Through the Peak Re trade credit partnership ecosystem, cedants have access to quality-information source-and also benefit from Peak Re’s advice and consultation as a reinsurance partner focused on developing sustainable value into the future.
In line with the Company’s vision and mission of supporting the reinsurance needs of emerging Asia, Peak Re has successfully developed a business solution that paves the way for a new trade credit ecosystem and empowers medium-sized local insurance companies in emerging markets to deliver a better and more complete service to their customers.
Traditionally, trade credit insurance has been a specialist line of business, with mid-size insurers acting as intermediaries for the small group of large, global underwriters that dominate the industry.
Despite the tremendous growth potential of trade credit in the emerging markets, these types of referral relationships do not allow for the kind of knowledge- sharing that would enable local insurers to develop their own capability.
To issue a policy, insurers need to understand the credit risk they are taking on, but the information needed to develop such understanding is not accessible to medium-sized local insurers. The sheer number of counterparties that potential customers may be trading with requires a dedicated operation in its own right, which is prohibitively expensive to implement.
Because we understand this pain point, Peak Re has been working to build a solution that eliminates this weakness and allows our cedants an opportunity to provide trade credit insurance to their customers with enhanced experience.
Through the Peak Re trade credit partnership ecosystem, cedants have access to quality – information source – and also benefit from Peak Re’s advice and consultation as a reinsurance partner focused on developing sustainable value into the future.
How does it work?
The ecosystem we have created is built on a partnership with – a fintech company that specialises in credit insurance, surety and trade finance, and provides a best-in-class credit risk underwriting platform that integrates data and decision analytics, and process automation. Peak Re provides reinsurance capacity and co- underwriting.
This partnership solves the cedants difficulty in gaining access to accurate and quality information source -. In turn, this allows them to retain control of the customer relationship and thereby provide an enhanced experience, delivered with greater responsiveness and more confidence.
Why are we doing it?
Our goal is to deliver a trade credit ecosystem in the emerging markets that empowers medium-size local insurance companies by making it easy for them to do business.
“By working together with us and our fintech partner, our clients can gain the knowledge to develop their own business processes,” says Jasmine Miow, who oversees the South Asian, Southeast Asian, Middle-East and North American markets at Peak Re. “These are the building blocks for success that will help cedants to retain knowhow in-house. And that means they can provide quicker turnaround and quicker feedback.”
For Peak Re, this initiative provides another opportunity to capitalise on growth in the emerging markets. It also helps us to steer our portfolio through greater control in the system in the form of best practices, risk quality control, reporting and exposure control.
The opportunity is clear. Trade credit insurance is still a young product in Asia and the potential is significant given that this region is firmly at the centre of global trade — and global economic growth. Increasingly, businesses in the region are understanding the cost of payment defaults and bad debts, particularly as supply chains becomes more global, more complex and therefore more difficult to risk manage. As some recent examples have demonstrated, the failure of a single large customer can be ruinous for a business operating on thin margins. Even for companies that set aside cash to cover such risks, trade credit insurance offers the opportunity to free up capital to earn a return or invest in growth.
