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Currency risk
When you trade internationally, you are automatically exposed to currency risk. Fluctuations in exchange rates can affect your profit margins. Did you know that credit insurance helps protect you against this risk?
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Transfer risk
Political events, economic difficulties, foreign exchange shortages or legal measures may delay or hinder the transfer of payments in your debtor's country. If your debtor is in the country to which political risk cover applies, credit insurance specifically covers the risks mentioned above. Don't let external influences undermine your business operations!
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Waiver of payment obligation
Payment waiver is a generally binding measure in your debtor's country. This means that the debtor has paid locally, but exchange rate fluctuations may cause the converted amount to be worth less on the day of transfer. It therefore brings in less than the amount of the receivable. Credit insurance offers protection against this; the policy contains specific guidelines on the acceptable currency to cover political risk.
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Acceptable currency and Policy currency
In your contract with a debtor, it is important that it contains the currency accepted by a credit insurer. Conversion of amounts to Policy currency is at the mid-rate set by the ECB (European Central Bank) on the last working day of the month in which cover started.
Complicated?
A solid foundation for doing business globally lies in protecting against risk. Of course, you cannot exclude everything, but the volatility of international trade requires insight and knowledge. Consulting an expert is therefore not a luxury.
