Category: Trade credit & political risk · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed 2026-06-05
A specific account policy is the trade credit insurance structure under which cover is provided for one or a small number of named buyers, used principally for concentrated or high-value exposures where the insured prefers (and the insurer accepts) cover for selected buyers rather than its whole book.
Category: Trade credit and political risk Also known as: named buyer policy, single risk credit insurance First codified: Lloyd’s market practice from c.1960s; modern market structure from 1980s Related legislation: Insurance Act 2015 [1]; Insolvency Act 1986 [2]
A specific account policy is contrasted with the dominant whole turnover policy structure in that it covers only specifically named buyers (or in some structures a specifically defined transaction or series of transactions). The insured does not undertake to declare all qualifying trade for cover; instead, the parties agree at placement which buyers or transactions are covered, with the insurer underwriting each on an individual basis [3][4].
The structure is used principally where the insured’s credit exposure is concentrated in a small number of large buyers, where the insured wishes to insure a particular high-value transaction that would not otherwise justify a whole turnover programme, where the insured needs cover only for export buyers or specific markets, or where the credit risk of particular buyers is sufficiently unusual that a portfolio-pricing approach is not appropriate [3][4].
Specific account policies typically have higher per-transaction premium rates than whole turnover policies, reflecting the absence of portfolio risk diversification and the insurer’s individual underwriting cost. They are also typically structured for shorter policy periods, often single transactions or 12-month periods rather than the rolling annual basis of whole turnover programmes. Limits per buyer or per transaction can be very large — single specific account placements of £50m–£200m or more are not uncommon for major capital goods exports or large infrastructure projects [3][4].
The Lloyd’s market is a particularly important participant in specific account credit insurance, alongside specialist non-Lloyd’s London market and Bermuda-based credit insurers. The continental European credit insurance giants (Allianz Trade, Coface, Atradius) participate to a lesser extent in specific account business than they do in whole turnover, reflecting their portfolio-based business model [3][4].
Specific account policies are governed by the same legal framework as trade credit insurance generally. The Insurance Act 2015 governs the duty of fair presentation and warranty rules. The duty applies with particular force to specific account placements because the insurer’s underwriting is concentrated on the disclosed risk of the named buyer rather than spread across a portfolio [1].
The Insolvency Act 1986 (as amended) sets the framework for the buyer insolvency events that typically trigger cover. The specific account policy’s definition of insolvency events typically follows market-standard definitions, with the insurer’s specific underwriting attention often focused on the buyer’s likelihood of triggering a covered event during the policy period [2].
For specific account policies covering export trade, political risk perils are commonly included as well as commercial risks. The combined commercial and political cover under a specific account placement is structurally similar to single risk political risk cover and is often written by the same specialist underwriters [3][4].
UK specific account insurers are regulated by the PRA (prudential) and FCA (conduct) under the same regulatory regime as other credit insurers. Single risk underwriting requires specific capital allocation under Solvency II reflecting the concentration of risk in a single counterparty [5].
International conventions and treaties affecting specific account placements include the OECD Arrangement on Officially Supported Export Credits (where the placement coordinates with UK Export Finance or other ECA cover), the various bilateral investment treaties (providing investor-state arbitration rights that affect subrogation prospects), and the ICSID Convention 1965 (providing the principal forum for investor-state arbitration) [6][7].
A specific account placement is typically arranged when the insured identifies a specific high-value transaction or buyer that requires credit cover beyond what its main whole turnover programme provides. The insured (typically through a specialist credit broker) presents the proposed transaction to the specific account underwriting market with detailed disclosure of the buyer’s financial position, the proposed credit terms, the transaction structure and the insured’s commercial relationship with the buyer [3][4].
Underwriting is intensive and individually focused. The underwriter typically reviews the buyer’s last 3–5 years of audited accounts (or equivalent disclosure for non-audited entities), credit reports from multiple sources, sector analysis, country risk assessment (for export transactions), and the structure of the proposed credit (security, payment schedule, contractual protections). Due diligence may take several weeks for complex placements [3][4].
Premium pricing for specific account credit insurance reflects the underwriter’s individual assessment of the buyer risk plus an underwriting margin for the concentration of risk. Rates typically range from 0.5% per annum for low-risk OECD buyers to several percent per annum for higher-risk emerging market buyers, with rates often higher than those that would apply if the same buyer were covered under a portfolio whole turnover programme [3][4].
Claims handling for specific account placements is also individually focused. The insurer’s exposure to a single buyer means that a single loss can be very significant, with corresponding attention to the claims investigation. Recovery rights and subrogation procedures are typically more developed than in whole turnover policies, with the insurer often actively engaged in the buyer’s insolvency proceedings or in pursuing recovery through commercial channels [3][4].
Single named buyer cover: cover for a specific commercial counterparty across all qualifying trade.
Single transaction cover: cover for a specific identified transaction (e.g. a specific contract for capital goods sale).
Project-specific credit cover: cover for credit exposures arising from a specific project (e.g. a power station construction project with multiple suppliers and a single off-taker).
Multi-buyer specific account: cover for a small number of named buyers (typically 2–5), structured as a hybrid between full specific account and whole turnover.
Excess of loss specific account: specific account cover written excess of an aggregate self-insured retention.
Political risk specific account: cover for a specific transaction or investment with political risk perils as the principal exposure, structurally similar to confiscation-expropriation-nationalisation cover but applied to specific commercial transactions rather than equity investments.
Project finance specific account: cover for project finance transactions, addressing the long-term and complex risk profile of project finance.
Combined commercial and political specific account: integrated cover for both commercial and political perils on a specific transaction.
A UK manufacturer of telecommunications equipment secures a £45m export contract to supply equipment to a state-owned telecommunications operator in an emerging market. The credit terms involve a 24-month payment schedule with progress payments tied to delivery and commissioning milestones. The transaction exceeds the country and buyer limits available under the manufacturer’s main whole turnover programme, so the company seeks specific account cover for the additional exposure. The specific account placement provides cover of £40m (covering the post-delivery balance under the credit schedule) for both commercial and political risks, with a policy period running through to final payment plus a 6-month tail. Annual premium is approximately £450,000 (1.5% per annum, higher than the whole turnover programme reflecting the concentration and the country risk). The cover responds throughout the policy period; in this example no claim arises and the cover runs to natural expiry. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
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