Coface alters the way it prices risk and talks to customers
Xavier Denecker, UK managing director of Coface, says businesses will see trade credit insurance premiums increase and cover reduce if their customers suffer weak trading, the Telegraph reports.
Coface, which has 1,500 business customers in the UK, has begun a two-month transition to new contract terms as it changes its business model.
Past premiums did not accurately reflect the risk that businesses would fail to pay their bills, Coface said. Businesses will have to be more open about their trading performance to keep trade credit insurance cover.
Credit scores published
Coface will give its customers its credit score for the businesses they are supplying to explain decisions to restrict cover and price policies.
Denecker said these scores would be accurate 95% of the time. He encouraged businesses to challenge Coface if they had evidence that trading was better or worse than the insurer understood. Premiums would then rise or fall within 7 days.
"The claim situation has improved dramatically for us and all the credit insurance industry," he said. "We are not in a growth situation but not in a recessionary situation." He added that credit limits were "now coming back to a more normal level".
The Telegraph has a longer interview.
