Cover stories

International trade: the lifeblood of Asia

The continent has continued to prosper due to the fact that its goods are exported both within the region and further afield.

In order to keep this flow of commerce pumping round the region it is key trade finance is available. And in order to facilitate this Singapore has become the banking hub for Asian trade finance.

Parallel to the banking hub the island now hosts a thriving insurance market that provides vital support by offering trade credit insurance. Trade credit insurance is key to how banks finance international trade giving essential protection on deals and allowing banks to extend lines of credit.

As globalisation has helped lift barriers to trade around the region it has also raised risks, including that of default on payments. Trade credit insurance alleviates that risk by covering the creditor, whether it is a bank or trader.

Trade credit insurance is vital for building commercial confidence and security. Our trade credit division provides expert knowledge of commercial counterparty and country risk throughout Asia-Pacific and across all trade sectors. The team can provide global solutions as well as tailor policies for specific credit risks, markets and contingencies. The key benefits for clients include balance sheet/cash flow protection; improved terms for bank financing facilities; an effective alternative to letters of credit or other types of collateral; reduced need for bad debt reserves; increased potential for sales growth to new and existing buyers because credit is based on a firm foundation; and risk transfer to satisfy capital adequacy requirements.

Trade credit insurance has advantages to all in the chain of commerce – the manufacturers, the traders and the banks. It is commonly used to cover trade debtors, but can also be used to finance the payables of a buyer.

Trade credit insurance can provide the finance-related solutions that allow deals to go ahead with confidence.

As one of the region’s leading underwriters of trade credit Markel operates in Singapore offering cover for banks and exporters alike.

 

Types of cover:

  • Commercial perils
  • Political risk perils