Willis Towers Watson has launched a new risk and analytics model for the trade credit market.
The model is said to analyse clients’ trade receivables to predict potential losses over a range of statistical scenarios.
A typical model run covers:
- Rating and spread of risk on an aggregate portfolio, region, trade sector and individual buyer basis
- Probability of Default Loss Forecasts on a portfolio basis
- Breakdown of risk exposures by sector and geography
- Fully customisable credit insurance Return on Investment (ROI) calculations examining the cost of Premiums against sales and projected losses
The model takes a data driven approach, identifying the unique frequency and severity of potential credit risk losses within a firm’s receivables portfolio. It reportedly helps clients design and structure the most appropriate solutions to help grow sales.
Willis Towers Watson said the model has been designed as a tool for both newcomers to Trade Credit Insurance as well as seasoned users.
Scott Ettien, executive director Willis Towers Watson, said “Willis Towers Watson has a long track record of success in using our R&A platforms to drive additional lines of business by bringing a data-backed analysis to our client’s attention.
“Our model helps organisations to understand further how Trade Credit insurance can be viewed as a viable risk transfer vehicle for capital substitution.”