Excess of Loss Policy – XL Policy
Excess of Loss insurance is an innovative default risk protection that does not interfere with the insured’s credit management. The insured continues to assume the risk of sustainable, structural defaults but cedes unforeseeable and exceptional risks that threaten its financial security and continuity.
The advantage for the policyholder of this modern risk protection based on the principles of reinsurance, which was previously only available to insurers, is that the insured does not have a credit limit set by the insurer and does not have to accept any interference in his customer relationships when collecting receivables. Thus, he can react to rapidly changing circumstances with regard to the risk.
Your advantages with our XL policy
GfK works with your company to develop a tailor-made concept for your company:
- Coverage against unforeseeable losses (catastrophe coverage)
- Combination of the policy with a rating system
- Design of the contract as a reinsurance model
- Compensation optionally as insurance or financing benefit
- Addition of political coverage
Please do not hesitate to contact us if you have any questions or require more detailed information.
Coverage your outstanding debts with an XL policy offers you:
- Protection against unforeseeable high bad debt losses
- Independence and autonomy in the design of your internal outstanding accounts management
- Combination of the basic model with different design elements (e.g., a rating system)
- Extension of bank lines by securing your receivables or financing the project business by assigning the indemnity to your bank.
- Limit enquiries are no longer necessary, thus eliminating the problem of insufficient limit underwriting.
Further information on the Excess of Loss Policy
The XL policy is designed to protect your company against severe, unforeseeable losses. The target group is companies that want to bear foreseeable and average bad debt losses in the past.
|„Excess of Loss“ Policy||Classic Insurance|
|The outstanding accounts management is analysed and described in advance. It must meet the minimum standards of the policyholder.||The insurer supports the company in outstanding accounts management through credit limits.|
|The company issues and administers internal credit limits as part of its outstanding accounts management and without the insurer’s ability to intervene. These are decisive for indemnifications.||Limits (coverage commitments of the insurer) depend on the debtor’s creditworthiness.|
|Credit applications to the insurer and processing of credit notifications are omitted.||In the event of a change in the debtor’s creditworthiness, the insurer’s coverage commitments may be amended or revoked.|
|Increases in risk are handled within the framework of the own credit guidelines. No notifications to the insurer.||The company applies and maintains credit limits on the (larger) debtors.|
An exceptional accumulation of normal bad debts;
One or more severe, unforeseeable disasters
|Conditions for insurance coverage:|
The credit limit on debtors
Notification of payment disruptions, risk-increasing circumstances