Brokers: Now is the time to discuss insolvency risk

Brokers: Now is the time to discuss insolvency risk | Insurance Business

Brokers: Now is the time to discuss insolvency risk
With the countdown to Christmas in full swing, brokers should look to discuss trade credit cover with their clients in a variety of different industries, says one expert.

Mary Ibrahim, head of client services at Atradius, said that brokers should turn to their retail, manufacturing and construction clients to make sure they are prepared for what can be a difficult period.

“A lot of people become complacent this time of the year,” Ibrahim told Insurance Business. “If you look historically at some of the big retailers that have fallen over, they have fallen over after the Christmas period, around March-April time, because the Christmas sales have boosted… but come February when that stops that is when you look at your numbers and say, we sold a lot but did that generate profit for us to stay alive?”

For the manufacturing and construction space, Ibrahim said that as Christmas often coincides with downtime, it is a good season in which to approach clients and ensure they are considering the security of their buyers and contractors. Brokers should look to provide as much information as they can on prospective or current buyers.

“Brokers can do basic checks for them on who the buyer is, what their trading history is like, and whether they are paying other people OK,” Ibrahim continued.

“Some of these SMEs don’t have sophisticated credit departments; they are usually one to five employees so they don’t have those resources… a broker could match you with a credit insurer, debt collector, someone who looks up who your buyers are and does some checks for you.”

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