Allianz Trade in North America, the world leader in trade credit insurance, today announced the release of a new report that explores the state of credit management at B2B companies amid uncertain economic times.
The report — which includes original research driven by the results of a CFO Dive survey of 150 finance executives — also explores how companies can bolster credit management protections and minimize risks.
Allianz Trade’s findings show that three out of five CFOs (60%) foresee a recession or economic downturn in the next 6-12 months, and even more (64%) are concerned about the potential for their companies to experience customer insolvencies or bankruptcies over the next 6-12 months. The consequences of those clients or customers going under could be steep — as more than three out of four CFOs (77%) agree that experiencing multiple customer insolvencies or bankruptcies at the same time would have an impact on their companies’ solvency.
Despite the risks, Allianz Trade’s research shows companies continue to bring in new customers or clients at a steady clip. Four out of five CFOs (79%) report that their companies add three or more new clients or customers every month, and many companies are entering new markets: More than half of CFOs (57%) report that they are trying to increase sales by expanding to new countries they have not traded with in the past.
Yet as the Allianz Trade report details, adding clients and entering new markets can make it harder to know who you're doing business with. Sound credit management practices — including trade credit insurance — can help companies balance their desire to grow with their need to mitigate risk.
Allianz Trade’s research shows that trade credit insurance is an underutilized resource. (Only 37% of CFOs, for example, have ever used trade credit insurance to protect their receivables.) Trade credit insurance can supplement and enhance a company’s existing credit practices, helping them make well-informed decisions when it comes to extending credit.
“Trade credit insurance fills non-payment gaps, but it also provides companies with the information and resources they need to avoid non-payment scenarios,” says llen Gebarowski, Regional Vice President of the Northwest at Allianz Trade in North America. “We’re excited to release this report to help CFOs understand how to bolster credit management and put trade credit insurance to use to protect their businesses from the unforeseeable.”
The full report, Exploring the State of Credit Management in Uncertain Times, features insights from Allianz Trade experts — including leading economist Dan North, Senior Economist at Allianz Trade North America. To access the full report, click here.
Research results are based on a CFO Dive online survey of 150 finance executives from business-to-business companies.
Allianz Trade in North America is the global leader in trade credit insurance and a recognized specialist in the areas of surety, collections, structured trade credit and political risk. Our proprietary intelligence network analyzes daily changes in corporate solvency representing 92% of global GDP. We give companies the confidence to trade, and be paid. We compensate your company in the event of a bad debt, but more importantly, we help you avoid bad debt in the first place. Whenever we provide trade credit insurance or other finance solutions, our priority is predictive protection. But, when the unexpected arrives, our AA credit rating means we have the resources, backed by Allianz to provide compensation to maintain your business.