Hollard Trade Credit have launched a new selected debtor insurance product which is being supported by the Debtsource credit risk management solution.
After extensive investigation into the current trade credit insurance market, Hollard have launched its trade credit insurance offering – and it looks set to be a real winner. Rather than opting for comprehensive cover which is typically available in the market, Hollard decided to take a different approach and to offer clients the opportunity to select which debtors they wish to insure.
Hollard is one of the largest insurance companies in Africa and has extensive operations that cover both short-term personal, commercial and life products. It is also a South African based venture, which means great insight into the South African market and the needs of local businesses. In addition, the company has operations in other African countries, the Far East and Australia.
Instead of building an in-house risk management department, Hollard partnered with Debtsource to provide risk management support services. This route to market provides Hollard with an instant capability to assess and manage high volumes of insurance cover requests, together with systems and processes, which Debtsource have honed over the past 13 years.
The product has a number of other unique elements to it. For starters premiums are based on the risk grading of the debtor rather than on prior claims or perceived industry risk. Premiums are also based on the approved credit limit, meaning that companies can decide how much cover they want to buy, with no punitive clauses for trading over the insured limit. There is also no requirement for clients to do monthly declarations – policyholders simply send their monthly age analysis to Debtsource to track debtor performance and exposures.
A further unique feature of this solution is that cover is available based on the Debtsource credit limit review. In other words, clients simply ask Debtsource to do a limit assessment on the debtor, and then have the option to have the limit insured through Hollard if the recommended credit limit is positive. The file is then passed to Hollard Trade Credit for approval based on their underwriting criteria. This unique approach by Hollard will be welcomed by clients as they will be provided with all the information and back-up data that was used in making the recommendation, allowing for complete transparency of information between the insurer, the debtor and the client.
Debtsource will be marketing the Hollard solution as an intermediary alongside the offerings of the other trade credit insurance companies. Clients can thus choose to either have their portfolio comprehensively insured, or select which specific debtors they wish to cover.
Hollard believes the target market for this exciting offering will be mainly companies whom did not previously insure. Typically, these would be businesses that in the past felt that comprehensive cover was too expensive, or simply wanted the ability to select which debtors to cover.
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