Euler Hermès Launches a Credit Insurance Service for Marketplaces

Credit insurance services are being adjusted to the digital era by several players, including Euler Hermès. This subsidiary of the Allianz group focuses on insurance services applied to BtoB commercial exchanges. Their market approach stresses opportunities triggered by alternative distribution models.

Euler Hermès expands their range of offers through aiming for a new target: marketplaces (Amazon, Cdiscount or even Vente-privée, and the like). They rely on a product intended to meet marketplaces’ needs, upstream, since their activity does not bear the same level of risk as traditional companies do. Euler Hermès observed that, as intermediaries, these marketplaces do not deal with default of payment risks. They have no debt obligation.

Euler Hermès introduces a specific guarantee, in turn to be proposed by marketplaces to their customers, by way of dealing with this risk of unpaid debt. Their part as an intermediary can then be enhanced with a value-added offer.

This offer relies on their “Single Invoice Cover” API, to assess insurance coverage for a one-time transaction between a provider and his customer, in real time. The insurance cost is then qualified in real time, and for one transaction only. This new offer has been rolled out for, and co-created with, the marketplace Metalshub.

Comments – Avant-garde and opportunistic approach at once

Euler Hermès has been taking a stab at the BtoB e-commerce market in the past. In 2016, they presented a service intended to cover commercial transactions for FinTechs. Their reaching out for marketplaces makes it possible for them to gain new skills, and highlight their ambitions on a promising sector, i.e.: new distribution methods.

This approach also stresses commercial opportunities the industry owes to marketplaces, in particular highly specialised players, such as Euler Hermès. Some of their prior developments have already had an impact at several levels: on taking payments on behalf of third parties, for instance. The growth of the marketplace sector has consequences on the credit and credit-insurance markets, since insurance services for third parties are then relevant. Euler Hermès pioneers as they scale their insurance service to cover each transaction individually. This trend should keep going, as more alternative distribution models are seeing the day, and focusing on niche segments likely to be addressed by various financial and insurance offers.