Welcome to the second segment of our exclusive interview series, featured in our Trade Watch newsletter. In this series, we dive deep into the world of Trade Credit Insurance with industry experts.
In this second feature, we interviewed Antoine Najem, Consultant DERAYA INSURANCE BROERS based in Riyadh, to explore the current trends and developments of Trade Credit Insurance in The Kingdom.
Interview with Antoine Najem
Question 1: What are the current trends and developments in trade credit insurance that are currently shaping the market in KSA, and how might these impact your approach to promote trade credit insurance among your clients?
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The trade credit insurance market in KSA is undergoing a significant transformation, driven by several key trends:
- Economic Diversification: Saudi Vision 2030 is creating new trade opportunities, increasing demand for risk mitigation tools like trade credit insurance.
- SME Growth: The government's focus on fostering small and medium-sized enterprises (SMEs) is expanding the pool of potential clients, as these businesses often face unique challenges in securing trade finance.
- Supply Chain Disruptions: Recent global events have heightened demand for trade credit insurance to safeguard against payment defaults due to disruptions.
- Digitalization: The rapid adoption of digital technologies is revolutionizing the insurance industry. Insurers now offer online platforms for quoting, policy issuance, and claims management, making trade credit insurance more accessible and convenient.
At DERAYA, we are staying ahead of these trends by:
- Education and Awareness: We are actively educating our teams and clients about the benefits of trade credit insurance through joint visits, workshops, targeted marketing campaigns, and soon, through webinars.
- Digital Innovation: We are embracing digital technologies, such as [example of a specific tool or platform], to enhance the client experience and streamline the insurance process.
- Customized Solutions: We understand that each client is unique. We work closely with them and insurers to design bespoke trade credit insurance packages.
- Strategic Partnerships: We are forming strategic partnerships with leading credit insurers like Allianz Trade Middle East to offer our clients the most comprehensive and competitive coverage options.
Question 2: What are the key challenges and opportunities for businesses seeking trade credit insurance in the kingdom?
Businesses in KSA face both challenges and opportunities when it comes to trade credit insurance:
- Lack of Awareness: Many businesses are unaware of the benefits of trade credit insurance or underestimate their exposure to trade credit risk.
- Cost: Trade credit insurance premiums can be a significant expense, especially for businesses with high credit risk profiles.
- Lack of Historical Data: In emerging sectors like Renewable Energy or Entertainment and Leisure, limited credit history data can make risk assessment more complex.
- Complexity: The insurance terms and conditions can be complex, making it difficult for businesses to understand their coverage.
- Growing Market: The increasing number of businesses engaged in domestic and international trade is driving demand for trade credit insurance.
- Risk Mitigation: Trade credit insurance provides a valuable safety net for businesses by protecting them from the risk of non-payment by buyers.
- Improved Cash Flow: Businesses can use trade credit insurance to improve their cash flow by borrowing against insured receivables.
- Competitive Advantage: Offering trade credit terms to buyers can give businesses a competitive edge.
- Access to New Markets: Trade credit insurance can help businesses expand into new markets by mitigating risks.
Get Started with TCI
Interested in capturing the benefits of Trade Credit Insurance (TCI) to grow and protect your business? Get an instant online quote now: https://www.allianz-trade.com/en_AE/online-quote.html
Unsure about how the costs of Trade Credit Insurance is calculated? Read our article where we answer that exact question: https://www.allianz-trade.com/en_AE/news-insights/business_insights/trade-credit-insurance-cost.html
Euler Hermes does not issue direct policies in the Middle East. It operates in partnership with and provides reinsurance support to a number of selected locally licensed insurance companies, which issue Trade Credit Insurance Policies designed and approved by Euler Hermes in its capacity as a Reinsurer. Allianz Trade is the trademark used to designate a range of services provided by Euler Hermes.
