Food & Drink industry, minimising risk on exportsBy Richard Welbourne
Avenue Insurance Partners have a deep understanding of how the Food & Drink industry works. With knowing all their nuances and intricacies enables us to advise our clients on the most suitable options for protecting their business.
One area that some Food & Drink clients aren’t always aware we can cover is their exporting business.
On the way to a recent meeting, I was made aware that one of our clients was selling approximately 7 or 8 tonnes annually prior to taking out the policy. After listening to the Directors of the Food & Drink company we were able to find a solution to help them grow their export sales whilst trying to minimise the stress and worry of not being able to collect money.
Speaking with the client recently at the meeting, they reiterated the original reasons as to why they took up the policy. The Finance Director commented “even though the profit margins were greater, we didn’t want to risk growing our export sales as we were concerned about collecting our money if anything ever went wrong.”
What they didn’t realise, like a lot of other businesses, is how useful credit insurance can be when expanding into the export markets. Some of the features I often mention include:
- The support of localised collections
- The information the insurers can provide on their customers and;
- Certainty of payment
To help them grow their sales, their insurer has either a physical office in the countries they are trading in or an agent working on the insurer’s behalf. What this meant to them is that they had someone on the ground gaining access to current information on who they are dealing with. The other advantage of having the offices in all the locations, is the localised collection department. Whilst the client hasn’t needed to use it, it does mean that if a customer ever declines to pay, the insurer can take immediate action to collect the monies.
The final and ultimate benefit of all credit insurance policies is the certainty of payment. When the worst-case scenario happens and you find that your customer has gone into administration, you can rest a bit easier knowing the insurer is there to pay out a claim. 7 times out of 10, claims are paid within 30 days from when the company goes into administration with the quickest paid within 24 hours. This certainty of payment means that you don’t have to let down your staff or suppliers and are able to continue trading.
Whilst in the meeting, our client was wondering whether or not to renew his policy as he hadn’t made a claim. When we pointed out that he took out the policy to grow his export sales, it took the conversation in a different direction. What was staggering to hear was the impressive increase on sales. Our client was able to grow their sales by over 20 times from 7 tonnes to in excess of 150 Tonnes. Here’s to the next renewal meeting and to find out how much more growth has incurred in the following year.
If you are thinking about expanding your export sales then please feel free to get in touch with me on 07591 954749 or email me at Richard.firstname.lastname@example.org