Volatility associated with dramatic changes in geopolitics, the unknown impact of quantitative tightening, and changing commodity supply and demand patterns, has heightened both the perception of risk and the exposure to disruption in the supply chain.
It is often difficult for organization to foresee emerging risks. Increased risk volatility often leads to an increase in failures to deliver or pay, which translates into heightened
Financial parties such as banks, equity investors, corporates, and large commodity traders are often concerned about multiple risks when lending to their customers. The risks of non-payment or non-performance can be a challenge to manage for banks and non-financial institutions.
Our diverse, global and creative team of specialists works as your agent and problem solver to overcome concerns or challenges, and provide a customized strategy to leverage your business volumes. We believe insurance contributes to the growth of your business as well as provide crucial protection in unstable circumstances.
We find opportunities where others see challenges. Our entrepreneurial culture and exclusive analytical ability helps clients to identify and realize opportunity in volatility.
WHAT WE DO
We collaborate with international insurance markets across all geographies to offer comprehensive structured credit insurance for our clients, which provides protection for non-payment, non-delivery, and/or non-honoring of an agreement for any reason. Our clients apply this product to a wide range of financial obligations, including trade/non-trade related or asset secured loans.
Risk mitigation with comprehensive, non-cancellable, structured credit insurance products help our clients keep a robust balance sheet, expand into new territories, increase capacity for larger or complex transactions, reduce capital costs and enhance net returns. It also helps to strengthen relationships between them and their customers.
Credit agreements between our clients and their customers can be complex, and are frequently one-off and/or have high-value contractual arrangements. These agreements are often long-term with sculptured payments and increased security. Structured credit insurance products reflect the terms of the underlying contract, mitigating the
credit and performance risks faced during the business transaction.
Our experienced, diverse and global team has strong relationships with insurers in all markets. We strive to ensure that our clients’ specific requirements are incorporated by working closely with these specialist insurers, including acting as a market maker, to deliver tailor-made policies.
What information is required to go to the market to consider initial discussions for structured credit insurance?
We can provide a proposal form to complete, which we can then take to the market.
Alternatively, we may request:
Details of the counterparty
Contract terms and conditions
Information about insured goods/services
Law and jurisdiction
Experience you have had with the counterparty.
For short-term trade credit insurance multi-buyer policies, we ideally require a list of all customers, credit limit requirements, annual sales, and payment terms.
For payment default by the obligor, what do I need to provide as proof of loss?
There are some standard template proof of loss forms which are usually included as an appendix in a policy. If your policy has one, it will need to be completed and submitted to JLT.
If no proof of loss form is included, then the provision of proof of loss will need to include the following:
Written confirmation by the insured that there has been a default under the insured transaction (email is sufficient)
Proof that you have taken measures to retrieve the overdue payment from the obligor such as copies of emails or letters chasing payment
Summary of action taken by the insured to pursue payment from obligor
Supporting documents – contracts, correspondence, etc. concerning activity to mitigate loss
In addition to the above there may further information relating to the insured transaction that is requested by underwriters in order to process the claim. This will vary depending on the specifics of the policy wording.
Clients wishing to purchase insurance for structured credit risks need to ensure that they select a broker with the relevant skills, knowledge and expertise in their business sector. We believe insurance contributes to the growth of your business as well as provide crucial protection in challenging circumstances.
We find opportunities where others see challenges. Our entrepreneurial culture and exclusive analytical ability helps our clients to identify and realize opportunity in volatility.
Our multilingual team handle broking services for clients globally, including many of the world’s leading corporations, financial institutions, and government/multilateral agencies.
JLT CPS clients benefit from:
Access to our diverse global team that delivers creative, comprehensive risk and insurance solutions which facilitate growth, reduce capital costs, improve returns, and secure people and assets
Ideas and products that positively impact and inform risk mitigation, risk transfer strategies, as well as business decisions
Our ability to create capacity to underwrite new and evolving risks
proprietary analytics tools ensure our cliens have access to complete and accurate real-time information which enables fact based decision-making Experienced resources available where you need them without geographical or financial barriers
Consistent engagement through advisory, structuring, placement and claims, drawing in management leverage and technical expertise to ensure that when losses,do occur, we maximize recovery and minimize the impact on your operations.
Credit Risk Coverage
A large commodity trader who was new to the
credit and political risk market required credit risk coverage for an important buyer who was sold oil on open account terms.
The commodity trader (the insured) needed comprehensive non-payment insurance to enable an increase in trade volumes with their trading partner which they were currently unable to do due to internal counterparty limits. Credit insurance would hold higher exposure to the buyer, but was also critical as their banking lines required it to finance the trade volume.
The buyer on which credit coverage was sought was a challenge for insurers. This was due to country risk, existing market commodities and creditworthiness – particularly for a new insured to the market.
JLT worked closely with the insured to understand their specific requirements, level of risk they were able to retain, and where we could consider bespoke alterations to their usual terms and conditions. We were then able to advise the insured of the merits of an excess of loss structure versus traditional co-insurance, as well as leverage our expertise and knowledge of the market to estimate the lower pricing.
The insured, via JLT, was then able to make a proposal to the credit and political risk market which was arguably more attractive than what other long standing trader clients were offering to insurers.
We deliver results. We deploy all resources to help resolve complex losses and deliver claim payments.
Our clients have confidence that the insurance policies we arrange are expertly structured and written by experienced insurers with strong track records in paying claims. Our approachable brokers work alongside our meticulous CPS claims professionals who specialize in handling, managing and negotiating claims.
In the event of a loss, we provide:
A single point of contact with overall accountability for all losses wherever they occur
Our proactive claims handling process maximizes your recovery under your program, while minimizing the intrusion and interference to your on-going operations
We leverage our strong relationships with major leaders, loss adjusters and lawyers to help expedite the claims process
Access to our sophisticated pre-loss consulting and effective post-loss recovery services.
Our starting point when structuring a new policy is to precisely understand your needs. Our brokers sit alongside a team of risk analysts drawn from security, technical and academic backgrounds.
Their substantial knowledge is utilised to help us understand the precise nature of your risk profile, thereby assisting us in determining the right insurance solution for your requirements.