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Trade Credit Insurance

Product highlights

If you run a trading business and need to rely on credit for cash flow, then this could be the product for you.

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Protect and grow your business with Trade Credit Insurance

In today’s market you can’t afford to miss any opportunities. The majority of business transactions are on credit terms and if you do not offer a new customer flexible terms of payment it’s likely they will take their potential business elsewhere. With Trade Credit Insurance you can better assess the creditworthiness of the buyer and insure this trading risk, hence seizing your opportunities and building business relationships with new customers.

What is Trade Credit Insurance?

  • Trade Credit Insurance (TCI) is a financial tool that protects you from non-payment of account receivables as a result of commercial risks, protracted default or political risks
    1. Commercial risk refers to the failure of a buyer to pay its trade credit debts within the agreed credit period, whether due to temporary financial problems or insolvency
    2. Political risk includes natural disasters; war in the buyer’s country; cancellation of contract by the government of the buyer’s country; or governmental regulations such as embargo or quotas that prevent the export or import of goods
  • On average, trade receivables represent a significant portion of a company’s balance sheet and are typically a company’s largest asset, as well as being an asset that is vulnerable to unexpected losses. Will your business operation be affected under non payment by trade debtors?

Who might benefit from TCI?

  • Businesses that sell their goods/services to other businesses (B2B trade) on credit terms
  • Businesses that have potential to conduct sales on credit terms

Why should I buy a TCI policy

  • To provide more credit to new and existing buyers, thus generating more sales
  • To offer more favourable and longer open payment terms to buyers, which can lead to winning new business from your competitors
  • To reduce the cost of credit management as risk assessment, monitoring and indemnification

Key drivers to buy TCI

  • Protection against bad debts
  • Balance sheet protection
  • Strengthen corporate governance and risk control
  • Accessing new or riskier markets
  • Debt collection
  • Advance warning of potential dangers that may threaten your business
  • Safer sales targeting: Screening new and existing customers to identify those with which you may wish to grow your business safely and profitably
  • Access to Euler Hermes’ proprietary database, giving you invaluable insight into customers
  • Reduction of fixed overheads

Reminder: "To borrow or not to borrow? Borrow only if you can repay!"

Important Notes:
  1. Trade Credit Insurance is underwritten by Euler Hermes which is authorised and regulated by the Insurance Authority. The Hongkong and Shanghai Banking Corporation Limited ("HSBC") has entered into a referral arrangement with Euler Hermes to enable HSBC to refer its customers to Euler Hermes for information and advice about Trade Credit Insurance.
  2. The information shown above regarding Trade Credit Insurance does not constitute any product advice and opinion by HSBC.
  3. The information shown above regarding Trade Credit Insurance is provided by Euler Hermes and is intended as a general summary for your reference only.

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