Acer also has another powerful risk management ‘tool’ – the Acer Risk Category. ARC is Acer’s own risk scoring process that brings together a blend of intelligence from a variety of different sources. ARC serves to forecast, i.e. predict credit risks (potential customer defaults).
The company uses this information and the ARC ‘score’ to set the internal limits that the business is willing to provide, and to compare and contrast directly with Euler Hermes’ own grading model. “Euler Hermes respects ARC and is always prepared to listen to what we have to say as well,” Chris continues.
“If, for whatever reason, a limit is initially declined or not at a sufficient level, we can analyse it using our own risk analysis and discuss it before a final decision is taken. Again, it is about having an honest and open relationship, where the Euler Hermes World Agency team is seen very much as part of our own team, operating with a shared mission. There is constant dialogue.”
Part of this constant dialogue includes ensuring flexibility in his global trade credit insurance agreement. “Because of our hybrid model regarding risk participation, our policy is probably one of the most complex in the industry,” Chris says. “As Euler Hermes understands how our needs are constantly developing, they are very flexible in adapting parts of the agreement to accommodate these changes, and find the appropriate language that the legal teams, Acer’s Credit Dept., the insurers and the re-insurers are happy with.”
Acer’s open relationship with Euler Hermes is in many ways an example of best practice in both the IT and the trade credit insurance industries. Claims have been very low – yet another example of how the proactive part of Chris’ role is clearly delivering: “Trade credit insurance is an essential part of our risk management strategy,” Chris concludes. “But Euler Hermes does not try and dictate our future. They work with us to enjoy mutual success.”