Hub acquires Canadian credit risk brokerage

Hub International Limited has announced the acquisition of Global Credit Risk Management Inc. (GCRM), a Canada-wide independent broker of accounts receivable and political risk insurance.

With a national presence and offices located in Ontario and Alberta, GCRM provides accounts receivable insurance and advisory services to businesses of all sizes. Customers include manufacturers, commodity traders, the services sector, finance professionals, and Canadian banks and other financial intermediaries.

Hub announced the acquisition of GCRM on Thursday; terms of the transaction were not disclosed. The principals of GCRM — John Middleton, Athan Bardis and Eric Pilon — and their team will join Hub Ontario and report to the Ontario leadership team.

“GCRM joining Hub supports its specialty practices, including financial institutions, by complementing and strengthening Hub’s comprehensive and in-depth offering to all industries, banks, lending institutions and investment firms,” Hub said in a June 3 press release.

Accounts receivable insurance protects receivables from losses resulting from payment defaults, insolvency or repudiation by buyers, and cancellation of export of import permits, GCRM explained on its website. The insurance protects a company’s most liquid non-cash asset from loss due to bad debt, and enhances borrowing capacity, as financial institutions will lend more against insured accounts receivable (up to 90%).

Political risk insurance is a risk transfer tool to protect a company’s overseas sales, assets and investments from losses resulting from:

• Currency inconvertibility — the inability to convert foreign currency to contract currency, or to transfer hard currency out of a foreign country
• Cancellation of export or import permits by government
• War or civil unrest in foreign markets
• Breach of contract
• Expropriation, confiscation, nationalization, and deprivation of rights of ownership or control over assets
• Non-payment by a sovereign buyer

Benefits of this type of insurance include protecting foreign assets and investments against losses arising from unforeseen actions by a foreign government and lowering the risk of establishing an overseas or global presence.

Feature image by iStock.com/champlifezy@gmail.com