MarketPower Assurance

Protecting Your Production. Expanding Your Horizons.

MarketPower Assurance protects your farm business from loss…

             …but the real benefits go far beyond insurance protection.

Credit insurance, the basis of the MarketPower Assurance program, is used by companies to protect their accounts receivable. Sales of agricultural commodities on credit terms (30 day, 60 day, 90 day, etc.) to domestic and export customers carry the risk of non-payment. This can be due to commercial risks like buyer insolvency (the inability to pay) or buyer default (the inability to pay on time), and political risks, where exports are involved.

Credit insurance has three principal uses:

1. Risk Mitigation
   Accounts receivable are insured to overcome the risk of a credit sale to a buyer whose financial condition is not well known. Doing business successfully (i.e., getting paid) in the past is no guarantee of the present creditworthiness of your customer/buyer.
2. Increased Profit Margin
   Sales can be made safely to new buyers in North America or abroad, effectively expanding the buyer pool to attract a premium price. Furthermore, sales can be made confidently on more competitive open account terms, eliminating the need for costly letters of credit.
3. Bank Financing
   When credit insurance is in place, the risk of non payment by a customer transfers to the insurance company underwriting the Program. Banks are therefore more comfortable lending up to 90% of the value of the receivables because the insurance company will indemnify a loss due to non-payment by a customer covered under the credit insurance program. Used properly, this can be a dramatic improvement for farmers seeking to borrow more at lower rates – potentially to repay higher interest rate loans (such as farm inputs).

Only available to large grain companies, until now…

Historically, only large grain companies, processors and crown corporations have been able to use credit insurance. It was desirable, but not deemed feasible by the industry, to issue thousands of individual credit insurance policies to thousands of farmers across Canada. Without an “aggregator” friendly to Canadian farmers, a traditional program was simply not realistic.

With MarketPower Assurance, a valuable credit insurance program is now available to individual producers across Canada.

With current global economic uncertainty and agricultural deregulation looming large as financial and credit challenges to the farm community, there has never been a better time for individual producers to utilize credit insurance.

Benefits of the MarketPower Assurance Program.

While the foundation of the MarketPower Assurance program is credit insurance, the Program itself has significant benefits apart from just insuring sales.

• Provides aggregation and buying power to producers.
• Reduces insurance costs compared to the cost of an individual insurance policy.
• FNA sponsored.
• Highest quality insurance syndication led by Atradius Credit Insurance, NV.
• Program designed specifically for Canadian agriculture and the mechanisms generally employed to sell commodities domestically and around the world.
• Provides farmers access to Pangaea Global Risk Management, a leading specialty credit and political risk insurance broker domiciled in Western Canada.
• Seeks to eliminate “sales from the combine” or other fire sale situations.
• Secure premium prices anywhere for commodities sold.
• Sell to a secure and pre-qualified buyer pool.
• Allows producer flexibility in sales terms, countries, buyers and timing.
• Ability to use deferred delivery arrangements.
• No “betting the farm” on sales to new buyers.

For less than 1% of your transaction's value, MarketPower Assurance protects you against a wide range of commercial and political risks and can give your farm a competitive edge.

Who’s behind this program?

The Program is underwritten by an experienced global insurer, Atradius Credit Insurance, N.V. Atradius is the second largest credit insurer in the world, with a 31% global market share and a premium volume over $2.0 billion. Atradius has over 160 offices in 42 countries around the world, makes 20,000 credit decisions daily and has a database of over 60 million companies worldwide. Atradius has over 85 years experience in credit insurance.

Pangaea Global Risk Management Inc. is a leading specialty credit and political risk broker domiciled in Western Canada. Pangaea brings many years experience structuring unique risk mitigation solutions primarily in the agricultural, resource and energy sectors.

How do I learn more?

Talk with your FNA Representative about how the MarketPower Assurance program can protect your production and expand your horizons. Call us today, toll-free, at 1-877-362-3276, or Click Here for a brochure with more info.