt
of payment of amounts due and payable as a result of the sale of goods or services by
a seller (the policyholder) in one country to a buyer (the risk) situated in the same
country. The payment terms will usually not exceed 6 months and the insurance
normally incepts immediately after delivery.42 Non-receipt of payment must be due
to the buyer’s insolvency (or deemed insolvency) or protracted default.
2. Short-term export credit insurance:
Exporters selling goods or services on short credit terms (not exceeding 12

months from date of shipment) can purchase export credit insurance, which provides
for an 40 Credit insurers exist in almost all developed and developing countries.
Underdeveloped countries’ economies usually do not lend themselves to writing this
business on a profitable basis because demand for the service in such countries is
generally non-existent or very low. Although other types of specialized policies and
specifically designed covers are available from some credit insurers, this report will
confine itself to ethical issues relating to the described products. Credit insurance
usually incepts when the seller loses control over the goods – not withstanding that
the sales contract may incorporate a transfer of ownership clause, providing that
ownership of the goods passes only to the buyer on receipt of payment by the seller.
Indemnity of a bad debt loss emanating from the sale of goods or services by the
exporter to an importer. Cover comes into effect as soon as the exporter loses control
over the goods – usually on loading of the goods on board a ship/aircraft or when the
goods have been sealed into a container. In addition to covering losses resulting from
the insolvency or protracted default of the importer, an export policy can also
indemnify in cases of repudiation or political causes of loss.
3. Medium-/long-term contracts cover:
Policies of this nature are specifically designed to credit insure a particular

transaction involving the export of capital goods/services43 on medium (1 to 5 years)
or long (5 to10 years) credit terms plus an additional pre-shipment/delivery period44
depending on the terms of the export contract. In addition to the causes of loss
covered under a short term export credit insurance policy, these types of policies can
also provide for indemnities against foreign exchange risks and certain other possible
losses. Projects sold on such credit terms are usually very large and as it is impossible
for an exporter to carry such a substantial credit on his books for the long period
involved, credit insurance is vital because it allows the exporter to lay off or sell the

CREDIT INSURANCE
credit risk and refinance himself. There are two methods that are internationally used
for this purpose:
a. Supplier’s credit, which means that the exporter obtains promissory notes
from the importer for the purchase price, which notes fall due in six monthly
instalments over the agreed credit period (usually not longer than 5 years). The
payment risk inherent in these promissory notes is credit insured and that
enables the exporter to sell the notes (together with the credit insurance cover)
to a bank on completion of the project and so receive cash for the export
project on final delivery.
b. Financial credit, which entails the importer entering into two contracts, the
export contract with the exporter and a loan agreement with a financial
institution. The importer will draw down the loan by instructing the financial
institution to pay the exporter in cash against completion certificates.
Capital goods/services refer to such items as major machinery/equipment,

construction or building contracts, technical installations, infrastructure projects etc.
A pre-shipment/delivery period is the construction, manufacturing or building period
before the project is handed over in whole or in part to the purchaser. Normally only
be prepared to provide such loans provided the repayment risk is credit insured.
Credit insurance is usually written on the basis of co-insurance. This means

that the insurer does not cover 100% of a loss so that the policyholder always retains
some interest in the risk, inducing him to handle credit giving with care even though
he carries insurance. The uncovered portion of the debt can be anything between 5%
and 50%

CREDIT INSURANCE
TYPES OF CREDIT INSURANCE
There are mainly 4 types of credit insurance, which are briefly discussed in the
following lines.
1. Credit life insurance:
This insurance policy helps to pay the outstanding debt owed on your card at
the time of your death. However, the company creditor needs to be the beneficiary of
the policy.
2. Credit disability insurance:
This particular credit insurance is helpful in protecting your credit ratings by

making the minimum monthly payment that is due on your card. After you become
disabled, the insurance company pays the minimum amount due on your card for
some months. However, it doesn’t cover any new purchases that you make after
becoming disabled.
3. Credit involuntary unemployment insurance;
It pays the minimum amount that is due on your account if you are downsized
or laid off for a specific period. Usually, there is a set time period for making the
payments. The insurance doesn’t include any additional purchases after you become
unemployed.
4. Credit property insurance:
Usually this policy comes with your credit card or mortgage. It makes the
payment for any purchased item, which gets destroyed or stolen. You can claim this
insurance only if it satisfies the conditions for coverage that are listed by the insurance
company.
How credit insurance benefits debtors:
Credit insurance helps the debtor in many ways that are listed below:
 Covers the outstanding balance on your credit when you die

 Provides coverage on your minimum monthly payments if you become disabled
 Protects your credit rating by covering your dues
 Provides coverage on your minimum monthly payments if you lose your job
 Covers your purchased items that get destroyed in specific incidents

CREDIT INSURANCE
CHALLENGES FACED BY INSURANCE INDUSTRY
 Threat of New Entrants:
The insurance industry has

been budding with new entrants every
other day. Therefore the companies
should carve out niche areas such that
the threat of new entrants might not be
a hindrance. There is also a chance that
the big players might squeeze the small
new entrants.
 Power of Suppliers:
Those who are supplying the capital are not that big a threat. For instance, if
someone as a very talented insurance underwriter is presently working for a small
insurance company, there exists a chance that any big player willing to enter the
insurance industry might entice that person off.
 Power of Buyers:
No individual is a big threat to the insurance industry and big corporate houses
have a lot more negotiating capability with the insurance companies. Big corporate
clients like airlines and pharmaceutical companies pay millions of dollars every year
in premiums.
 Availability of Substitutes:
There exist a lot of substitutes in the insurance industry. Majorly, the large
insurance companies provide similar kinds of services – be it auto, home, commercial,
health or life insurance.
 The consumers as well as the investors should only focus on the insurer's financial
strength and capability to meet on-going responsibilities to its policyholders.
 The fundamentals of the insurance company should be strong and should not indicate
a poor investment opportunity as this might also deter growth.

