And we also share our perspectives on what organizations can do to address this to manage the customer credit risk more efficiently. I'm delighted to be joined by Jason Dworin and Reilly Jordan today. And I'd like to start by asking you to introduce yourself to the audience and describe your background in this topic. And Jason, it would be amazing if you could go first.
JASON DWORIN: Yeah, sure. So my background is, I have about 25 years in trade credit risk, in particular with business credit reporting and risk monitoring as well as credit insurance, and I head up the ProfitGuard business information unit at WTW. And that's the quick version.
BURKHARD WITTGEN: Great, thanks, Jason. And Reilly, what about you?
REILLY JORDAN: Hey, Burkhard. Thanks for having me. So I'm Reilly Jordan, I'm a member of our Trade Credit team on our Credit Risk Solution department here at Willis in the United States. My background formerly, I was an underwriter with Allianz Trade for a little less than nine years in various roles. My most recent role was under the XL department, so bringing underwriter perspective, as long as in addition to the brokering service as well.
BURKHARD WITTGEN: OK, and I think this is a good start. And let's go into our discussion. And Jason, maybe we can start with you first. And why do you think-- why is it accurate-- or why is accurate credit information so crucial for multinational companies to manage their credit risk efficiently?
JASON DWORIN: Well, in today's fast moving business climate, I mean, credit can be very fluid. Things are changing quickly. So credit professionals really need to be one step ahead, very proactive in managing credit risk.
BURKHARD WITTGEN: And Reilly, do you have anything to add here?
REILLY JORDAN: Yeah, absolutely. Accurate credit information is critical because it shapes every credit decision a multinational makes. When you think about these organizations, they're not just selling locally. They're managing relationships in dozens of markets, often in regions where financial disclosure isn't mandatory.
So this creates a huge gap in what they can see. And transparency. If you're working with outdated or incomplete data, you're exposed to surprises. Customers that look healthy on paper, but they're actually struggling, and those surprises usually come at the worst possible time, when you're trying to expand your credit limits or entering a new market.
And one other item to focus on is scale. For large organizations, a single buyer default might not break the business, but if you have inaccurate information across hundreds or thousands of buyers in your portfolio, that risk adds up. You have to remember that credit risk isn't in a vacuum. It's impacted by macroeconomic conditions like currency swings or political changes, which has been increasing recently in the news. If your credit data doesn't capture those factors quickly enough, you can't just adjust your exposure in real time.
BURKHARD WITTGEN: Thanks, both. Yeah, Jason, maybe you can go back to you? And if you can share your experience, what are some of the most common challenges you have seen in multinational companies when it comes to managing their customer credit risk?
JASON DWORIN: Yeah, sure. When I speak with customers and some prospects it seems two areas always pop up, and it's usually assessing credit risk for a privately held customer and just not having enough resources to effectively manage a company's portfolio credit risk. And the big thing here is that often puts their balance sheet at risk, among other things, in the business.
BURKHARD WITTGEN: Yeah, Reilly, and I mean, you're also having years of experience working with global firms. What do you see as their main challenges?
REILLY JORDAN: Well, besides trying to avoid losses, it's also missing out on opportunities that enable growth. Ultimately, like every company, multinationals wants to say yes to more business opportunities, but without the confidence that they know that they're trading safely and soundly, they're taking unnecessary risks and missing out on opportunities, or they're missing out on opportunities for being overly cautious.
BURKHARD WITTGEN: Yeah, I mean, we have seen multinationals, which have not really a big focus on credit risk, or they don't see the credit risk at all because of a lack and claims history. From your experience, Jason, if multinational companies don't tackle these issues, what could the potential impact be for their organization?
JASON DWORIN: From my perspective, if you don't have quality credit information when you onboard a new customer or perform periodic credit reviews of your old familiar customers, you're really, again, putting the business at risk for credit losses. A customer can go from good risk to bad risk overnight. And if you don't have properly structured credit insurance program in place, a good credit policy, again, the business can be left with credit losses, and they can come at a total surprise.
BURKHARD WITTGEN: Thanks, Jason, and Reilly?
REILLY JORDAN: Yeah, I agree with Jason. I mean, ultimately, data is king, and avoiding losses is critical. So just having up to date information, taking risks that you're comfortable with. But at least, you're informed about it, while maybe saying yes to opportunities. Those are the biggest things to focus in on this subject.
BURKHARD WITTGEN: This leads me already to the next question. If you speak to and see if or to financial director in a corporate, what practical steps would you recommend them to address this? And what kind of steps can improve their credit management?
JASON DWORIN: Adding a specialty credit information service, I think, is a good thing. A service like we offer, ProfitGuard, to your toolkit would be beneficial. There's others out there that depending on your industry, but some of the generalist or commodity-type credit information companies, they're beneficial in their own ways. But the big thing there is that they typically lack the human element that can really make a difference.
And another step to consider is having a truly integrated credit management program. And what I mean by that is that have an information and a insurance component. With good information, you can manage expected risk. And with an insurance program you can manage the unexpected risk. And with that of 360-degree type program, you're really setting your business up to minimize losses and grow sales.
BURKHARD WITTGEN: Yeah, I think, Jason, this was already a comprehensive response. But Reilly, what kind of priority have you seen taking into account by multinationals which have the biggest impact?
REILLY JORDAN: Yeah, I mean, one is kind of simple, but it's consistency. So you're obviously operating in multiple countries, and every region might have its own process for credit checks or limit setting. So this can ultimately lead to a fragmented risk management, or one business might be too conservative, or one might take on too much exposure. So it's really important to have a centralized framework that everyone is following consistent practices, because it's hard to see the full picture of a global credit risk.
