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Source: Zhihu.
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Credit insurance and guarantee insurance are both new types of insurance business with the development of commercial credit. Because these two concepts often appear together, it is easy to cause confusion.
Credit insurance is the insurance in which the obligee insures the credit risk of the insured (debtor) with the insurer; Guarantee insurance is the insurance in which the insurer provides his own credit guarantee to the obligee according to the requirements of the insured.
Credit insurance and guarantee insurance are both insurances in which the insurer is liable for the losses caused by the actions or omissions of the insured to the obligee, but their objects are different. The former is that the obligee requires the insurer to guarantee the credit of the insured, while the latter is that the insured requires the insurer to guarantee the obligee's funds.
Credit insurance and guarantee insurance mainly have the following differences;
1, credit insurance is contracted by policy, and the insurance format is not much different from other property insurance. Guarantee insurance is to contract the guarantee by issuing a guarantee, which is essentially different from property insurance policy and only stipulates the guarantee matters.
2. The insured of credit insurance is the obligee, and the contract is the credit insurance of the insured. Except the insurer, the insurance contract only involves the obligee and obligor. Guarantee insurance means that the debtor insures his own credit risk at the request of the creditor, and the debtor is guaranteed by an insurance company, which is actually a guarantor. In order to reduce risks, insurance companies often require debtors to provide counter-guarantees, so that besides insurance companies, guarantee insurance also involves the obligees of debtors and counter-guarantors.
3. In credit insurance, the applicant pays the fee to transfer the risk of loss that the debtor may suffer due to non-performance of obligations to the insurer, and the insurer bears the real risk. In guarantee insurance, the obligor pays the insurance premium in order to obtain the certificate that the obligee of guarantee repeatedly performs its obligations. The insurer issued a letter of guarantee, but all the obligations of the reinsurer are still borne by the debtor himself, and there is no risk transfer. The premium charged by the insurer is a guarantee fee equivalent to its credit qualification. The risk of the guarantee fee is still borne by the debtor, and only when the debtor is unable to bear it can he perform his obligations on his behalf. Therefore, for the insurer, the risk of operating guarantee insurance is quite small.
The reference material is the commercial property insurance book. Relevant business information,
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.