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Navnit Kumar(Credit Risk Manager)

IDEAL Insurance Brokers Pvt LtdMOBILE: 9820141918

Email: navnit.kumar@idealinsurance.in

CREDIT INSURANCE

Insurance Brokers

Insurance brokers are independent intermediaries who represent the client and not the insurance company, unlike an insurance agent who normally represents the company 

What do we do…

We market Insurance Solutions for

“ALL INSURANCE COMPANIES”

Life & General

Public & Private

“Product Range”

ALL TYPES OF INSURANCE

Identify and evaluate your needs Design your Insurance Portfolio

Choose the Right Product

Negotiate with the Companies for the most

competitive rates

Assist in documentation

Claims Management- After all money matters

Claims Handling

Legal Representation

And what do we do for you…

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WHY CREDIT INSURANCE?1. Protection against bad debts2. Financing3. Balance-sheet Protection4. Corporate Governance5. New Markets6. Debt Collection7. Information, screening of clients8. Reduction of fixed overheads9. Relax existing credit conditions

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Credit Squeeze: Is your customer still credit worthy?

“We’re still waiting to be paid by our

customer”

“We’re not going to pay since you put a

freeze on shipments”

“The signatory is away”

“We need a few days more to make

payment”

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The Concept of Credit Insurance

Commercial Non Payment Risk Political Non Payment Risk

InsolvencyDefault

Government MoratoriumWarNatural DisasterNon-transfer of FundsImport License Cancellation

Insures companies against the risk of non-payment by their customers as a result of commercial &/or political risks

LOCAL PLAYERS

1. ECGC

2. NEW INDIA (ATTRADIUS)

3. TATA AIG (EULER HERMES)

4. ICICI LOMBARD (COFACE)

5. BAJAJ ALLIANZ (EULER HERMES)

6. IFFCO TOKIO (QBE)

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ECGC-An Export promotion Institution

– Provides credit risk covers to Exporters against non payment risks of the overseas buyers / buyer’s country in respect of the exports made.

– Provides credit Insurance covers to banks against lending risks of exporters

– Assessment of buyers for the purpose of underwriting– Preparation of country reports– International experience to enhance Indian capabilities– An ISO organization excelling in credit insurance

services– Rated “AAA” by CRISIL for claim paying ability

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ECGC SERVICES

• CREDIT INSURANCE COVERSCREDIT INSURANCE COVERS to exporters against Credit Risk to exporters against Credit Risk losses in export of goods & services both under Short term and losses in export of goods & services both under Short term and Medium and LTMedium and LT

• CREDIT INSURANCE COVERS CREDIT INSURANCE COVERS to banks to protect them against to banks to protect them against risks of non payment by exporters both under Short term and Medium risks of non payment by exporters both under Short term and Medium and LTand LT

• DOMESTIC CREDIT INSURANCE COVERS DOMESTIC CREDIT INSURANCE COVERS toto Exporters and Exporters and Banks in respect of their local sales and working capital finance, Banks in respect of their local sales and working capital finance, respectivelyrespectively

• OVERSEAS INVESTMENT CREDIT INSURANCE COVERS OVERSEAS INVESTMENT CREDIT INSURANCE COVERS to to protect Indian Entrepreneurs investing in Overseas Ventures protect Indian Entrepreneurs investing in Overseas Ventures (Equity/Loans) against expropriation risks(Equity/Loans) against expropriation risks

• EXCHNAGE FLUCTUATION COVERS EXCHNAGE FLUCTUATION COVERS to exporters to protect to exporters to protect them in respect of their exchange losses under Medium and LT exportsthem in respect of their exchange losses under Medium and LT exports

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Benefits to Exporters

Reduces Financial Risk

Protection against trade credit risk losses

Releases bad debt provisions

Hedges against financial catastrophe

Claims payment

Maximises debt collection

Better access to finance

Credit check and control

Creates discipline and control

Offers a second opinion

Fewer bad debts

Encourages mostattractive terms

Improves financial health

Check on potentialprospects

Improves Cash Flow

Supports Credit Management

Improves Sales

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Payment Risk

Goods Receivables

Exchange RiskLoss or Damage

Marine Insurance

Hedging by Authorized Dealers

CREDIT INSURANCE

EXPORT EXPORT INSURANCEINSURANCE

RISK COVERED BY ECGC

13LC

RISKS

POLITICAL RISK (Open Cover

and Restricted cover )

COUNTRY BUYER BANK

LC / NON – LC

COMMERCIAL RISK

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WHAT IS NOT COVERED ?

1. Loans2. Leasing 3. Guarantees4. Disputes5. Risk on private persons

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Contractdate

Shipment andinvoice date

Credit Period

Probableloss

Protracteddefault

Due date

ManufacturingPeriod

•set credit limits •send invoices•declare turnover

•due date •apply internal credit management procedures

• declare over due (file a – ROD)

•stop further shipments

• start collection• submission of claim

180 days 30 days

waiting period

120 days

Maximum Extension Period

InvoicingPeriod

30 days2 months

• declare over due

Claim payment

HOW DOES IT WORK

Products offered to Exporters

• Standard Policy • Small Exporters policy• Specific Shipment Policy (short term)• Export Turnover policy• Specific buyer wise policy• Consignment export ( Stock holding agent)policy• Consignment export (Global entity) policy• Single buyer exposure policy• Multi buyer exposure policy• Software project exports policy• IT enabled (single customer) policy• IT enabled (multi customer) policy• SME Policy• Customer specific policy (Tailor made)

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ECGC COUNTRY CLASSIFICATIONS

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GroupOpen Cover

Restricted Cover

(Category I)

Restricted Cover

(Category II) Total

A1 63 0 0 63

A2 34 0 0 34

B1 38 1 1 40

B2 26 3 1 30

C1 37 11 4 52

C2 3 5 2 10

D 4 1 3 8

Total 205 21 11 237

EXPORT STIMULUS PACKAGE

• Additional cover of 5%, subject to maximum protection of 95% available for all MSME exporters

• All exporters of Textiles ( including handicrafts and handlooms), Gem & jewellery, leather, engineering goods, carpets, project goods, auto components and chemicals will also get the additional protection of 5%

• Additional cover through the National Export Insurance Account of the GOI

• Bank advances to MSME borrowers for exports will get an additional protection of 10% subject to maximum protection of 85% under the Credit Insurance covers to banks

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IDEAL Advantage

• We are leading Broker in Credit Insurance.

• The expertise we have enables us to get the right policy with right coverage in time.

• We have special presence in Jewelers & Diamonds industry(Gold Star,RT Star, Ideal Jewels,S rasiklal, M Tarunkumar etc)

• No Hassel to exporters & all services at their door step that too without any cost.

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Questions Welcomed !

Thank you