Trade Credit Insurance Insurers pay out £4m each week
I’ve always subscribed to Mark Twain’s quote “never let the truth get in the way of a good story” so it’s always a pleasant surprise when the facts come out in support of the narrative.
The Association of British Insurers (ABI) has released figures relating to credit insurance claims during 2016. The facts in this case are that trade credit insurers paid UK businesses over £4 million in claims every week last year. Total claims paid to businesses due to non-payment by debtors in 2016 was £210 million, the equivalent of over £4 million a week and up just over 40% on 2015; the highest amount since 2009.
The number of claims notified during 2016 was 12,221, again, this was the highest level since 2009. The figures are unsurprising as the level of trade covered by trade credit insurance in the UK has reached £314 billion, up 6% on £295 billion in 2015. Put bluntly, credit insurance is covering more trade for more companies at a time when there are challenges for most sectors in the economy. Our experience is that companies are increasingly realising the business benefits of credit insurance both for domestic trade and increasingly as a key part of business strategy in reaching export markets. The ABI report confirms that around 20% of credit insurance policies taken out by UK companies are to cover export trade. One statistic that remains unchanged is that 93% of all businesses chose to use brokers with specialists like The Channel Partnership dominating the field.
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.
We’re always happy to hear from companies interested in finding out more about how The Channel Partnership can help them. Please contact us on 01275 817320.