CREDIT INSURANCE
TRADE CREDIT INSURANCE
Credit insurance covers non-payment of enforceable domestic and foreign accounts

receivable obligations. It may also cover pre-shipment credit exposure. Cover is available for
sales made on open account, letter of credit, sight/time draft, and cash against documents
terms. Repayment tenors of up to 180 days can be insured for the sale of non-capital goods
and 5 to 7 years for the sale or lease of capital goods or for project finance.
Companies use credit insurance to:
 Increase market share through the extension of open terms
 Facilitate accounts receivable or payable finance
 Facilitate direct bank financing to end-customers
 Mitigate risk and protect the balance sheet
 Obtain third-party feedback on obligor, industry, and country risks
 Increase leverage on obligors in default
 Increase confidence among investors, analysts, and banks
Financial institutions also buy credit insurance. These policies cover purchased or
factored receivables or notes, letter of credit confirmations, and structured accounts payable
or vendor finance facilities.
Obligors are underwritten for insured credit limits either by the insurer or under the
insured’s discretionary credit authority. Some insurers write limits on a non-cancellable basis
while others reserve the right to cancel or reduce coverage at any time. Because insurance is
intended to cover unexpected loss, distressed obligors are usually excluded. Certain other
risks are also excluded, notably disputed payment obligations and nuclear-related perils.
Structurally, credit insurance requires the insured to retain some portion of the risk
through co-insurance and/or deductible. Generally, higher risk retention yields lower
premiums and increases the incentive for underwriters to cover marginal credits. Some
insurers write single-debtor policies, but most insurers prefer to write portfolio (multi-debtor)
coverage where the enhanced spread of risk can help the insured reduce premium and obtain
protection on marginal credits. Other policy structure concepts include:
 Select-risk cover

CREDIT INSURANCE
 Whole-turnover cover
 Key Account Cover
 Catastrophic Cover
 First-Loss (Ground-Up) Cover
 Excess-of-Loss Cover
 Multi-Insurer Syndication
 Global Programs

CREDIT INSURANCE
NEED FOR TRADE CREDIT INSURANCE
Payments for exports are open to risks even at the best of times. The risks have
assumed large proportions today due to the far-reaching political and economic changes that
are sweeping the world. An outbreak of war or civil war may block or delay payment for
goods exported. A coup or an insurrection may also bring about the same result. Economic
difficulties or balance of payment problems may lead a country to impose restrictions on
either import of certain goods or on transfer of payments for goods imported. In addition, the
exporters have to face commercial risks of insolvency or protracted default of buyers. The
commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are
aggravated due to the political and economic uncertainties. Export credit insurance is
designed to protect exporters from the consequences of the payment risks, both political and
commercial, and to enable them to expand their overseas business without fear of loss.
Credit Insurance / Trade Credit Insurance policies are required by Companies to guard
themselves against the potentially disastrous effects of bad debts. However, a policy can also
guarantee a range of additional benefits rather than just bad debt insurance.
Credit Insurance / Trade Credit Insurance policies also offer you usage of unique,
continually updated, financial information on both new and existing customers, meaning you
are able to do business with Confidence.
Credit Insurance / Trade Credit Insurance is imperative for lots of businesses, it could
possibly mean the main difference between your company surviving a bad-debt, or joining
that long list of names appearing within the Liquidators files.
Credit Insurance (sometimes known as Trade Credit Insurance) provides a safety net
to ensure you know any time a customer goes into insolvency you can be covered for any
payments outstanding.
It truly is impossible to predict what’s going to happen towards your customers and
you do not know what situation other businesses you trade with are typically in. Credit
Insurance offers you protection for situations which are out of your hands but can have
actually a massive influence onto your company.
Tailored for your businesses needs
There are many varieties of policy available that may be tailored to all your own
particular requirements. Whether you intend to apply Credit Insurance / Trade Credit
Insurance to your whole customer base or merely need a Credit Insurance policy / Trade
Credit Insurance policy to produce information and security on your export debts, you’re
Credit Insurance adviser is ideally placed to negotiate a Credit Insurance / Trade Credit
Insurance policy that meets your needs.

