The Association of British Insurers (ABI) has released the latest trade credit insurance figures… and while payouts made to UK businesses in 2017 are at their highest level since 2009, “too many” firms continue to tread without cover.
With the likes of Carillion, Monarch, Palmer & Harvey, Multiyork, and Misco all suffering the same fate, the ABI wants more suppliers and contractors to realise the crucial role played by trade credit insurance. Even with data showing a total of 11,017 claims in 2017, translating to 212 entities per week.
According to the ABI, claims paid to businesses due to non-payment of debts last year reached £225 million, or the equivalent of £4.3 million on a weekly basis. The amount, a 7% increase compared to 2016, is the highest since 2009.
In fact, the level of trade covered in the UK stands at a record £340 billion. The ABI reported that a fifth of policies covered businesses exporting goods or services overseas, while over three-quarters covered domestic trade. It said nearly 13,000 policies are in force.
“Unsurprisingly, given a number of high profile insolvencies in the second half of 2017, the value of claims received in the last quarter of last year, at £130 million, was the highest quarterly figure since the first quarter, 2009,” added the trade body.
The ABI’s UK trade credit data report compiles data from trade credit insurers AIG, Atradius, Coface, Euler Hermes, Markel International, QBE, Tokio Marine HCC, XL, and Zurich.
“The expertise of trade credit insurers is helping firms navigate challenging trading conditions, enabling them to expand at home and overseas, so helping Britain thrive,” said Mark Shepherd, ABI assistant director, property, commercial, and specialist lines. “With the number of policies rising and insured trade at a record high, more firms are recognising that this cover is an essential business tool to help them assess the credit risk of potential business partners.
“But too many firms remain unprotected, and with intermediaries selling the vast majority of these policies, we need to raise awareness of the importance of trade credit insurance.”