The ABI have recently reported that over 50 companies with a trade credit insurance policy are being helped by their insurer everyday to cope with bad debts.
The number of trade credit insurance claims made so far this year by UK businesses has reached its highest level in ten years, according to latest figures from the Association of British Insurers (ABI). In the first quarter of the year 57 businesses were supported by trade credit insurance claims.
Continued Brexit uncertainty, competition from online sales, rising business rates, weaker consumer spending, and increased operating costs due to the weaker pound are all contributing to the continued challenging trading climate. Latest Government figures show a 6% increase in company insolvencies in the first three months of the year.
ABI figures highlight that in the first quarter of the year:
- There were 5,114 new trade credit insurance claims made, up 6% on the previous quarter to their highest quarterly level since quarter 2, 2009.
- The value of claims paid was £48 million, up £1 million on the previous quarter. The average payment was £9,000.
Mark Shepherd, Assistant Director, Head of General Insurance Policy at the ABI, said:
“The ten year high in the number of trade credit insurance claims made so far this year, highlights the vital role that trade credit insurers are playing in helping UK firms navigate tough trading times.
“While protecting against non-payment is essential, the expertise and support of trade credit insurers is also helping firms to grow and trade with greater confidence, reducing the risk of facing bad debts. Having this cover can also improve access to funding from banks and other financial institutions. While the number of firms with this protection is rising, too many firms remain at the mercy of bad debts. So, we must do more to raise awareness of the importance of trade credit insurance.”
The above information is provided by the Association of British Insurers (ABI).