WTW launches new insurance-backed trade credit facility in ‘challenging’ market

Global broker  WTW and Citi have launched an innovative trade credit insured AR facility with Great American Insurance Company – FCIA Trade Credit & Political Risk - to support clients in the current “challenging trading environment”.

The facility delivers a portfolio based, long tenor Accounts Receivable (A/R) financing solution by combining the benefits of two existing insurance products. The combination benefits the seller by offering insurance coverage not typically available under a traditional multi-buyer trade credit insurance facility.

The trio suggested that despite both Long Tenor and portfolio based insured A/R financing having both been employed by financiers for years, the combination brings two key benefits.

Firstly, it allows sellers of long tenor accounts receivables the ability to access capital on these discounted receivables, rather than waiting for the full tenor to be fully paid.

Secondly, a portfolio of strong and weaker credit risk obligors allows for an “all-in” blended rate that can make for an attractive and feasible premium rate for many insureds.

Scott Pales, senior vice president - political & credit risks, financial solutions, WTW said: “We are delighted to bring this new facility to forward to benefit our clients who are seeing the trading environment facing a multitude of challenges. We thank Citi and FCIA for their help in developing this new insurance-backed facility which underlines WTW’s leadership in the Trade Credit space. We believe this blueprint will open up many additional opportunities.”

Adoniro Cestari, global head of TTS trade products & structuring of Citi, said: “With growing demand for insurance-backed receivable financing solutions globally coupled with strong support from insurers we hope to bring more innovation in the journey of excellence and enhanced client experience. This also opens up replication opportunities with other insurers in near future for wider client coverages.”

Andre Python, divisional Sr. vice president, FCIA chief underwriting officer, added: “FCIA is pleased to once again be part of the solution and offer its decades of knowledge and expertise in underwriting and drafting innovative policy wordings into yet another successful insurance program. We look forward to working with Citibank, WTW, and others to support trade transactions in a world where uncertainties are certain and trade credit insurance plays a vital role in providing companies and banks with peace of mind.”

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