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Credit Insurance In Israel: An Initial Overview And Analysis Of Considerations Affecting The Acceptance Rate

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  • Meital Graham-Rozen

    (Bank of Israel)

  • Noam Michelson

    (Bank of Israel)

Abstract

common practice in credit insurance is the use of acceptance rate—the amount of insurance provided relative to the amount of insurance requested— as the main parameter set by insurers which reflects the pricing of the risks in each transaction. This research aims to determine what the factors that impact the acceptance rate are. Using a novel dataset from a leading credit insurer, which includes the requested amount of insurance and the amount eventually provided, we find that the acceptance rate is impacted on primarily by the extent of the insurance company's exposure to the buyer's country, but also by the size of the insured company, the risk of the buyer with whom the company is transacting, and by the global real economic situation. These factors impact differently when the transaction involves domestic buyers or buyers abroad, apparently due to differences in information on the two types of buyers.

Suggested Citation

  • Meital Graham-Rozen & Noam Michelson, 2020. "Credit Insurance In Israel: An Initial Overview And Analysis Of Considerations Affecting The Acceptance Rate," Israel Economic Review, Bank of Israel, vol. 18(1), pages 177-214.
    • Handle: RePEc:boi:isrerv:v:18:y:2020:i:1:p:177-214
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    References listed on IDEAS

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