CREDIT INSURANCE
Credit Insurance / Trade Credit Insurance often enable you to pick the companies that
you want to obtain cover for. You could just be starting a really large project and be investing
time, capital and risk with it, therefore you will probably want to cover your business for how
much risk you have to face.
If your company trades overseas or works with the export market you may make the
most of Credit Insurance / Trade Credit Insurance that covers your specific situation. For
example, you may need to secure Political Risk Insurance that will cover you when a
government changes a law that features a negative affect what you can do to trade.
It will cost you nothing, besides ten minutes of your time, to arrange a quote for
Credit Insurance / Trade Credit Insurance through your own broker, although the response of
so many Senior Directors / Business Owners is ” I do not possess 10 mins to spare”, you’ll
have considerably longer than that in case your business stopped trading because of a bad
debt!
Your Specialist Broker will work together with you in collating some details
associated with previous bad debt background and your customer profile. This action is
important allow us to begin to know your organisation as understanding your company issues
and asking better questions will enable us to supply better

CREDIT INSURANCE
IT’S IMPORTANCE IN TODAY’S BUSINESS WORLD
Companies arrange Credit Insurance policies to protect themselves contrary to the

potentially disastrous effects of bad debts. Even so, a policy can also provide a selection of
additional benefits and not merely bad debt insurance.
Credit Insurance is truly essential for many businesses, it might mean the difference
between your corporation surviving a bad-debt, or even joining that long report on names
appearing in the Liquidators files.
Credit history Insurance (sometimes generally known as Trade Credit Insurance)

provides a safety net so you know whether a customer goes into insolvency you are covered
for any payments outstanding.
There are lots of types of policy available that can be tailored to your individual
particular requirements. Whether you want to Credit Insure your entire customer base or to
require a Credit Insurance cover to provide information and security on your own export
debts, you're Credit history Insurance adviser is ideally placed to negotiate a Trade Credit
Insurance cover that is meets your needs.
Credit Insurance often allows you to choose the companies you require to have cover
intended for. There's a chance you're starting a particularly great project and be investing
major time, cash and risk into the item, therefore you will probably want for your business for
as much risk you are exposed to
Your Specialist Broker will continue to work with you in collating some details
concerning previous bad debt history whilst your customer profile. Using this method is
essential to enable us to get at know your business as understanding your business issues and
asking superior questions will enable us to produce better answers from credit history
insurers.
There's no extra cost in your business by going via an expert broker as they are paid
by the Insurance Company direct, and they also can often negotiate deals that you simply
would not be in a position to obtain by going direct.
Your Specialist broker can also be much more experienced in guiding you with the
claims process before you submit them to make certain everything runs smoothly.
So take your next step and arrange for your no-obligation quotation from the broker
today - staying "too busy" won't save your business - do the item today!
In our climate what survival guarantees does your small business have?
John Beddows is often a Trade Credit Insurance Specialized with Rycroft Associates -
"Advising Businesses throughout the U. K"

CREDIT INSURANCE
CREDIT INSURANCE IN INDIA
Credit insurance takes care of the risk of payment of the organizations and not of the
individuals. To get insured, the holders of the policy should have a credit limit on each of the
buyers. For Credit insurance, the rate of premium is kept low. It combines both Credit Life
Insurance and Trade Credit Insurance.
Credit insurance involves trade with a single buyer. The concept of this insurance was
first incepted in the nineteenth century. During the time of first and second World Wars, the
idea was conceived in the Western Europe. The various companies that were developed
during this time offered credit insurance to the individuals.
If the borrower of the loan dies or gets disabled then the insurance will pay the loan
off. Trade Credit Insurance covers the risk of the payment during the time of delivery of
services and goods. Private individuals are not provided with the facilities of this product.
Premium is charged monthly against the issuance of the credit insurance. This
insurance is a business driven by broker, who helps in the creation of market competition
among the policy holders for better premium and policy wordings.
Credit Insurance is the best way to manage credit risk in a cost effective way for any
organization. It provides financial assistance during the time of any credit risks and overdue
payments during domestic trade or exports. Before granting covers for the insurance various
terms and conditions need to be fulfilled.
Credit insurance is one of the important types of insurance that covers risk against the
following:
 Trade Receivables
 Portfolio
 Business-to-Business Transactions
 Short Term Credit Risk
Credit insurance offers a number of benefits, which are available in the form of:
 Risk Mitigation
 Efficient collection of debts
 Complements credit management of the seller

CREDIT INSURANCE
 Enables development of new markets against protection provided
 Expert advice since buyers are analyzed for credit worthiness
The major Credit Insurance providers in India are ICICI Lombard and The New India
Assurance.
Highlights of the India Company scenario:
1. India has 52 billionaires in 2009 as the Forbes report. This is with all courtesy to the
improvement in the India company situation.
2. India has been stated as the world's fastest growing wealth creator, all thanks to a
vibrant stock market and higher earnings from the strata of Indian companies.
3. The number of top companies in India has outshone their performances in terms of net
profit in just six months of the start of the fiscal year. This depicts a fast growth in
corporate earnings.
Insurance company:
Is due to globalization, deregulation and also terrorist attacks; that the insurance
industry is undergoing a massive change and the metamorphosis has been noteworthy in the
last few decades.
 Clearing basics:
Before we begin the analysis of Indian insurance industry, let us clear some
basics on insurance.
o In the words of a layman, insurance means managing risk. For instance, in life
insurance segment, the insurance company tries to manage mortality (death)
rates among the wide array of clients.
o The insurance company works in a manner by collecting premiums from

policy holders, investing the money (usually in low risk investments), and then
reimbursing this same money once the person passes away or the policy
matures. The greater the probability for a person to have a shorter life span
than the average mark, the higher premium that person has to pay. The case is
the same for all other types of insurance, including automobile, health and
property.

