How multinationals can unlock the potential of trade credit insurance

Strong balance sheets can help multinationals achieve this.

Many multinationals are finding it difficult to optimise the value of trade credit insurance policies in a complex marketplace, according to WTW.

WTW said the first step is to identify the problems posed by existing trade credit arrangements as the difficulties stem from the trade credit market’s evolving.

In particular, multinationals have often built up portfolios of policies rather than arranging insurance at a regional or global level.

One negative consequence of this approach is it increases both internal and external costs across the business as a whole.

Multinationals can overcome these challenges without high costs and complexities through strong balance sheets to absorb smaller bad debts and aligning credit insurance with their financial strength.

Quality insurance can also enhance financing options by ensuring accounts receivables are valuable collateral.

Moreover, integrating technology with a trade credit insurance program allows better data use at regional or global levels, maximising policy effectiveness.