AON: Less than 10% of the trade credit insurance requests are being accepted by the insurers
 The rates for the trade credit insurance rose even by 50% in 2009
compared to 2008, with the increase of payment incidents due to the
economical situation. The claim rates registered by insurers due to the
nonpayment of insured companies' account receivables by their debtors
exceeded 100%, even reaching 150%, according to AON Romania
representatives.
In 2010, after two years of crisis, the companies in Romania "improved their client analysis procedures, making a primary selection before the one made by the insurers in order to set the credit limits. This led to a payment incidents decrease helping the credit insurers to offer more advantageous conditions compared to the past years", declared Andreea MIHAI, Senior Broker, AON Romania.
Trade credit insurance protects a company's domestic and/or foreign accounts receivables against nonpayment caused by the insolvency of its debtors, protracted default (slow pay situations) or political risks.
"The minimum requirements that have to be fulfilled for a trade credit regarding turnover, activity domain, invoice payment terms, specific debtors, as well for surety bonds - solvency and creditworthiness parameters above certain thresholds- are difficult to fulfill by many companies so the percentage of the insured companies out of the total number of those who request credit insurance is very small, under 10%", says Silvia PAVALASCU, Senior Broker within the same company.
Amid economical crisis, the requests for the nonpayment risk for trade credits rose, but the insurers underwriting procedures are more rigorous than before, so not all companies requesting are allowed to get insurance and their risk to be covered by credit insurers.
Author: Andreea IONETE
on 31.08.2010
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