Give reasons why insurance is one of the trade finance instrument.

In order to succeed in a global marketplace and make more sales than foreign competitors, exports have to offer attractive sales terms with reliable payment methods. A trustworthy payment mode will minimize risks and fulfil the buyer’s needs. Export sale prioritizes full payment on time. Receiving the payment as early as possible is the goal of any exporter. On the contrary, importers want to delay payment as long as possible until the arrived goods are resold. This will generate income which they can use to pay the exporter. Trade finance plays a vital role in transaction services in international banks, and they manage all the risks involved in cross-border trade.