Association president reveals key to success in receivables insurance

Mark Attley is enjoying semi-retirement before hitting Freedom 55, and he credits his success to pursuing a career in the receivables insurance market – even if he did get a later start at it.

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Mark Attley is enjoying semi-retirement before hitting Freedom 55, and he credits his success to pursuing a career in the receivables insurance market – even if he did get  a later start at it.

“If I had to do it all over again, I’d aim my arrow straight at receivables insurance,” says Attley, who is now the president of the Receivables Insurance Association of Canada. “It’s a great product with a great future that many more brokers should take advantage of.”

Receivables insurance is a set of financial planning tools used by Canadian businesses to protect corporate balance sheets against unforeseen trade disruptions or political turmoil, while fostering faster company growth.

As an entry-level property and casualty underwriter in 1981, Mark Attley hadn’t heard of receivables insurance, much less realized the trajectory that would one day lead to him becoming president of the association.

“Receivables insurance gives businesses the confidence required to expand sales with buyers without fear of the unpredictable,” says Attley. “It also gives bankers, who are in a position to influence the use of receivables insurance, the confidence to back larger receivables loans at more favourable rates – fostering faster company growth.”

An Introduction to Receivables

Back in 1986, Attley and Ron Doyle—who had a background as an executive with Trade Indemnity and Export Development Canada (EDC)—identified an opportunity in what was then a nascent niche for Ontario brokerages, offering receivables insurance – also known as trade credit insurance.

Canada’s vastly under-insured state of corporate receivables introduces undue risk on working capital loans, inhibits the amount that a business can be loaned, and also forces higher interest rates on business clients, says Attley, artificially restricting sales growth. (continued.)
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“If an adverse economic or political event occurs that affects a company’s ability to be paid for goods or services in transit or already provided, a receivables insurance policy pays out,” he says. “Receivables insurance gives businesses the confidence required to expand sales with buyers without fear of the unpredictable. It also gives bankers, who are in a position to influence the use of receivables insurance, the confidence to back larger receivables loans at more favourable rates – fostering faster company growth.”

Other brokers at the firm weren’t much interested in investing the time into developing the market for receivables insurance, says Attley, a largely unknown product line in the Canadian P&C industry. But Attley saw it as another niche upon which he could clearly build his expertise.

“Account receivables is still the biggest unidentified and uninsured exposure facing Canadian businesses today,” says Attley, pointing to less than 1 per cent of Canadian companies currently utilizing receivables insurance as part of their financial planning – or less than 10,000 of Canada’s 1.1 million employer businesses.

Canada’s vastly under-insured state of corporate receivables introduces undue risk on working capital loans, inhibits the amount that a business can be loaned, and also forces higher interest rates on business clients, says Attley, artificially restricting sales growth.

He believes the receivables insurance market in Canada, valued at $200 million today, will grow to $350 million within five years.

“If an adverse economic or political event occurs that affects a company’s ability to be paid for goods or services in transit or already provided, a receivables insurance policy pays out,” explains Attley. “Receivables insurance gives businesses the confidence required to expand sales with buyers without fear of the unpredictable. It also gives bankers, who are in a position to influence the use of receivables insurance, the confidence to back larger receivables loans at more favourable rates – fostering faster company growth.” (continued.)
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Attley also identifies another “aspect” of receivables insurance. While the long established and hotly contested property and casualty insurance market is driven by price and relationships based on “how much can you get somebody to trust you versus somebody else,” the receivables insurance market is founded on a far deeper business value proposition.

“Receivables insurance is not just another insurance product in which a client sees value only after making a claim because receivables insurance doesn’t just sit in a drawer until something happens,” says Attley. “It’s a real business tool, an essential aspect of corporate risk management and also growth management.”


 

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