Credit where it’s due

Global recession has put the credit insurance market through the most difficult period in its history.  As business failures took a dramatic rise, claims flooded in to insurers from companies incurring bad debt losses caused by the insolvency of their customers
From being a relatively specialist area of the insurance market that rarely hit the headlines, credit insurance was promoted to front page news in the financial press. The industry received criticism for reducing available cover and increasing premiums; and coverage was sprinkled with selected high profile failures, and perceived early withdrawal of cover for suppliers.
“Insurers were forced to defend their actions and reputations, despite paying out millions of pounds on the insolvencies of firms such as Petroplus in early 2012, and Connaught Rok in the construction sector.  In the retail sector, the collapse of Woolworths saw companies facing multi-million pound claims,” said Paul Martin, managing director of the John Reynolds Group.
“Pre-recession days had seen credit insurance companies operating in a relatively benign economy. Claims levels were easily manageable, premiums were very low and the amount of cover being written for policy holders was at an all time high.  During the worst days of the recession there is no doubt that, in the face of unprecedented claims levels, some insurers took action deemed necessary to balance the risk being written for the premium income being received. Cover and premiums could not be sustained at pre-recession levels, and insurers had to make a call on when they felt suppliers should no longer be insured if a business hit upon hard times. Mistakes were made and lessons learned during the process.”
However, Paul believes that communication with policy holders is superior, and cover has improved as a result. “A no benefit of the doubt attitude has been replaced with a credit where it’s due mentality. Competition in the market has returned and non cancellable credit limit cover is being developed.  While high levels of insolvencies are likely to continue during the economic gloom, the good news for businesses is that credit insurers have the capacity to offer increasing levels of cover.”
Credit insurance from Reynolds Trade Credit is a bespoke product, designed for the individual needs of a client’s business.  Access to credit information can also help grow a business rather than simply protect against bad debts.  It can form an integral part of an existing strong credit management process.
As a business changes, the insurance is designed to develop alongside, meeting the client’s needs for the lifetime of the relationship.
A fully integrated system
OAMPS Petrochemical – part of the OAMPS (UK) Group – handles in excess of £45m in premiums and manages over 6500 claims each year in the UK and Ireland.
“We fit insurance to your business rather than trying to fit your business to an insurance product,” said scheme director, Ros Bayley.
Each policy is written and designed with industry trade associations and underwritten by leading global insurers, including Zurich and QBE.
“Our complete selection of specialist insurance products is carefully tailored to the needs of these sectors, bringing peace of mind to a vast range of clients from sole traders to multinational conglomerates,” added Ros.
“With over 25 years’ experience, we can carefully identify sectors where although the general perception of risk is high, our experience can identify the true hazard.  The risk can then be lowered through the utilisation of our specialist risk management services.”
OAMPS customers receive access to a 24-hour environmental emergency response facility operated by OHES Environmental as standard.
A UK-wide network of Level 2 spillage responders – giving customers advice at the scene of the incident – is available, with experienced personnel always on call.  Subsequently, a specialist environmental team can be rapidly deployed to co-ordinate remediation activities and provide on-site advice.
For larger incidents, a Level 3 response is provided enabling emergency clean-up response to be mobilised.  The team holds a national database of pre-screened, accredited specialist contractors to facilitate the quickest and most effective response for any emergency.
The network is activated on a daily basis and handles over 900 projects a year.
“Through listening to our clients and trade partners, we have continued to evolve and innovate our insurance offering.  In this fast moving industry OAMPS prides itself in keeping ahead to make clients lives easier,” explained Ros.
Consequently, OAMPS has updated policy covers to include automatic occupational personal accident insurance for employees, and removed the hassle at claim time by having an ADR approved vehicle recovery partner, in case a tanker should roll.
Additionally, the company now provides a Level 1 24-hour specialist advice over the telephone on how to handle emergency situations. In addition to automatically benefitting from the higher level responses, by accessing this service customers can receive a fully integrated incident response system.
The incident advisors, who provide authoritative and calm advice, are all chemists with an understanding of supply and transport legislation.

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