Trade Credit Insurance – Case Study
PrestGroup approached Client 123 with a proposal for Trade Credit Insurance. After long and hard consideration Client 123 reverted back to us by saying that they have such good relationships with their almost all blue chip clients that chances for default in payment were very slim and almost impossible. So for them to incur an additional cost of R480 000 per annum would not make sense. However their turnovers would soar to between R13 and R20 million per year. We respected their decision and continued with business as normal. Three months down the line we were contacted by the very same client as they had many clients that were in some way or the other related to Steinhoff. They needed credit insurance asap. Unfortunately it was too late as Steinhoff had already gone into Business Rescue at the time. Needless to say Client 123 was in serious trouble which they could have avoided if they had taken out credit insurance at the correct time.