CREDIT INSURANCE
o Ownership of insurance companies is of two types:
 Shareholder ownership
 Policyholder ownership
o Types of Insurance:
 Life Insurance: Insurance guaranteeing a specific sum of money to a

designated beneficiary upon the death of the insured, or to the insured
if he or she lives beyond a certain age.
 Health Insurance: Insurance against expenses incurred through illness

of the insured.
 Liability Insurance: This insures property such as automobiles,

property and professional/business mishaps.

CREDIT INSURANCE
EXPORT CREDIT GUARANTEE CORPORATIONOF INDIA LIMITED

(ECGC)
Introduction:
The Export Credit Guarantee Corporation of India Limited (ECGC) is a company wholly
owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance
support to Indian exporters and is controlled by the Ministry of Commerce. Government of India had
initially set up Export Risks Insurance Corporation (ERIC) in July 1957. It was transformed into
Export Credit and Guarantee Corporation Limited (ECGC) in 1964 and to Export Credit Guarantee of
India in 1983.
History:
ECGC of India Ltd was established in July, 1957 to strengthen the export promotion
by covering the risk of exporting on credit. It functions under the administrative control of the
Ministry of Commerce & Industry, Department of Commerce, and Government of India. It is
managed by a Board of Directors comprising representatives of the Government, Reserve
Bank of India, banking, and insurance and exporting community.
ECGC is the fifth largest credit insurer of the world in terms of coverage of national
exports. The present paid-up capital of the company is Rs.900 crores and authorized capital
Rs.1000 crores.
Workings of ECGC:
 Provides a range of credit risk insurance covers to exporters against loss in export of
goods and services.
 Offers guarantees to banks and financial institutions to enable exporters to obtain

better facilities from them.
 Provides Overseas Investment Insurance to Indian companies investing in joint

ventures abroad in the form of equity or loan.

CREDIT INSURANCE
Aids of ECGC in Credit Risk;
a) Offers insurance protection to exporters against credit risks
b) Provides guidance in export-related activities
c) Makes available information on different countries with its own credit ratings
d) Makes it easy to obtain export finance from banks/financial institutions
e) Assists exporters in recovering bad debts
f) Provides information on credit-worthiness of overseas buyers.
It’s Need:
Payments for exports are open to risks even at the best of times. The risks have
assumed large proportions today due to the far-reaching political and economic changes that
are sweeping the world. An outbreak of war or civil war may block or delay payment for
goods exported. A coup or an insurrection may also bring about the same result. Economic
difficulties or balance of payment problems may lead a country to impose restrictions on
either import of certain goods or on transfer of payments for goods imported. In addition, the
exporters have to face commercial risks of insolvency or protracted default of buyers. The
commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are
aggravated due to the political and economic uncertainties. Export credit insurance is
designed to protect exporters from the consequences of the payment risks, both political and
commercial, and to enable them to expand their overseas business without fear of loss.
Cooperation agreement with MIGA (Multilateral Investment Guarantee Agency) an

arm of World Bank. MIGA provides:
 Political insurance for foreign investment in developing countries.
 Technical assistance to improve investment climate.
 Dispute mediation service.

CREDIT INSURANCE
Notable Records:
 Largest Policy – short term Rs.450 crores
 Largest database on buyers- 8 lakhs
 Largest credit limit- Rs.80 Crores
 Largest claim paid- Rs.120 crores
 Quickest claim paid- 2 days
 Highest compensation-Iraq Rs 788 Crores
On 31.3.2012 ECGC has achieved a magical milestone of Rs.1000 Crores of premium

income......well deserved achievement by the efforts put in by all the officers of the
Corporation. Thanks are due to the parent ministry officials, Export Customers and all
Nationalised and other private Banks.....
ECGC now offers various products for the exporters and bankers. If readymade
products are NOT suited to an exporter/banker then ECGC designs tailor made products.

CREDIT INSURANCE
ECGC Product:
1. SCR or Standard Policy:
Shipments (Comprehensive Risks) Policy, commonly known as the Standard

Policy, is the one ideally suited to cover risks in respect of goods exported on short-
term credit, i.e. credit not exceeding 180 days. This policy covers both commercial
and political risks from the date of shipment. It is issued to exporters whose
anticipated export turnover for the next 12 months is more than Rs.50 lacs. (The
appropriate policy for exporters with an anticipated turnover of Rs.50 lacs or less is
the Small Exporter's Policy, described separately).
The risks covered under the Standard Policy:

Under the Standard Policy, ECGC covers, from the date of shipment, the
following risks:
a. Commercial Risks:
 Insolvency of the buyer.
 Failure of the buyer to make the payment due within a specified

period, normally four months from the due date.
 Buyer's failure to accept the goods, subject to certain conditions.
b. Political Risks:
 Imposition of restriction by the Government of the buyer's country or

any Government action, which may block or delay the transfer of
payment made by the buyer.
 War, civil war, revolution or civil disturbances in the buyer's country.

New import restrictions or cancellation of a valid import license in the
buyer's country.
 Interruption or diversion of voyage outside India resulting in payment

of additional freight or insurance charges which cannot be recovered
from the buyer.
 Any other cause of loss occurring outside India not normally insured
by general insurers, and beyond the control of both the exporter and
the buyer.

