Anyone who needs convincing as to the importance of trade credit insurance perhaps just needs to look at the latest numbers released by the Association of British Insurers (ABI)
According to the ABI’s data, the value of the average bad debt claim paid by trade credit insurers in the third quarter of 2019 surged 228% compared to the previous quarter. The £67,300 figure was described as the highest ever recorded.
Meanwhile the trade body said the value of new claims received rose from £82 million to £271 million, noting further: “This was a record-breaking quarterly figure, nearly double the previous high of £137 million in quarter one, 2009, and largely reflected the demise of Thomas Cook.”
The freshly published figures relate to trade credit insurers covering the UK domestic and export markets.
Commenting on the data, the ABI’s policy adviser for general insurance Graham Walsh stated: “The risk of company failure is continuing to weigh heavily across all business sectors. A prolonged period of economic uncertainty means that businesses continue to face a challenging trading environment, so it is not surprising that there is greater focus on the benefits of trade credit insurance.
“Customers increasingly rely on the accurate trading information provided by insurers to help inform their decisions, as well as the payment protection underpinning their policy. Firms will want to approach 2020 with optimism, but need to be ready for, and protected against, the risk of bad debts.”
