New figures from the Association of British Insurers (ABI) reveals that trade credit insurers paid businesses the equivalent of over £4 million in claims every week last year.
The ABI’s annual trade credit insurance statistics highlight that:
With total company insolvencies in the UK rising by 12.6% .from 2015, UK businesses continue to face risks with economic volatility in many export markets, alongside subdued UK growth across the manufacturing, construction and services sector. Accordingly, the trade credit insurance market continues to grow with almost 12,000 policies in force, as more businesses look to protect themselves against insolvency or protracted debt.
Commenting on the figures, Trevor Williams, Chair of the ABI Trade Credit Committee, and Head of Credit and Surety – Europe, QBE Insurance, said “Trade credit insurance is an essential tool in enabling businesses to trade safely, both domestically and overseas. Without being able to claim for non-payment, UK businesses would have lost out to the tune of £4m a week – a significant figure which would have been a direct hit on their bottom line. Businesses, in particular SMEs, are unable to bear the brunt of non-payment which can have a detrimental impact on their financial health and can also have a negative knock-on effect rippling down the supply chain.
“In a climate of economic uncertainty, businesses are increasingly using trade credit insurance to protect themselves against the risk of non-payment. The fact that insured trade is at a record high is testament to the value businesses are increasingly placing on trade credit insurance, allowing them to trade with a safety net of protection against the evident as well as unexpected risks.”
The ABI UK Trade Credit Data Report compiles data from nine trade credit insurers; AIG, Atradius, Coface, Euler Hermes, Markel International, QBE, Tokio Marine HCC, XL and Zurich.