In Mexico, the total value of credit insurance premiums is about 1,300 million pesos, which is only 0.064% of GDP (the average in Latin America is 0.089), according to Solunion México, a company specializing in services related to credit insurance and commercial risk management.
“Credit insurance has great potential for development in Mexico. Only about 4,000 companies have a policy. For this reason, one of our challenges is to bring insurance closer to small and medium-sized companies, which are also not free from commercial risk. There are”, explains Jose Luis Iranzo, general director of Solnian Mexico.
“We design tailored solutions both in terms of coverage and price, it is a tailor made suit”.
This policy not only protects accounts receivable from companies; It also offers benefits such as collection management, monitoring of the insured’s current and future customers as well as support in terms of business risk in internationalization if you are looking to export.
“At Solunion we rely on a database containing information on more than 80 million companies around the world. In this way, we provide our policyholders with permanent monitoring and keep them informed about the developments of our clients, whether in Mexico or in any other part of the world, said Roberto Ricalde, the credit insurer’s risk director in Mexico.
With figures due at the end of December 2022, Solunian Mexico’s premiums increased by 25%; Whereas, in 2021 it registered an increase of 5%. In terms of technical reserves, the company has four times more than is required by law. Thus, the joint venture guarantees the commitments and obligations with its policyholders.
Although the percentage of credit insurance penetration in the country is lower than the Latin American average, the truth is that Mexico ranks above other countries in the region such as Argentina, Uruguay and Costa Rica.
Credit is an investment for insurance companies
“A credit policy anticipates financial security for companies. It is a guarantee and certainty that, if one of your customers cannot pay you, you call Solunian and we will take care of your collection or pay off the total amount of the loan. Will compensate between 85% and 90% of the amount. This makes it possible to ensure business continuity”, comments Bernardo Barrera, Commercial Director of Credit Insurer.
How does credit insurance work?
In Solunian’s case, the four benefits of this coverage are clear:
, Company’s customer monitoring, These reviews tell you whether there is any risk of default and are done one to three times a year.
, accident report. If the company reports default, which typically occurs 90 days after the invoice becomes due, Solunion has 120 days to collect. If that time elapses, the claim is paid the next day, for an amount between 85% and 90% of the loan.
, debt recovery, Once Solunian compensates the insured, the overdue invoice already belongs to Solunian, so it continues with the collection process.
If Solunian is successful in collecting the invoice, it takes the amount for which it paid compensation and the rest is delivered to your client,
