Euler Hermes launches trade credit insurance solution for small businesses

 

Mississauga, Ontario. – Euler Hermes has become Canada’s first private trade credit insurer to offer a customized product to protect micro and small businesses from the risk of not being paid by their customers. The company announced the launch of Simplicity, a new credit insurance designed to help small businesses mitigate their accounts receivable risk in a quick, simple and affordable manner, while at the same time maximizing business growth.

Simplicity is designed specifically for businesses with $1-$5 million in annual sales. The product is intended for companies that are new to credit insurance – it provides a short, clear policy, transparent coverage on all their customers within just one day, and fixed pricing. Policyholders can automatically and immediately protect domestic and export customers in 32 countries, allowing them to focus on safely growing sales without the worry of non-payment.

“According to a recent study, as many as 82 percent of business failures are due to poor cash management,” said David Dienesch, CEO of Euler Hermes Canada. “With Simplicity, small business owners can safely extend credit to domestic and international customers knowing there will be minimized impact to cash flow as a result of non-payment events.”

Simplicity presents a new opportunity for Canada’s insurance broker community to offer unprecedented new value to its clients.  Representing an average of 40% of a company’s total assets, accounts receivable (A/R) is a company’s largest and most vulnerable asset – yet it’s the only one left uninsured. “The value of Simplicity is easy for any broker to convey to its small business clients selling B2B,” explains Jocelyn St-Onge, Euler Hermes Canada’s Head of Strategic Partners.  “Adding this product to a traditional portfolio of P&C insurance offerings creates a truly comprehensive product line for protecting those clients against unexpected losses.” Simplicity is also a rare insurance product that can offset its own cost by helping companies safely grow sales.

In today’s uncertain economic environment, small business owners constantly face new challenges and barriers, while remaining a critical engine for economic growth and job creation. According to the Canadian government, small businesses account for 41% of private sector GDP and 77.7% of private sector jobs.  While net small business formation continues to rise following the recession, small businesses leaders still report managing cash flow, targeting business opportunities and the economy to be among their chief concerns.

Simplicity helps small businesses address these concerns by combining the established expertise of Euler Hermes’ global risk experts with tailored solutions unique to small business needs. Easy to purchase and administer; it eliminates the need for bad debt reserves and frees working capital for product and customer relationship development. Simplicity also provides insights on potential customers, which small businesses often have difficulty accessing.

For Euler Hermes’ customer Packaging Methods Defined, trade credit insurance was critical when the company suffered a six-figure nonpayment by a much larger customer.

“I’m living proof of the importance of credit insurance for a small business,” said Izzy Eisenberg, the company’s owner. “That nonpayment could have put me out of business if I didn’t have credit insurance. Sometimes companies set aside a certain amount – maybe ½ percent – as a bed debt reserve. That used to work back in the day, and might work for a larger company, but now it’s scary. Euler Hermes gives me a lot more strength than I would have on my own.”

For more information on how to add Euler Hermes Simplicity to your brokerage’s product line, contact Jocelyn St. Onge of Euler Hermes Canada at 416-951-6726 or jocelyn.st-onge@eulerhermes.com.

About Euler Hermes

Euler Hermes North America is the world’s oldest and largest provider of trade credit insurance and accounts receivable management solutions. We offer both domestic and export credit insurance policies that insure against commercial and political risk in markets representing 92% of global GDP. Euler Hermes maintains a database of proprietary information on more than 40 million companies worldwide and is rated A+ (Superior) by A.M. Best and AA- by Standard & Poor’s. To learn more, visit eulerhermes.ca/en