CREDIT INSURANCE
2. Small Exporters Policy:
The Small Exporter's Policy is basically the Standard Policy, incorporating

certain improvements in terms of cover, in order to encourage small exporters to
obtain and operate the policy. It is issued to exporters whose anticipated export
turnover for the period of one year does not exceed Rs.50 lacs.
In what respects is the Small Exporter's Policy different from the Standard Policy:
 Period of Policy: Small Exporter's Policy is issued for a period of 12 months,

as against 24 months in the case of Standard Policy.
 Minimum premium: Premium payable will be determined on the basis of

projected exports on an annual basis subject to a minimum premium of Rs.
2000/- for the policy period.
No claim bonus in the premium rate is granted every year at the rate of
5% (as against once in two years for Standard Policy at the rate of 10%).
 Declaration of shipments: Shipments need to be declared quarterly (instead

of monthly as in the case of Standard Policy).
 Declaration of overdue payments: Small exporters are required to submit

monthly declarations of all payments remaining overdue by more than 60 days
from the due date, as against 30 days in the case of exporters holding the
Standard Policy.
 Percentage of cover: For shipments covered under the Small Exporter's

Policy ECGC will pay claims to the extent of 95% where the loss is due to
commercial risks and 100% if the loss is caused by any of the political risks
(Under the Standard Policy, the extent of cover is 90% for both commercial
and political risks).
 Waiting period for claims: The normal waiting period of 4 months under the
Standard Policy has been halved in the case of claims arising under the Small
Exporter's Policy.

CREDIT INSURANCE
 Change in terms of payment of extension in credit period: In order to

enable small exporters to deal with their buyers in a flexible manner, the
following facilities are allowed:
o A small exporter may, without prior approval of ECGC convert a D/P

bill into DA bill, provided that he has already obtained suitable credit
limit on the buyer on D/A terms.
o Where the value of this bill is not more than Rs.3 lacs, conversion of
D/P bill into D/A bill is permitted even if credit limit on the buyer has
been obtained on D/P terms only, but only one claim can be considered
during the policy period on account of losses arising from such
conversions.
o A small exporter may, without the prior approval of ECGC extend the
due date of payment of a D/A bill provided that a credit limit on the
buyer on D/A terms is in force at the time of such extension.
 Resale of unaccepted goods: If, upon non-acceptance of goods by a buyer,

the exporter sells the goods to an alternate buyer without obtaining prior
approval of ECGC even when the loss exceeds 25% of the gross invoice value,
ECGC may consider payment of claims upto an amount considered
reasonable, provided that ECGC is satisfied that the exporter did his best
under the circumstances to minimize the loss.
3. Specific Buyers Policy:
Buyer-wise Policies - Short Term (BP-ST) provide cover to Indian exporters

against commercial and political risks involved in export of goods on short-term
credit to a particular buyer. All shipments to the buyer in respect of whom the policy
is issued will have to be covered (with a provision to permit exclusion of shipments
under LC). These policies can be availed of by:
a. exporters who do not hold SCR Policy and
b. By exporters having SCR Policy.
In case all the shipments to the buyer in question have been permitted to be
excluded from the purview of the SCR Policy.

CREDIT INSURANCE
Different types of BP (ST):
 Buyer wise (commercial and political risks) Policy - short-term
 Buyer wise (political risks) Policy - short-term.
 Buyer wise (insolvency & default of L/C opening bank and political risks)
Policy - short-term.
4. Service Policy:
Where Indian companies conclude contracts with foreign principals for

providing them with technical or professional services, payments due under the
contracts are open to risks similar to those under supply contracts. In order to give a
measure of protection to such exporters of services, ECGC has introduced the
Services Policy.
The different types of Services Policy and what protections do they offer:
 Specific Services Contract (Comprehensive Risks) Policy;
 Specific Services Contract (Political Risks) Policy;
 Whole-turnover Services (Comprehensive Risks) Policy; and
 Whole-turnover Services (Political Risks) Policy
Specific Services Policy, as its name indicates, is issued to cover a single

specified contract. It is issued to provide cover for contracts, which are large in value
and extend over a relatively long period. Whole-turnover services policies are
appropriate for exporters who provide services to a set of principles on a repetitive
basis and where the period of each contract is relatively short. Such policies are issued
to cover all services contracts that may be concluded by the exporter over a period of
24 months ahead.
The Corporation would expect that the terms of payment for the services are in
line with customary practices in international trade in these lines. Contracts should
normally provide for an adequate advance payment and the balance should be payable
periodically based on the progress of work. The payments should be backed by
satisfactory security in the form of Letters of Credit or bank guarantees.
Services policies are designed to cover contracts under which only services are
to be rendered. Contracts under which the value of services to be rendered forms only
a small part of a contract involving supply of machinery or equipment will be covered
under an appropriate specific policy for supply contracts.

