Whether credit insurance is being used to increase sales and market share, to facilitate or enhance financing, or to mitigate risk, IRC can help you identify the policy structure that best fits your business needs. There are primarily two coverage structures available to companies and financial institutions, which are Single-Buyer Credit Insurance and Multi-Buyer Credit Insurance. However, coverage is not necessarily limited to these standard formats. Specialized coverage structures can sometimes be crafted to suit a specific transaction or business structure. IRC can also bring a consortium of insurance companies together to write one policy for larger companies seeking coverage on particularly large, risky, or exceptional exposures.

Single-Buyer Credit Insurance

The policy is written to cover one particular transaction or shipments made (or services rendered) to one customer over a 12 month period. Single-Buyer Credit Insurance can be further divided into three sub-categories, depending on the repayment terms you need to offer your customer:

• Short-Term: Covers repayment terms of one year or less.
• Medium-Term: Covers repayment terms greater than one year and up to five years.
• Long-Term: Coverage is usually capped at seven year repayment terms, although there may be insurers willing to cover longer-term obligations under a specialized policy.

Note: Medium-term and long-term single-buyer insurance is typically not an option for the sale of non-capital goods.

There are a limited number of insurers that provide Single-Buyer Credit Insurance, and because the risk is concentrated to one buyer in one country, it is necessary to provide the insurance underwriters with a well-developed submission. Exceptions are made for obligors already known to the insurers or those which are publicly traded, but in all other cases it is the responsibility of the applicant to provide a credit agency report on the customer and financial statements for the last three fiscal periods. A bank reference, trade references, and interim financial statements may also be needed.

Moreover, it is critical that the underwriter fully understand your business, your customer's business, and the transaction to be insured so that the insurance policy is properly structured. IRC's Special Risk Group (SRG) serves as the structured trade arm of the company. It works with our clients to place Single-Buyer Credit Insurance coverage and stands ready to discuss your transaction with you.