WTW and Citi have successfully placed an innovative insurance facility with the FCIA Trade Credit & Political Risk division of Great American Insurance Company, providing a portfolio-based, long-term accounts receivable financing solution by combining the benefits of two existing insurance products.
In a joint statement, the trio suggested that although portfolio-based, long-term assured A/R financing has been employed by financiers for years, the combination brings two remarkable new benefits.
First, it allows sellers of long-term receivables to access capital on these discounted receivables, rather than waiting for the full term to be paid in full.
Second, a portfolio of strong and weak credit risk obligors allows for an “all-in” blended rate that can be an attractive and achievable premium rate for many policyholders.
Scott Pales, Senior Vice President – Political and Credit Risk, Financial Solutions, WTW, said, “We are delighted to bring this new facility to the benefit of our clients who see the business environment facing a myriad of challenges.
“We thank Citi and FCIA for their assistance in developing this new insurance-backed facility that underscores WTW’s leadership in commercial credit. We believe that this project will open many additional opportunities.
Andre Python, Divisional Senior Vice President, Chief Underwriting Officer of FCIA, added, “FCIA is pleased to be part of the solution again and to offer its decades of knowledge and expertise in underwriting and drafting innovative policies in another successful insurance program.
“We look forward to working with Citibank, WTW and others to support business transactions in a world where uncertainties are certain and where credit insurance plays a vital role in providing businesses and banks with peace of mind. .”
Adoniro Cestari, Global Head of TTS Trade Products & Structuring at Citi, said, “With growing demand for insurance-backed receivables financing solutions globally, coupled with strong support from insurers, we expect to bring more of innovation in the journey of excellence and an improved customer experience.
“It also opens up opportunities for replication with other insurers in the near future for broader customer coverages.”
