Trade credit insurer Euler Hermes is to launch its single invoice cover solution in Asia, after a successful trial.
The product, available as an API, has been available in Europe and the US since 2017 and 2018, respectively, and is being piloted with two of Euler Hermes’ customers in Asia Pacific to test market appetite and feasibility.
The API will allow for real-time responses, with users only paying for the times in which it is actually used, rather than for a subscription or long-term policy.
One of the companies involved in the pilots was Fundpark, a trade receivables marketplace based in Hong Kong.
“As we decided to start with a Hong Kong pilot for single invoice cover, Fundpark emerged as a natural partner given the fit of our solution to their product offering, but also their collaborative approach and their tech focus,” says Caroline Paulhan, the head of innovation for Asia Pacific at the Euler Hermes Digital Agency (EHDA).
Fundpark is one of a number of marketplaces to have emerged in Hong Kong over the past 12 to 18 months. It has been making significant inroads in the non-bank trade finance sector. This sector has not been a traditional user of credit insurance products, due to the fact that they traditionally require substantial, blanket coverage.
EHDA started looking for a pilot partner early this year and selected Fundpark in the spring. The product was adapted for the Hong Kong market, with testing through the summer months and go-live in November. No timeline for rollout has been divulged.
Single invoice cover is likely to generate more substantial interest from this sector, due to the relative flexibility and low cost. Technically, any firm with access to invoice data such as the buyer and seller, the invoice amount and maturity, can launch an API implementation of the single risk cover, once Euler Hermes has completed know your customer checks.
Banks and factors, however, are the most likely users of the product, given their familiarity with this market. “Marketplaces may be less familiar with the product, but offering credit insurance – just like they are increasingly offering financing – is a natural evolution for them to offer more convenience and value-added services to their sellers,” Paulhan says.
The product will first be rolled out in Hong Kong and Singapore, with Euler Hermes claiming it’s the first offering of its kind in the Asia Pacific market. The product is “exactly the same” as the one currently available in Europe, which is being used by Crédit Agricole to power its ‘cash in time’ digital factoring solution, and by Metalshub, a B2B metals trading marketplace.
Euler Hermes is also looking to expand this type of solution to SMEs. In March EHDA launched its first stand-alone brand in Europe, Credable, which offers on-demand insurance for single invoices, covering exporting SMEs against late or unpaid invoices. The insurtech brand has already expanded the geographical coverage of its offering to cater for a large demand.