Europe/USA “Combined excess of loss” program including a second shared maximum liability

Background and objectives :

To set up a comprehensive programme covering the European and American subsidiaries of a major oil company, giving the policyholder optimum insurance and financial terms & conditions in response to concentration of risk within a few major industrial groups of companies.

Solution put in place :

A coordinated Europe/USA combined excess of loss programme with a single insurer was rolled out, with uncancellable 12-month credit limits and complete freedom given to the insureds to approve credit up to a certain threshold (several million US$ and €). Beyond that threshold, credit limits set in conjunction with the insurer. The maximum liability figure applies to the programme as whole.

Benefits for the policy holder :

– Harmonisation between Europe and the USA of policy towards credit insurance
– Consistent cover on buyers that often have global reach
– Budget savings on the programme through all-encompassing negotiation
– Major risks covered + a second maximum liability making it possible to handle unusual risks.

« Excess of loss – Non-cancellable credit limits » policy

Background and objectives :

A subsidiary of a large oil company, looking for cover on a limited number of airlines (in Europe, Africa, Asia and America) with very high outstanding credit balances (over €100m) and delivery contracts running for several years.

Solution put in place :

An excess of loss policy, with buyer scope confined to major risks, credit limits uncancellable for 12 months, and collection procedures left in the hands of the insured.

Benefits for the policy holder :

– Major risks covered
– Long-term cover (12 months)
– «Group cover», resulting in a consistent credit policy towards buyers belonging to a given group of companies.

« Multi-Buyer » policy

Background and objectives :

A subsidiary of a world leader in the chemicals industry, needing the expertise of an insurer to confirm the appropriateness of its credit decisions and cover a panel of buyers with high levels of outstanding balances, excluding major oil companies and “smaller” buyers.

Solution put in place :

“Deglobalisation” of insurance arrangements, in the form of a multi-buyer policy involving some ten named buyers, all key accounts, monitored by joint risk underwriting.

Benefits for the policy holder :

– Cover of high-intensity risks posed by a group of buyers viewed as high-risk ;
– Lower budget ;
– Cost control through a fixed-price premium.

“Pure Excess of Loss – Top 10 Monitoring” policy

Background and objectives :

A subsidiary of a major oil company, already running structured credit management, needing protection against a major risk, or against an important increase in frequency of claims.

Solution put in place :

An excess of loss policy, including policy features appropriate to the policy holder, with : Top 10 buyers checked once a year by the insurer, insurance and financial terms & conditions being fixed for a three-year term even if the level of claims turned out to be high.
Policy subsequently duplicated in another country for a subsidiary facing identical issues, with another insurer and local management provided by a partner broker in our international network.

Benefits for the policy holder :

– Credit management process unaffected by credit insurance;
– Major risks covered.