Helping Companies Minimize Risk and Expand Sales

PDF File: 

cfo3_5_141_sp_euler.pdf

Euler Hermes ACi

Euler Hermes ACI is North America’soldest and largest provider oftrade credit insurance, protectingmore than $150 billion in U.S. tradetransactions annually. The companyis the U.S. subsidiary of the EulerHermes Group, which monitors morethan 43 million companies and hasoffices in 49 countries and on sixcontinents.

Can a company be innovative even though it has been offering basically the same product for more than 100 years? Of course it can, and Euler Hermes ACI proves it. Euler Hermes ACI – which began as American Credit Indemnity (ACI) – has insured and managed trade receivables in the United States since 1893, which makes it the oldest trade credit insurer in the world. Euler Hermes ACI is the U.S. subsidiary of the Euler Hermes Group – the global trade credit insurance market leader. Euler Hermes is a subsidiary of AGF and a company of Allianz.

“Traditionally, American businesses are ‘risk takers,’ and they take little precaution against the risk of bankruptcy of their suppliers, contrary to their European counterparts,” says Paul Overeem, CEO of Euler Hermes ACI. “There are several main reasons for this, such as domestic suppliers feeling more comfortable dealing within their own geographic market and many businesses having invested in fortifying their own credit management infrastructure.”

Protecting receivables has become increasingly important for U.S. public companies also due to Sarbanes-Oxley, as CEOs and CFOs must do everything in their power to keep their financials in compliance and answer to their stockholders. Trade credit insurance offers a solution for directors and officers – by purchasing a trade credit insurance policy, a company retains an objective third party that can review existing and new buyers and steer a company away from potential pitfalls. “The trade credit insurer becomes a major partner in the sales and credit management process by vetting and monitoring buyers,” Overeem says. “In most instances, that is a welcome reality check that allows a company to make more informed decisions about the granting of credit.”

Still, many companies entering a new market don’t even realize which risks they face. Payment delays, commercial practices, the legal environment, political uncertainties – all these factors and many more can be found in a market with which you’re not familiar. “Many top managers see the risks, but they overestimate their own strengths and capabilities and think they will be spared from bad experiences,” says Overeem. “Others don’t even know that credit insurers can advise and protect them.” And then there are those who shy away from new markets because the risks seem too high – they too can be helped. In addition to insuring receivable risks and recovering bad debts, Euler Hermes ACI updates its clients on relevant global economic and political risk issues.

A trade credit insurance policy can allow a company to expand into new markets by providing the business intelligence needed to choose the right buyers. “Moving into a new market creates a new set of risks, because you have a lack of information, a lack of experience and/or a lack of proximity to the debtor or debtors,” says Overeem. “Again, a Euler Hermes ACI program closes all those gaps for our policyholders.”