Credit and political risk insurance broker BPL Global is targeting the excess of loss (XoL) market with the creation of a specialised division that will have a specific focus on the trade finance sector.
The London-based team will be headed up by Jonny Carruthers, who joined BPL Global in 2015 and has over 13 years of experience as a credit insurance broker. Mike Lagrue, Jemma McGrady and James Cook make up the rest of the new team and are all internal moves.
XoL is a trade credit insurance policy designed to protect larger businesses with strong internal credit management practices against exceptional losses, over and above the risk that they are prepared to carry in-house.
According to BPL Global, recent product and technological developments, coupled with new underwriter entrants, now mean that XoL insurers can provide up to 100% cover for financial institutions purchasing pools of receivables, also enabling them to achieve regulatory capital relief under Basel III.
James Esdaile, managing director of BPL Global, says that while portfolio credit insurance has already been successfully used over many years by some of the major commodity trades, the broker is now also seeing increased demand from its banking and corporate clients.
“Having a specialist and focused team will allow us to broaden use of the product within the market, tailoring the XoL structure to bolster our individual clients’ credit risk management, while developing the programme to deliver further efficiencies to enhance portfolio growth for both new and existing clients,” he says.
Carruthers adds: “We see this as a strong alternative for banks to relying on their clients’ own insurance and a less secure loss-payee position. By having their own insurance policy, banks can obtain regulatory capital relief, eliminate operational risks and improve their advance rate.”