The future is uncertain and predictions about the economy vary, but the common denominator among economists is that we are heading for a mild recession. The causes are well known;
- Declining consumer confidence resulting in less spending
- End of NOW schemes and repayment of deferred taxes
- High inflation and rising interest rates
- The war between Russia and Ukraine
- And to top it all off: mega-high energy prices.
On the other hand, the labour market is tight, the unemployment rate is just 3.3%. Fortunately, most consumers saved a lot during corona and thus built up a buffer. All in all, a mild recession in Q4 2022 and early 2023.
The right time to take out credit insurance
Why? Because the credit insurance market is very competitive! Because of the low claims ratios of credit insurers, the coverage ratio is very high and the terms are exceptionally good. How this will develop as insolvencies increase remains to be seen. Once cover has been granted, they will not be so quick to withdraw cover without a weighty reason, but will look critically at new applications from new entrants. As a rule, you can lock in prices and conditions for two to three years and therefore you are not dependent on any price fluctuations.
The benefits of credit insurance
- Credit insurance is the ultimate tool for optimising and structuring debtor portfolios. It is a safety net for substantial debtor losses. Credit insurance thus ensures the continuity of your own business
- Credit insurers always have up-to-date financial information from companies because they have to provide cover. This information is of higher quality than that of regular information agencies. Companies also have an interest in a good rating, as supplier credit is becoming increasingly important
- Continuous monitoring of your customers' financial situation
- In case of non-payment by your customer, credit insurers can exert more pressure to still force payment. If necessary, they can collect receivables worldwide
- With credit insurance, financing purchases and accounts receivable from financial institutions is easier and cheaper. Moreover, it provides higher advance payments
Want to know more?
By thinking in terms of opportunities, we help your business grow. The specialists at Xolv will be happy to look with you and advise you on what you can do to get the most out of credit insurance!