CREDIT INSURANCE
5. Buyer Exposure policy:
Presently, in the policies offered to exporters premium is charged on the

export turnover, though the Corporation’s exposure on each buyer is controlled
through a system of approval of credit limits on the buyer for covering commercial
risks. While this suits the small and medium exporters, many large exporters having
large number of shipments have been complaining about the volume of returns to be
filed under the policy necessitating the deployment of their resources for this purpose
and also resulting in possible unintentional omissions or commissions in such
reporting, which have an impact on the settlement of claims. There has been a demand
for simplification of the procedures as well as for rationalization of the premium
structure. Considering the requirements of such exporters, the Corporation has
decided to introduce policies on which premium would be charged on the basis of the
expected level of exposure. Two types of exposure policies – one for covering the
risks on a specified buyer and another for covering the risks on all buyers- are offered.
Two types of Exposure policies are offered, viz,
a. Exposure (Single Buyer) Policy – for covering the risks on a specified buyer
and
b. Exposure (Multi Buyer) Policy – for covering the risks on all buyers.
6. Export Turnover Policy:
Turnover policy is a variation of the standard policy for the benefit of large
exporters who contribute not less than Rs. 10 lacs per annum towards premium.
Therefore all the exporters who will pay a premium of Rs. 10 lacs in a year are
entitled to avail of it.
In what respects is the turnover policy different from a standard policy:
 The turnover policy envisages projection of the export turnover of the exporter
for a year and the initial determination of the premium payable on that basis,
subject to adjustment at the end of the year based on actuals. The policy
provides additional discount in premium with an added incentive for
increasing the exports beyond the projected turnover and also offers simplified
procedure for premium remittance and filing of shipment information. It also
provides for higher discretionary credit limits on overseas buyers, based on the
total premium paid by the exporter under the policy. The turnover policy is
issued with a validity period of one year. In most of the other respects the
provisions relating to standard policy will apply to turnover policy.

CREDIT INSURANCE
7. Construction Works Policy:
Construction Works Policy is designed to provide cover to an Indian

contractor who executes a civil construction job abroad.
The distinguishing features of a construction contract are that-
a. the contractor keeps raising bills periodically throughout the contract period
for the value of work done between one billing period and another;
b. to be eligible for payment, the bills have to be certified by a consultant or

supervisor engaged by the employer for the purpose and
c. that, unlike bills of exchange raised by suppliers of goods, The bills raised by
the contractor do not represent conclusive evidence of debt but are subject to
payment in terms of the contract which may provide, among other things, for
penalties or adjustments on various counts.
The scope for disputes is very large. Besides, the contract value itself may
only be an estimate of the work to be done, since the contract may provide for cost
escalation, variation contracts, additional contracts, etc. It is, therefore, important that
the contractor ensures that the contract is well drafted to provide clarity of the
obligations of the two parties and for resolution of disputes that may arise in the
course of execution of the contract. Contractors are well advised to use the Standard
Conditions of Contract (International) prepared by the Federation International Des
Ingenieurs Conseils (FIDIC) jointly with the Federation International du Batiment et
des Travaux Publics (FIBTP).
Risks covered by Construction Works Policy:
The Construction Works Policy of ECGC is designed to protect the Contractor

from 85% of the losses that may be sustained by him due to the following risks:
a. Insolvency of the employer (when he is a non-Government entity);
b. Failure of the employer to pay the amounts that become payable to the
contractor in terms of the contract, including any amount payable
under an arbitration award;
c. Restrictions on transfer of payments from the employer's country to

India after the employer has made the payments in local currency;
d. Failure of the contractor to receive any sum due and payable under the
contract by reason of war, civil war, rebellion, etc;

CREDIT INSURANCE
e. The failure of the contractor to receive any sum that is payable to him
on termination or frustration of the contract if such failure is due to its
having become impossible to ascertain the amount or its due date
because of war, civil war, rebellion etc;
f. Imposition of restrictions on import of goods or materials (not being

the contractor's plant or equipment) or cancellation of authority to
import such goods or cancellation of export license in India, for
reasons beyond his control; and
g. Interruption or diversion of voyage outside India, resulting in his

incurring in respect of goods or materials exported from India, of
additional handling, transport or insurance charges, which cannot be
recovered from the employer.
8. Overseas Investment Guarantee:
ECGC has evolved a scheme to provide protection for Indian Investments

abroad. Any investment made by way of equity capital or untied loan for the purpose
of setting up or expansion of overseas projects will be eligible for cover under
investment insurance. The investment may be either in cash or in the form of export
of Indian capital goods and services. The cover would be available for the original
investment together with annual dividends or interest receivable. The risks of war,
expropriation and restriction on remittances are covered under the scheme. As the
investor would be having a hand in the management of the joint venture, no cover for
commercial risks would be provided under the scheme.
The main features of the Overseas Investment Insurance:
 For investment in any country to qualify for investment insurance, there

should preferably be a bilateral agreement protecting investment of one
country in the other. ECGC may consider providing cover in the absence of
any such agreement provided it is satisfied that the general laws of the country
afford adequate protection to the Indian investments.
 The period of insurance cover will not normally exceed 15 years in case of
projects involving long construction period. The cover can be extended for a
period of 15 years from the date of completion of the project subject to a
maximum of 20 years from the date of commencement of investment. Amount
insured shall be reduced progressively in the last five years of the insurance
period.

