Willis Towers Watson has launched a new risk and analysis model for commercial credit. The model analyzes customers’ trade receivables to forecast potential losses over a range of statistical scenarios.
The model provides a risk assessment and allocation across an overall portfolio, region, business sector and individual buyer; portfolio-based default probability of loss forecasts; and a breakdown of risk exposures by sector and by geographic region. Fully customizable credit insurance ROI calculations look at the cost of premiums versus sales and projected losses.
By identifying the frequency and severity of potential credit risk losses within a company’s receivables portfolio, the model takes a data-driven approach to help clients design and structure solutions to increase sales by full confidence.
It is designed for both newcomers to the credit insurance business as well as seasoned users and is intended for a range of purposes: private business-to-business forms trading on open account terms, financial institutions evaluating receivables linked to a borrowing base; debt repurchase or securitization program; and merger and acquisition activity to assess the risk within the debt asset of a target company.
Scott Ettien, Executive Director of Willis Towers Watson, said: “WTW has a long track record of success in using our R&A platforms to drive additional business lines by bringing data-driven analysis to the attention of our customers. Our model helps organizations better understand how trade credit insurance can be viewed as a viable risk transfer vehicle for capital substitution.
risk, credit, trade, insurance, reinsurance, losses, forecast, investment, premiums, solutions, Willis Towers Watson, WTW, North America