The Study Of Buyers’ Credit Rating System For The Domestic Trade Credit Insurance

Compared with mature markets such as Europe and the United States, the credit sales in China are still underdeveloped due to such factors as the unsound social credit system and the lack of the share of credit risk prevention mechanism. Such reality has even become an important reason for the insufficient consumer demand in China. In this context, domestic trade credit insurance which ensures the safety of the receivableaccounts arisesat this historic moment. Against a background of current economic fluctuations and fast changing enterprises, the enterprise credit risk in China is relatively high, which adds to the underwriting risk of insurance companies which insured domestic trade credit insurance, and puts forward higher requirements for risk control ability of the insurance company which insures domestic trade risks. Credit rating is an effective way to measure the risk, which is the first step in risk control.Therefore,designing a buyers’ credit rating system for the domestic trade credit insurance and rating buyers in domestic trades effectively are prerequisite and fundamental for the insurance company to improve risk management ability.On the basis of reference to the approaches and experience of famous rating agencies, banks and insurance companies, and to the risk evaluation practice of the domestic trade credit insurance department of Insurance Company X, this thesis specifies the credit-rating indices with regard to the characteristics of the data obtained from the buyers in domestic trades in the domestic trade credit insurance. Through comparative analysis of different rating methods, the thesis combines 5C credit evaluation method together with analytic hierarchy process to determine the rating index weight. Following the principle of theory integrated with practice, and qualitative analysis with quantitative analysis, the thesis establishes a buyers’ credit rating system for the domestic trade credit insurance, and verifies this system with specific case studies. It is an experiment in building up buyers’ credit rating system for the domestic trade credit insurance.