Survey shows 64% of CFOs worry about rising risk of customer bankruptcies
Allianz Trade released a new report in North America, based on a survey of 150 financial executives, revealing the current state of credit management among B2B companies in an uncertain economic environment. The report shows that 60% of CFOs expect a recession in the next 6-12 months, 64% are worried about customer bankruptcies, but the usage rate of trade credit insurance is only 37%.
Baltimore — Allianz Trade, a leader in trade credit insurance in North America, released a new report on October 5, 2023, exploring the state of credit management for B2B companies during uncertain economic times. The report is based on a CFO Dive survey of 150 financial executives and analyzes how companies are strengthening credit protection and reducing risk.
Key Findings: Recession Expectations Coexist with Concerns About Customer Insolvency
Allianz Trade's research shows that three in five CFOs (60%) expect a recession or economic downturn in the next 6-12 months; an even higher proportion (64%) of CFOs are concerned about customer bankruptcy or insolvency during the same period. The consequences of customer insolvency can be severe—more than three-quarters of CFOs (77%) believe that if multiple customers go bankrupt at the same time, it would affect their company's own solvency.
The Tension Between Growth Expansion and Risk Management
Despite high risks, the research shows that companies are still steadily expanding their customer base. Four in five CFOs (79%) say their company adds at least three new customers per month; more than half (57%) are boosting sales by entering new country markets where they have not previously done business.
However, the report points out that adding new customers and entering new markets increases the difficulty of identifying counterparties. Sound credit management practices—including trade credit insurance—can help companies balance growth aspirations with the need for risk mitigation.
Trade Credit Insurance Utilization Remains Low
The research shows that trade credit insurance is an underutilized resource. For example, only 37% of CFOs have used trade credit insurance to protect accounts receivable. Trade credit insurance can complement and enhance a company's existing credit practices, helping them make more informed decisions when extending credit.
"Trade credit insurance fills the gap for non-payment, while also providing businesses with the information and resources needed to avoid non-payment situations," said Ellen Gebarowski, Regional Vice President for the Northwest region of Allianz Trade North America. "We are pleased to release this report to help CFOs understand how to strengthen credit management and use trade credit insurance to protect their businesses from unforeseen events."
Report Details and Expert Insights
The full report, "Exploring the State of Credit Management in Uncertain Times," includes insights from Allianz Trade experts, including analysis from Dan North, Senior Economist for North America. To access the full report, clickhere。
Survey Methodology
The research findings are based on an online survey conducted by CFO Dive of 150 financial executives from B2B companies.
About Allianz Trade North America
Allianz Trade North America is a global leader in trade credit insurance and a recognized expert in bonding, collections, structured trade credit, and political risk. Its proprietary intelligence network analyzes changes in the solvency of companies representing 92% of global GDP every day. The company helps businesses build trading confidence and secure payments. It provides compensation when bad debts occur, but more importantly, helps clients avoid bad debts from the start. Whether providing trade credit insurance or other financial solutions, its priority is predictive protection. When the unexpected happens, its AA credit rating means it has the resources, backed by Allianz, to provide compensation that keeps clients' businesses running.
