Bank Insurance

The commercial activity implies certain risks, based on its very definition. Every year, tens of thousands of companies worldwide go bankrupt, registering great debts that are due to partners. In most of the cases, the reason for this fact is the insolvency of the buyers, thus making it impossible to recover promissory notes.

Nowadays, more than ever, by means of the global market, insecurity is gaining new forms and valences. Within a dynamic business framework, success is most of the times conditioned by the solvency of the clients, especially during recession periods, the very survival within the economic environment being determined by this cause.

Types of financial risks

According to their nature, financial risks can be classified as follows:

- Commercial risks;

- Natural calamity or force majeure risks;

- Political risks;

- Currency risks.

Commercial risks consist in the deterioration of the financial situation of the private buyer, who is not able to reimburse the outstanding amounts at the payment due date, pursuant to the agreements. The buyer’s inability to meet his liability towards the supplier can be caused by long term action factors or by reversible and accidental reasons.

This category of risks includes not only the failure to meet the payment terms as a result of the buyer’s insolvency, but also the latter’s lack of creditworthiness (breach of agreement).

Payment default risk insurance

The payment default risk insurance represents a relatively new form of insurance, which appeared as a result of the precise delimitation between the financial and the insurance companies. This is a new concept, by means of which the person insured eliminates the risk of registering financial losses in the activity performed, by transferring them to an insurer.

Commercial credit is a facility granted by the insured to his customers – legal entities (financing) and consists in a postponed payment of the price for the products delivered or for the services provided.

The financial risk insurance is different from the bank warranty. The financial insurance only covers the risks falling under certain conditions, while bank warranties imply the unconditional assumption of all liabilities.

Credit insurance protects all traders and producers against the payment default risk concerning the outstanding amounts to be paid by the buyers who purchase or rent goods (leasing) or are the beneficiaries of similar credit facilities. This type of insurance emerged as a necessity, taking into account the fact that most commercial agreements are concluded provided that the relevant payment is made partially or totally, after delivering the product stipulated within the respective agreement, thus implying the fact that the payment is postponed (sale based on credit).

Consequently, credit insurance aims to eliminate the seller’s payment default risk concerning the due amounts to be paid by the buyer, thus offering the seller protection against this risk.

Case study: the payment default risk insurance agreement concerning the commercial credits granted by S.C. OMV MINERALOEL S.A. by means of fuel cards, concluded with BCR Asigurari S.A.

BCR Asigurari S.A. grants a default payment insurance, taking over the legal entity clients of OMV Romania only after performing a detailed analysis regarding the latter’s creditworthiness (the analysis is to be performed by Coface Intercredit Romania, the cost thereof being covered by OMV Romania, and the analysis file will be handed over to BCR Asigurari S.A. for approval).