Leveraging trade credit insurance to build better business relationships

Selecting the right trade credit insurance partner —one you can trust and with whom you can build that all-important lasting relationship—is fundamental. Avoiding bad debt also requires working closely with customers to ensure solutions can be found. And timing is of the essence to mitigate the impacts of non-payments on cash flow.

In times of crisis and distress, the quality of the relationships we’ve nurtured during the good times becomes essential. In trade credit insurance, it’s no different: When there’s a focus on building long-lasting, trust-based partnerships with customers, it facilitates the creation of similar relationships between that customer and their clients.

As the head of Claims and Collection at Allianz Trade’ World Agency—our team dedicated to multinationals—I oversee master claims agreements for our clients. In the last year, I’ve witnessed the upheaval across our customers’ markets and the emergence of issues we’ve never had to face before. Supply chains were severely affected as deliveries of goods stalled, and so did payments.

Our response was to double down on customer support by guiding our clients in terms of their customer relationships. For example, what companies often don’t realize is the positive effect of appointing a third party for payment collection. Transferring the task to your insurer reduces the emotions involved in the transaction, and I’ve seen this have a positive impact on customer relationships, and in turn, future collaboration.

We are constantly thinking ahead and evolving our processes. And when the pandemic sent global markets into a standstill, we knew we had to respond quickly.

Our first reaction was to reach out to our clients and give them some flexibility and advice to strengthen their customer relationships and help all parties through the crisis. For example, we immediately supported our clients in setting up repayment plans with their customers to ensure quick reductions of unpaid debt.

We also doubled down on our efforts to ensure every claim was processed and indemnified on time, to protect our client’s cash flow, and ensured filing NPNs was as easy as possible. Being willing to speed up our processes while advising our clients to show their customers the same level of adaptability received a tremendously positive response.

Going through the crisis, we noticed that closely guiding our clients through their payment agreements helped them recover their debts much faster. At first, this was mostly a two-step approach: we would recommend the next action to our client, and they would effectuate it with their customer. 

We also make sure that communication between our local teams and our clients run smoothly, for example by checking that our clients notify account managers of missed payments as early as possible. Respecting contractual deadlines is the simplest way to make the most of trade credit insurance and leverage it as a tool to protect your cash flow .

While navigating and managing trade in a global arena can be challenging, it becomes much easier if we combine our resources and work together.

As a centralized division, Allianz Trade’ World Agency has the advantage of a global perspective that enables us to give our multinational clients personalized advice. This is how we support future opportunities for trade across for our worldwide clients.