HAMBURG, August 10, 2022 – Online B2B commerce is booming. However, there are also some challenges as companies deal with new customers and suppliers on a daily basis. The supplier does not want to deliver anything until payment is made and customers are less and less willing to pay in advance according to the study “B2B e-commerce 2020 – status quo, experiences and outlook” by ibi research of the University of Regensburg and the study “Payment and financial processes in B2B e-commerce” (January 2021). Suppliers therefore need coverage in the event that the agreed payment is not made. Traditional trade credit insurance reaches its limits at that point and additional solutions are necessary – especially for the e-commerce business – to enable online clients the purchase on account with payment terms ranging from 30 to 90 days (“Buy Now, Pay Later”).
For this reason the global service provider Aon, through its subsidiary One Underwriting, Great Lakes Insurance, a subsidiary of Munich Re, and the Hamburg-based FinTech WALBING have jointly developed a new single-invoice-based trade credit insurance solution based on individual invoices, which is specifically aimed at the B2B eCommerce business.
This is how the solution works for customers
B2B platforms easily integrate insurance coverage as a so-called embedded insurance solution. In future, all you need to do is register on WALBING’s B2B platform and then use the APIs of WALBING’s own Sanya platform.
Why do B2B platforms need trade credit insurance?
Trade credit insurance compensates for defaults when customers fail to pay their invoices. In B2B business, invoices are often issued for orders with a high amount. These orders can only be accepted by the seller if the customer is willing to pay in advance or has a credit line with an insurer. In online business, however, insurance coverage must be available in real time – when the customer decides to buy. This real-time insurance protection is exactly what the innovative solution from Aon / One Underwriting, Great Lakes Insurance / Munich Re, and WALBING makes possible.
The insurance policies guarantee the financing of the supplier credit when the supplier makes an advance payment. This type of insurance also works if the financing is provided by a third party. This means that insurance coverage can also be transferred to investors if a supplier decides to sell the receivable from the supplier’s invoice at a later date as part of receivables financing via WALBING.
Protection Available to Investors in Previously Uninsured Receivables
Investors, such as banks, factoring companies, or alternative investment funds, who invest in B2B receivables through WALBING’s Sanya platform, have the option of initially selecting receivables that have not been financed and subsequently purchasing them together with insurance protection. B2B receivables have become an asset class in their own right in recent years due to their characteristics such as attractive yields, low default rates, short capital commitment periods, self-liquidation, uncorrelatedness with other asset classes and direct and sustainable support of the real economy and they are gaining prominence among institutional funds.
Dr. Kai Engelsberg, Member of the Executive Board of Aon Credit Solutions says: “Companies today want to grow online. Our mission is, therefore, to offer insurance protection where it is needed in our clients’ core business. We have succeeded in this with the Embedded Trade Credit Insurance solution developed jointly with our partners. At a time when new forms of volatility are emerging through digital transformation, companies can now securely transact and scale online without disrupting their ‘user journeys’.”
Andreas Moser, Head of Embedded Trade Finance Solutions at Munich Re adds: “With our TALARIA solution, we are opening a new ‘digital’ chapter in receivables insurance. Thanks to the newly developed scoring engine, which is based on Munich Re’s expertise in credit insurance but also in data analytics and machine learning, we can make single receivable loss coverage a reality in ‘real time’.”
Jörg Hörster, CEO of WALBING Technologies mentions: “Real-time embedded credit insurance is the mosaic piece that has been missing in both the digital B2B market and the receivables purchasing market. We are very excited that our Sanya platform with Embedded Trade Credit Insurance offers both markets the potential to scale.”
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.
This media information contains forward-looking statements based on current assumptions and forecasts. Known and unknown risks, uncertainties and other factors could cause Aon’s actual results, performance, financial condition and business to differ materially from the forward-looking statements contained herein. Aon assumes no obligation to update these forward-looking statements or to conform them to future events or developments.
WALBING makes B2B business better. The company was founded in 2019 to simplify and accelerate international business. At WALBING, we believe that financing, payments and insurance shall be covered, where they are needed, when they are needed. The way we design our solutions is to make financial services simple to use, enjoyable and effective. With our Sanya-platform we provide an API-suite that operates Invoice-to-Cash and Buy Now, Pay Later services, Trade Credit Insurance services and soon also Track & Pay, a service to replace paper-based letters of credit. These services include running two data-driven marketplaces, one for institutional investors in trade receivables and one for insurance companies, investing in insurance risk capital. Leading B2B brands, including several European unicorns, trust WALBING to fund and soon also insure their entire user bases.
This press release includes forward-looking statements, that are based on management’s present expectations and subject to known and unknown risks and uncertainties. Actual results or events may differ significantly from those expressed or implied.
About Munich Re
Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The group consists of the reinsurance and ERGO business segments, as well as the asset management company MEAG. Munich Re is globally active and operates in all lines of the insurance business. Since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its sound financial position. It offers customers financial protection when faced with exceptional levels of damage – from the 1906 San Francisco earthquake through to the 2019 Pacific typhoon season. Munich Re possesses outstanding innovative strength, which enables it to also provide coverage for extraordinary risks such as rocket launches, renewable energies or cyberattacks. The company is playing a key role in driving forward the digital transformation of the insurance industry, and in doing so has further expanded its ability to assess risks and the range of services that it offers. Its tailor-made solutions and close proximity to its customers make Munich Re one of the world’s most sought-after risk partners for businesses, institutions, and private individuals.
Disclaimer Munich Re
This media release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to make them conform to future events or developments.