Business

WTW launches new risk and analytics tool for trade credit

The model is said to analyse clients’ trade receivables to predict potential losses over a range of statistical scenarios

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.”

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