CREDIT INSURANCE
9. Small and medium export policy:
ECGC introduced a Policy exclusively for the SME sector units in 4th July,
2008. The Policy is particularly provides the SME Sector easy administrative and
operational convenience.
The features of the SME Policy are as under:
Features of Small and Medium Exporters Policy at a glance No. Particulars

Details:
a. Policy period 12 months
b. Processing Fees Rs.1000
c. Credit limit fees No
d. Discretionary Limit No
e. Declarations No
f. Premium Rs.5000
g. Maximum Loss Limit Rs.10 lacs
h. Single Loss Limit Rs. 3 lacs
i. Report of overdue 60 days from the due date
j. Waiting period Two months from the due date or extended due date
k. Percentage of cover 90%
This Policy is meant for exporters engaged in manufacturing activities having

invested in plant and machinery or engaged in export of services having invested in
equipment as per MSMED Act, 2006.
This Policy can be issued to an exporter qualifying as per the MSMED Act,
2006. The exporter desirous of obtaining the Policy should furnish the certificate
issued by the designated authority. (District Industries Centres)

CREDIT INSURANCE
INTERNATIONAL CREDIT INSURANCE & SURETY ASSOCIATION
The International Credit Insurance & Surety Association (ICISA) was founded in
April 1928, forming the first trade credit insurance association.]The Association is registered
in Zurich (Switzerland) under Swiss Civil Code (article 60). The Secretariat is based in
Amsterdam.
ICISA was established as (ICIA) (International Credit Insurance Association) in 1928.

As the first association for the industry, it has evolved and grown and the current members
account for 95% of the world's private credit insurance business, insuring risks in practically
every country in the world.
The International Credit Insurance & Surety Association (ICISA) is the leading global
association representing trade credit insurers and surety companies. ICISA members form a
central role in facilitating trade, by insuring payment risks resulting from local sales as well
as exports, or by providing security for the performance of a contract. Members of ICISA
meet regularly and benefit from an open exchange of information and expertise. ICISA
promotes sustained technical excellence, industry innovation and product integrity. ICISA
has a proactive role as advocacy and media relations organisation on issues and topics that
are relevant for the members. Furthermore ICISA advises international and multinational
authorities on vital issues related to the trade credit insurance and surety bond industries.
The object of the Association is to study questions relating to Credit Insurance and
Surety, to provide opportunities for Members' employees to acquire knowledge of the theory
and practice of credit insurance and surety underwriting, to represent the Members’ interests
and to initiate means whereby the common action of the Members can be facilitated in order
to develop their mutual relations in the interest of their national and the international
economy, in the interest of their insured and in their own interest."

CREDIT INSURANCE
Main Line of Business:
1. Trade Credit Insurance:
Trade Credit Insurance insures against the risk of non-payment by a buyer.

Trade credit insurance policies can include a wide range of cover, depending on the
circumstances. If a buyer does not pay, the trade credit insurance policy will pay out a
percentage of the outstanding debt. This percentage usually ranges from 75% to 95%
of the invoice amount, but may be higher or lower depending on the type of cover that
was purchased.
2. Surety & Bonds:
Surety bonds guarantee the performance of a variety of obligations, from

construction or service contracts, to licensing, to commercial undertakings. The
Surety guarantees to pay the direct loss suffered by one party (generally known as
Employer/Beneficiary) as a result of a contractual default by the other party (generally
known as the Contractor). For example, the failure of a contractor to complete a
contract in accordance with its terms and specifications or the failure of an enterprise
to pay taxes or customs duties to a government or department.
3. Reinsurance:
A reinsurance company insures the risk that has been underwritten by an

insurance company. The risk of a major loss event imposes a burden that no single
company can bear. Reinsurance makes it possible for these risks to be underwritten.
In a way, one could say, "reinsurance is insurance for insurance companies". Over the
years the international reinsurance sector has developed into a highly specialised
financial services industry that works closely in conjunction with direct insurers to
meet the needs of their customers. ICISA's Reinsurance Members have specialised
departments focusing solely on the reinsurance of credit insurance and surety risks.
Members' main lines of surety business are:
 Customs, tax and/or similar bonds

 Bonds concerning concessions and licenses
 Judicial Bonds
 Bonds concerning purchases of goods and/or services\
 Bonds concerning leases
 Bonds concerning construction and/or supply contracts
 Financial bonds

CREDIT INSURANCE
CASE STUDY
Client: Computer Products Wholesaler
Topic: Decision Support Scenario
Situation:
Middle Market Company selling into a

changing industry - specifically, how they do
business. Historically, sales were conducted on
C.O.D. basis, or very short terms; however,
accounts have begun to demand open credit terms and our prospect has little experience
managing credit risk. Also, the number of new accounts seeking credit had been growing to
unmanageable levels.
Operating Facts:
 Annual Sales: $14 million,

 Average Accounts Receivable: $2 million,
 Gross Margin: 25%,
 Account Turns Per Year: 7,
 Credit Function Handled by the Management Team.
Objective:
Outsource credit analysis function to provide expert advice, allowing our prospect the
ability to safely grow their business.
Solution:
Implemented a credit insurance program that provided credit risk assessment on their
medium and large accounts. The policy assumes the responsibility of continuous monitoring
on all covered accounts - no credit "due diligence" required by our client. The policy was
customized to provide immediate credit decisions for new medium sized accounts. Also,
marketing prospect lists were developed with names of accounts pre-approved under the
policy.
Results:
The program produced immediate results. Sales were made to new and existing
accounts on open credit terms that our client would have never entertained prior to the
adoption of the credit insurance program. Our client successfully grew their business by
200% during the initial policy period and is projecting to generate approximately $35 million
in revenue over the next year.

