The insurer cuts €200,000 from the credit limit of your largest customer.

The Sales team, however, already has the next order in front of them and says:

“Let’s go ahead as usual.”

What do you do?

You don’t simply call the insurer and ask them to “give the limit back.”

First, you want to understand what has changed.

• Is it the customer’s financial position?
• Has there been a change in their payment behaviour?
• Is there something affecting their industry?
• Has the country risk increased?
• Has new adverse or confidential information come to light?
• Or has the insurer’s risk appetite changed?

Then you look at your own actual exposure.

• How much is currently outstanding?
• How much will your exposure increase if you invoice the next order?
• How much of that exposure will remain insured?
• And ultimately, how much risk are you prepared to retain yourself?

Only then does it make sense to engage with the risk underwriter of the insurance company.

And you don’t go in saying:

“I want my credit limit back.”

You go in with data, arguments and a well-supported assessment of the risk.

I say this having sat on both sides of the table.

I started my career as a credit insurance analyst.
I was an underwriter.
And I was fortunate enough to work with what I believe was one of the best teams the market has seen over the past 25 years.

That is why I believe the role of a broker is not to prove to the underwriter that they are wrong.

It is to present enough relevant data and sound arguments to give the underwriter a reason to reconsider the decision.

To give them a reason to say: “OK. Let’s take another look.”.

And that is a very different thing.