Securing your trade receivables from commercial and political risks.

Trade Credit Insurance for Bank and Financial Institutions

Financial Institutions, specialty lenders and investors use Trade Credit Insurance to protect international trade payment facilities, general corporate loans and other financial assets against default

Why use trade credit insurance

The broad applicability and flexible policy wordings offered by insurers across the world to best fit the needs of financiers, makes trade credit insurance a reliable risk mitigation technique. Some of the advantages include

  • Use insurance as a qualified risk mitigant to meet with international accounting standards under Basel II/III.
  • Ability to hold assets on your own books with a lesser risk weightage. This reduces the reliance on seeking risk participation from other lenders, including partial or complete sell down of assets
  • Increase lending capacities with the help of management of internal obligor limits and country limit constraints.

Prowess has its finger on the pulse of the market and is able to deliver on economical solutions with the right amount of coverage for your needs. With our ability to structure policies and coverage terms, Prowess is known in the insurance world to bring forth unique arrangements. Our forte continues to be the development of the insurance world for the risk requirements of the emerging world.


How does it work?

How can insurance help?

Bank to Bank Trade

FI risks contribute to a major chunk of revenue for any bank but at the same time also pose as a heavy risk on the balance sheet of banks. Insurance steps in and allows banks to participate on these risks and also gain from the knowledge base of insurers which allows them to pre-empt defaults, manage their internal credit metrics and free up capital for further lending. Some such FI risk covers include
• Letters of credit
• Bankers acceptances
• Trade acceptances (drafts)
• Trade loans (bilateral and syndications)

Trade related corporate lending

Every trader looks towards support from its financier to be able to increase his business and grow his balance sheet. However, capital constraints and country risk limitations usually constricts trades. Insurance can assist by offering insurance for various financial transactions offered to corporate, such as
• Import and export financing (revolving facilities)
• Pre-export financing
• Purchased Accounts receivables
• Accounts Payable financing
• Foreign accounts receivables

Captive Insurance

Supply chain platforms today work in sync with insurers, which allows these platforms to extend finances to companies across the world. However, to reduce the dependency of having to go to the markets for every single transaction and to increase their control on the portfolio, many such platforms are now resorting to captives. Increased indemnities, shorter time lags for getting insurance covers and ability to define its own geographical reach and country limits, allows supply chain platforms to effortlessly integrate insurance into its credit metrics and financing decisions.