CREDIT INSURANCE
Decision Support/Profit Pay-out

Full Time Credit Expert $35,000
Credit Insurance Premium $21,000
Overhead Savings $14,000
Additionally
One Time Sale $8,00,000 Opportunity
Potential Gross Profit $1,20,000 (bid-lower margin)
Knowledge of Potential Account NONE
Cost To Insure This One Transaction $8,000

CREDIT INSURANCE
CONCLUSION
 Trade credit insurance usually covers a

portfolio of buyers and pays an agreed
percentage of an invoice or receivable that
remains unpaid as a result of protracted default,
insolvency or bankruptcy.
 Credit insurance can provide cost effective access to working capital that can help you
grow and avoid cash flow crunches
 Analyse the risk that a buyer will not pay for the purchases it makes on credit and
guide its customers away from those buyers that are likely to fall into this high risk
category.
 Credit Insurance / Trade Credit Insurance policies are required by Companies to guard
themselves against the potentially disastrous effects of bad debts. However, a policy
can also guarantee a range of additional benefits rather than just bad debt insurance.
 From 1990, the year Credit Insurance was established; it has been progressing at a
very high speed. As many companies running its day to day activities in credit, they
have come to know the importance of credit insurance.

Credit Insurance

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CREDIT INSURANCE

A contractual agreement in which a

Credit insurance is an insurance policy

Trade credit is offered by vendors to their customers as an alternative to prepayment

TY B.COM (BANKING AND INSURANCE) SEM VI Page 1

Trade credit insurance is purchased by business entities to insure their accounts

Repudiation refers to the importer’s unlawful refusal to accept the goods/services

Credit insurance can be a financial lifesaver in the event of certain catastrophes.

TY B.COM (BANKING AND INSURANCE) SEM VI Page 2

HISTORY OF CREDIT INSURANCE

In 2009, the UK government set up a short-term £5 billion Trade Credit Top-up

TY B.COM (BANKING AND INSURANCE) SEM VI Page 3

FEATURES OF CREDIT INSURANCE

Select-Risk Cover: A multi-debtor structure that excludes lower-risk obligors

A multi-debtor credit insurance structure that covers all of a company’s open

A multi-debtor structure with a sizeable deductible (either per-loss or first loss

First-Loss (Ground-Up) Cover: A multi-debtor insurance structure

TY B.COM (BANKING AND INSURANCE) SEM VI Page 4

A multi-debtor insurance structure traditionally offered by FCIA, Ex-Im Bank,

Insurers are increasingly willing to participating in syndicated credit insurance

The traditional market view of a global credit insurance program is one in

In response to the inadequacy of this traditional approach, IRC develops

TY B.COM (BANKING AND INSURANCE) SEM VI Page 5

Captive insurance companies sometimes use trade credit insurers to reinsure

8. Domestic Credit Insurance or Whole Turnover Domestic Credit Insurance:

9. Export Credit Insurance or Whole Turnover Export Credit Insurance:

For international sales, insurance covers various risks including insolvency,

10. Combined Domestic & Export Credit Insurance:

11. Pre-Delivery Coverage :

TY B.COM (BANKING AND INSURANCE) SEM VI Page 6

13. Key Account Credit Insurance:

This type of Credit Insurance policy offers businesses insolvency and

Catastrophe Credit Insurance is designed to protect companies with annual

Global Credit Insurance is designed for multinational companies with trading

TY B.COM (BANKING AND INSURANCE) SEM VI Page 7

BENEFITS OF CREDIT INSURANCE

Credit insurance provides not only peace of mind to

1) Catastrophic loss protection:

Your receivables are one of your largest and most

2) Safe sales expansion;

4) Credit Decision support and information on your customers:

When you implement a credit insurance program with Global Commercial

TY B.COM (BANKING AND INSURANCE) SEM VI Page 8

5) Allows companies to lower their bad debt reserve;

6) Helps avoid an unexpected significant impact on your company:

TY B.COM (BANKING AND INSURANCE) SEM VI Page 9

DETERMINING WHY TO BUY CREDIT RISK INSURANCE

1. Catastrophic loss protection:

2. Safe sales expansion:

TY B.COM (BANKING AND INSURANCE) SEM VI Page 10

3. Credit decision support:

5. Exporting on open credit:

TY B.COM (BANKING AND INSURANCE) SEM VI Page 11

TY B.COM (BANKING AND INSURANCE) SEM VI Page 12

UNDERSTANDING CREDIT INSURANCE

There is an analogy with credit insurance. The economic landscape changes

TY B.COM (BANKING AND INSURANCE) SEM VI Page 13

 Credit Insurance Underwriters:

Credit insurance providers consist mainly of banks, private insurance

TY B.COM (BANKING AND INSURANCE) SEM VI Page 14

o The third biggest credit insurance underwriter, Compagnie Francaised'

TY B.COM (BANKING AND INSURANCE) SEM VI Page 15

REASONS FOR FAST GROWING CREDIT INSURANCE