Technical Details of the Credit Insurance

The credit I still find very interesting technically and from time to time you might take a blog post. I remember writing about the old days of use factor of the amount paid. We put ourselves in background, credit insurance is the default risk of a commercial transaction. Companies that hire need to have very accurate information on credit sales to their customers to call debtors. This information has to be in possession of the insurance company covering the operation and that in case of loss sets the maximum amount to indemnify the insured (value claims). That is, the insured “communicates” to the insurer the amount of the sale to the debtor and the insurer assumes the risk of default on a percentage of the total, has a guaranteed percentage. As an aside, credit insurers also provide information on debtors, receivables management, … But the fundamental role of credit insurance is to assume the risk of default for transactions of debtors to its policyholders, this function is essential for the development of a country, that’s clear.

But credit insurers are faced with a “problem” is almost impossible to adjust the amount granted to borrowers with the actual amount of the sale. The insurer has global sales of the insured, not the debtor. It is also common among policyholders sell for a lower amount than the amount paid, why? because the company guarantees a percentage of the sale, not the total. If no default occurs not know the amount of the sale, the tendency of the insured is to ensure higher sales, in the case of default by the debtor, the guaranteed percentage on the sale covers virtually all of the sale. It’s a bit messy but it is a stance “very Spanish,” an example to facilitate understanding of the problem:

A sells to B, C and D in the amount of € 100,000 per year. The company must guarantee a% of sales 80%. A cover with our company sales to B for € 30,000 other operations are not covered, then has a given amount of 30,000 €. If A has a claim for unpaid B should receive 30.000×80% = € 24,000, but A “lies” in sales and sell the amount of 25,000 €, ie, actually uses 83% of condedido. I call this% usage factor of the amount paid. Technically it is a measure of great importance for the credit insurance because it is a measure of the amount at risk in the transactions necessary for the estimation of the amounts of accidents. Hence its technical importance How to calculate this factor for use? This is problematic if the concept can be hard its estimation causes the tears to more than a technician. Someday tell you how we can bring this factor to use.