Hub International Limited announced the acquisition of Global Credit Risk Management Inc. (GCRM), a pan-Canadian independent accounts receivable and political risk insurance broker.
With a national presence and offices in Ontario and Alberta, GCRM provides accounts receivable insurance and advisory services to businesses of all sizes. Customers include manufacturers, commodity traders, the service industry, financial professionals, Canadian banks and other financial intermediaries.
Hub announced Thursday the acquisition of GCRM; terms of the transaction were not disclosed. GCRM directors – John Middleton, Athan Bardis and Eric Pilon – and their team will join Hub Ontario and report to the Ontario leadership team.
“GCRM joins Hub supports its specialist practices, including financial institutions, by complementing and strengthening Hub’s comprehensive and in-depth offering to all industries, banks, credit institutions and investment firms,” Hub said in a June 3 press release.
Accounts receivable insurance protects receivables from losses resulting from defaults, insolvency or repudiation by buyers and cancellation of import export permits, GCRM explained on its report. website. Insurance protects a company’s most liquid non-cash asset against bad debt losses and improves borrowing capacity, as financial institutions will lend more on insured accounts receivable (up to 90%) .
Political risk insurance is a risk transfer tool to protect a company’s sales, assets and investments abroad against losses resulting from:
- Currency invertibility – the inability to convert a foreign currency into a contract currency, or to transfer hard currency out of a foreign country
- Government cancellation of export or import permits
- War or civil unrest in foreign markets
- Breach of contract
- Expropriation, confiscation, nationalization and deprivation of property rights or control over assets
- Non-payment by a sovereign buyer
The advantages of this type of insurance include protecting foreign assets and investments against losses resulting from unforeseen actions of a foreign government and reducing the risk of establishing a presence abroad or in the world.
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