And also, just as I'm touching upon that as well, is just internal communication can be a hurdle. Sales teams are focused on growth. Credit teams are absolutely focused on risk, and without strong alignment, you can end up with tension between the two that are either overly restricts credit terms or leads to missed opportunities as well. So there's one more point maybe to add to is just speed.
Speed is another challenge. In today's environment, conditions such as currency devaluations or sanctions can change quickly. So many multinationals are struggling to update their credit procedures in real time because their systems and data sources aren't integrated or fast enough.
BURKHARD WITTGEN: Yeah, and I mean, if I listen to a podcast, I always look for key takeaways. So if you look into this, what key takeaway would you give to a listener to get started with utilizing information about credit risk, and yeah, let's say, grow at the same time?
REILLY JORDAN: Yeah, I would say--
[INTERPOSING VOICES]
BURKHARD WITTGEN: Or, maybe Reilly at this time. Reilly.
REILLY JORDAN: Yeah, that's fine. I'll go first this time, Burkhard. No, just making-- like I said, just making sure everyone-- you have a procedure in place and everyone's consistent with how they use that information. So if you take a credit report, making sure it's comprehensive and detailed enough for you to make informed decisions about it and just making sure that everyone has a standard about what they need for information and that that's consistent across every region.
BURKHARD WITTGEN: Great, and Jason, do you have a closing comment and key takeaway as your top advice to clients?
JASON DWORIN: Yeah, my take would be that you have to remember that not all credit information is the same. It's really important to the differences in the offerings, looking at using or what you do use the strengths of the various offerings. Those things can make a big impact in helping you minimize credit risk, again, while you're taking advantage of sales opportunities.
BURKHARD WITTGEN: Perfect, I mean, we have many listeners who come from the credit insurance industry or who manage credit insurance and credit risk at the same time. So final question to Reilly, so how would you recommend clients to use information and maximize their coverage in existing credit insurance policies?
REILLY JORDAN: Well, when it comes to maximizing coverage, we try to trade credit insurance, the smart use of information is critical, as we mentioned before. I mean, insurance isn't just a safety net that you put in place and forget about. I mean, trade credit insurance, in particular, is an active risk management tool that works best when it's paired with a high quality and up-to-date credit data.
So I would recommend first, as we touched upon a few times, the more accurate and detailed information you provide your insurer about your customers, the better you can tailor the coverage and price to reflect the actual risk. So meaning, if you're overexposed or you have too many credit limits, you'll see that reflected in your rate, and you'll actually be paying more in premium than you would for the actual risk covered on the policy.
Second, I mean, it's important to use real-time credit information that allows you to proactively manage your insured exposure. So, for example, if data shows a customer's creditworthiness is deteriorating, you can reduce the exposure or request a pre-approval from the insurer before extending more credit. This keeps your coverage intact and avoids surprises during the claim filing process, which can be a little scary at times due to the uncertainty.
Third, I mean, it's integrating your credit information system with your trade credit program properly and making sure there's a seamless process for monitoring and reporting. That ensures you remain compliant with the policy terms. And most importantly, you can react quickly to any red flags. I guess, overall, viewing trade credit insurance as part of a broader, integrated part of your credit management is key to the strategy. It's not just a reactive tool, it's one that helps companies a lot grow if used properly.
BURKHARD WITTGEN: Yeah, I fully agree. And what I see personally is that now, of course, credit insurance, especially for difficult credit risks, they try to minimize exposure. And clients who are well informed about their credit risk on their own have a way better negotiation position to get the maximum coverage available. And of course, it's also our role to be there. Yeah, Jason, Reilly, thank you so much for joining me. It was great to hear your perspective. And to all our listeners, thanks for joining us, and we will see us again in the next episode of Trade Safe. Thank you.
REILLY JORDAN: Thank you.
SPEAKER: Thank you for joining us for this WTW podcast, featuring the latest perspectives on the intersection of people, capital, and risk. For more information, visit the Insight section of wtwco.com. This podcast offers a general overview of its subject matter, and we recommend you seek further advice from relevant professionals before taking any action. The statements and opinions made by our speakers are those of these individuals and do not necessarily represent the views of Willis Towers Watson.
Willis Towers Watson offers insurance-related services through its appropriately licensed and authorized companies in each country in which Willis Towers Watson operates. For further authorization and regulatory details about our Willis Towers Watson legal entities operating in your country, please refer to our Willis Towers Watson website, www.wtwco.com. It is a regulatory requirement for us to consider our local licensing requirements.
The information given in this podcast is believed to be accurate at the date of the podcast's release. This information may have subsequently changed or have been superseded and should not be relied upon to be accurate or suitable after this date. This podcast offers a general overview of its subject matter. It does not necessarily address every aspect of its subject or every product available in the market, and we disclaimer all liability to the fullest extent permitted by law.
It is not intended to be and should not be used to replace specific advice relating to individual situations, and we do not offer-- and this should not be seen as-- legal, accounting, or tax advice. If you intend to take any action or make any decision on the basis of the content of this podcast, you should first seek specific advice from an appropriate professional.
Some of the information in this podcast may be compiled from third-party sources we consider to be reliable. However, we do not guarantee and are not responsible for the accuracy of such. The views expressed are not necessarily those of Willis Towers Watson. Copyright, Willis Towers Watson. All rights reserved.
