Dienesch, chief executive of Euler Hermes Canada, said credit insurance could be the differentiator that grows an agent’s sales – they just need to get their head around it.
“Credit insurance is distributed through specialty insurance brokers and also distributed directly by the insurance companies. For the most part it’s sold through brokers,” he said. “Being a specialty product, there’s a lack of education around the product. As a consequence of it being a specialty line, [many P&C brokers] are almost afraid to sell it.”
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Credit insurance, or accounts receivable insurance, protects business-to-business companies against bad debt, in the forms of unpaid bills, customer bankruptcies, and the like, and protects companies whether they’re selling nationally or internationally.
Dienesch said he considers the product to have four elements: “a sales tool, a finance tool, and information tool, and last but not least the insurance tool.” Credit insurance ensures you can trade securely, he said, by utilizing sales databases to tell clients whether or not potential customers are safe traders; by providing businesses with longer sales terms as a competitive edge; and by helping increase lines of credit from banks.
It’s a tool to help businesses grow, he said. So how and why should brokers get involved?
“It’s absolutely easy. Brokers are very much competing in that P&C space. They’re always competing on price against each other. So what a broker can do is use credit insurance as a wedge product into a new customer,” he said.
“When you think about it, a lot of companies aren’t buying credit insurance, so if you can develop a little bit of expertise in this product – and the insurance companies, certainly Euler Hermes, we provide a lot of support to brokers to get them to use this as their wedge product – what it does is it gets them a foot in the door and then they can expand that relationship.
“Also the converse is true. If you have all the P&C stuff, you don’t want someone knocking on your client’s door and trying to get in there with that wedge. It’s an enhancement from a relationship standpoint. It can give you an expanded knowledge about your customer – now you can talk about the strategies of the company, where do they want to go, who do they want to sell to, who are they selling to, which countries are they in? It just gives [brokers] a much broader perspective on their customers.”
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