Chubb Corp. chose the RIMS Convention in Atlanta to announce the launch of a new trade credit product, designed to “ensure that policy holders will be paid for merchandise shipped or services rendered on credit to commercial customers.”
A study conducted by Chubb, also released at the conference, found that: “Despite the increasing significance of cross-border operations, U.S. and Canadian risk managers tend to distinguish little between the risks of doing business in their home country vs. foreign locations, and they frequently have little or no contact with their foreign operations while managing risks.”
Trade credit insurance addresses one vital aspect of doing business both at home and abroad — how to ensure payment. It covers such occurrences as a trade partner’s “insolvency, currency fluctuations, general economic decline or other contingencies,” and provides compensation for losses.
Chubb VP Peter Aitken, co-manager of trade credit insurance, stated, “Operating in an increasingly swift and demanding domestic and global environment presents both enormous opportunities and a broad spectrum of risks. As a result many companies are faced with myriad financial challenges arising from economic uncertainty and cross-border exposures. An assurance of payment policy not only provides peace of mind but can also strengthen an organization’s balance sheet from the view point of lenders, investors and shareholders.”
Trade credit coverage is part of a line of products offered by Chubb’s Multinational Resource Group for companies doing business overseas. Other policies available cover different, and too often neglected aspects of international trade, including political risks, kidnap, ransom and extortion, cyber theft and brand name protection.
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