Interview with Ana Bravo de Laguna, Sales Manager of Solunion Spain
Credit insurance is one of the most important tools in international business, and its function is not only to ensure a sale in the event of non-payment, but also to guide the growth of companies abroad. Ana Bravo de Laguna, Sales Manager at Solunion Spain, tells us.
Non-payment on commercial sales on credit, in the export field, is one of the greatest risks that a company can face when it internationalizes. Do you agree with this statement?
Ana Bravo: "The truth is that if. One of the main risks that companies face once they undertake their internationalization is the risk of non-payment of these commercial operations on credit, which is why one of the most important levers to ensure collection is credit insurance.
Do you think that Spanish companies take this into account in their operations abroad? And more so in the current context?
AB: “I believe that more and more Spanish companies cover their needs both nationally and internationally. The culture of the Spanish company is becoming more and more professional and acquiring internal development models with coverage for all its needs. What's happening? That at a national level, knowledge of the markets and proximity make you have certain security when entering into business relationships with a new client. But when we go abroad, when someone from China suddenly contacts us to be interested in our product, then the ability that companies in Spain have to access information regarding the credit rating of that client begins to dilute. With which I think so, lSpanish companies are increasingly betting on covering these sales abroad and have first-hand information on the evolution of the credit quality of its client portfolio outside of Spain.”
Have you calculated the economic impact that accounts receivable can have on a company?
AB: “It depends a little on the size of each company, but it is true that si your main client does not pay you, it can take you ahead. It can get to the point that not only does it put you in a bind, in some cases if this client comes from one of your main clients, who has a turnover of around 30, 40% in your income statement, it can take you ahead. And many times that happens: when a company is taken over, a client's non-payment is the most important client and the most trusted client because it is the one that does not insure.
Broadly speaking, what does export credit insurance cover?
AB: “Credit insurance is a lever that companies use to ensure the collection of those outstanding accounts of their client portfolio. It is always understood colloquially, if one of my clients does not pay me, the credit insurance comes in and covers that bill, but it really has three functions: it helps you as a company, especially when we want to go abroad, to grow, because what it does is prospect. in those markets in which you want to position yourself and gives you a credit reference of those clients. Tand helps very well to focus your growth. It effectively covers those commercial relationships on credit, both nationally but especially internationally, which is where the information is diluted; Furthermore, in the event that there is a non-payment what it does is a recovery action, establishes a relationship with that debtor to see the situation they are in and see the possibility of recovering that debt; and in case there is an insolvency already certain, the compensation, cover that bill through compensation.”
When preparing this interview, we started with one sentence: “Tell me what company you have and what country you do business in and I will tell you what credit insurance you need.” To what extent do you offer tailored credit insurance at Solunion? Can you give us an example of how the type of company in question or the country it is heading to influences when choosing credit insurance?
AB: “In the national credit insurance sector, there aren't too many players operating, and we all compete on a level playing field because, in Spain, we all use the same tools to access information about the creditworthiness or financial situation of the companies that will be our policyholders' debtors: account records, public records of payment defaults, etc.”
Where can we really make a difference? Outside, in provide value to our policyholders in the credit quality of their debtors outside Spain. Solunion is a joint venture between Euler Hermes and Mapfre; This union of two powers that are so strong internationally and as far as insurance is concerned means that we have physical presence in more than 50 countries and we have more than 1.500 analysts working on risk monitoring.
Because it is important? Imagine that I am a Spanish company that sells oil and a client in China contacts me. I don't know how to evaluate the accounts of that client in China. I don't know if he is going to pay me well, poorly or fairly. From Spain, no matter how much I go through the Internet, they are not going to give me true information. What is the good? Have information locally, from our delegation in China, give us information about the solvency of that company. Not only when it comes to establishing that business relationship, even if there is a default from this client in China, it is not the same to send a letter from Spain in English to this debtor in China than in the end the letter is received in Chinese from, to the best, three blocks above where this company is located. The pressure to recover the debt is not the same when it is exerted from close proximity.”
At Solunion you offer up to seven different credit insurance policies. Why is there so much variety?
AB: “Although it is really a single product, What we do is work a lot on specialization and the client's needs.There is a wide variety of companies, depending on their revenue, their profile… what we do is adapt our products very well to the needs of the clients.
For example we have a highly parameterized product in small companies, between one and five million, whose needs are not the same as those of a medium or large company. We also have companies that have developed their client portfolio with credit insurance but carry out a specific commercial operation that they want to carry out within a global insurance, we also do the single risk, the insurance of a single risk. We have clients who have a very good client portfolio and who do not want to insure 100% of their sales, leaving only a part within the credit insurance. Or we have clients who are willing to accept an expected loss, and we make franchises.
What we do at Solunion, within the variety we have, is adapt it to the needs of companies, because differentiation by sectors plays a very important role.”
A question that SMEs or new companies may ask themselves: is it expensive to take out credit insurance?
AB: “The words ‘expensive’ and ‘cheap’ are somewhat relative. When it comes to insurance, we all find it hard to pay for it. The problem is when you need it, when you have an incident… in the end, if you measure this credit insurance as a cost and not as an investment, you’ll think it’s expensive. But If you really use it as an investment, as a lever that helps your company grow, because credit insurance will give you that orientation as to which clients you should target to grow, if in the end you understand that at a given moment you can sleep peacefully because a bad financial situation of one of your clients is not going to harm you, It is certainly an investment, and it is cheap.”
Finally, if any company viewing us wants to find out more about your credit insurance offer, how should they do it?
AB: “The first thing I recommend is that you visit our website, www.solunion.es, and they have all the services and products and a contact telephone number and an e-mail where they will assist you quickly, they will pass this contact on to the Sales department and we will contact them to find out what their needs are and to be able to make you an insurance offer. of credit".
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