Trade credit insurance is largely considered a discretionary insurance purchase, but Kimberly Kelly, Founder of Trade Credit Specialty, is on a mission to change that. As one of our newest NDTO Trade Service Provider members, Kelly shares her passion for how trade credit insurance can be leveraged daily to grow domestic and export credit sales safely. Her consultative, client-centered approach is changing views for the better.
Overhead expenses, sales metrics, and achieving quotas can often be barriers to a truly consultative insurance broker relationship. “It’s understandable that larger firms must consider their profitability, but this can sometimes present a conflict of interest. I wanted to eliminate that dilemma, so I created a firm with low operating expenses, allowing me to be a true consultant,” explains Kelly.
Trade Credit Specialty is an insurance brokerage that operates like a consulting firm. Their focus is to advise, support, and provide technical expertise instead of simply selling insurance. Their business model relies on technology to reduce operating expenses and increase efficiencies for both the broker and the client. “It’s this low overhead and increased efficiency that allows us to provide service and expertise at a level often expected from global firms but sometimes not realized with smaller firms,” Kelly explains.
For example, the “Next Steps” page of their website houses time-saving embedded documents. Using the “Virtual Meeting Request” button enables a meeting to be scheduled quickly, according to your schedule. The “Relationships” page offers quick links and forms on demand.
Low operating expenses eliminate the need for sales quotas or revenue goals, allowing the only measure of success to be client satisfaction, which is their mission. “I sincerely want to help businesses, and I have no problem assessing the situation, and if trade credit insurance isn’t a good fit, I’ll admit that.”
So, why purchase trade credit insurance? Great question; here are a few benefits:
- Competition: By relying on a trade credit policy, a company will be able to offer buyers payment options, including higher credit limits or longer payment terms as opposed to limiting themselves to cash-only sales.
- Non-payment risk mitigation: Policyholders can confidently extend terms to new customers or increase credit for marginal customers. Additionally, the responsibility of determining the creditworthiness of these customers is transferred to the carrier, eliminating that task for the policyholder
- Preserved cash flow: Trade credit insurance gives confidence that cash flows will not be interrupted by slow pays or insolvencies, particularly when a concentration is identified.
- Augmented borrowing power: Insured AR will become collateral, allowing banks and lenders to add export, marginal or concentrated risks into the borrowing base.
The examples above illustrate the variety of benefits reaped from an in-force trade credit insurance policy, supporting day-to-day operations beyond filing a claim, and that is Kelly’s favorite part about trade credit insurance. “Trade credit insurance isn’t a policy that sits on the shelf, tapped only in the event of a loss. It is leveraged on a daily basis to support safe growth. It’s really a cost-effective tool,” says Kelly.
Overall, trade credit insurance gives a competitive advantage to the policyholder, eliminates the responsibility of due diligence, and mitigates non-payment risk in both the domestic and global marketplace.