We are living through a time of unprecedented uncertainty and, as yet, with no clear end to the crisis nor any clear way out of the lockdown. There is a flood of information coming at all of us so this is an attempt to explain in brief what is happening in the credit insurance market AS AT TODAY’S DATE (April 2020)!
There are some core things we can take from this situation, and we have headlined them below. To see our full view on this, we have created a full document – available for download here.
1. Credit insurance covers insolvencies and protracted default – there is no “COVID 19 exclusion clause” for credit insurance policies.
2. Premium Payments must be maintained.
3. Claims are going to increase dramatically – with forecasts for insolvencies in the UK to increase to increase by between 20% – 40%.
4. Payment of outstanding invoices is going to slow, as companies preserve cash and stretch supplier credit to the maximum.5. Credit insurers will be continually reviewing their insured risk exposure.
We at The Channel Partnership will do our best to keep you updated with significant changes – though we are mindful of the masses of information coming at all of us from all angles at the moment so will try to keep things brief.
See our follow-up post ‘Managing credit insurance through the COVID 19 crisis Part 2’ here