It has undoubtedly been a turbulent time for the majority businesses, and we’re not out of the woods yet. But The Channel Partnership is seeing clear signs that the credit insurance market is recovering confidence.
Confidence is good news for our existing clients and prospective clients. Rewind 12 months and the impacts of the pandemic were impossible to predict; the UK Government’s support was uncertain and unquantifiable, and we were entering unprecedented territory.
Government initiatives followed and provided support for business, alongside the £10bn Trade Credit Reinsurance Scheme that allowed credit insurance to function effectively; writing and renewing policies and giving business the confidence to continue trading and secure new contracts.
It is not surprising that credit insurers were less interested in new enquiries than they were in looking after existing customers, being that they faced huge losses from a potential surge in insolvencies; a surge that has not ‘yet’ fully come to fruition.
However, we believe a wave of insolvencies spanning all sectors is inevitable when the reinsurance scheme ends on 30 June and Government support can no longer to mask the dire state of many companies’ finances.
But as the sun starts to shine and Spring arrives it really is time to focus on what is positive. From the start of the year we have seen the credit insurance market recover confidence.
Credit insurers are:
• actively encouraging new enquiries.
• moving away from – and not seeking a renewal of – the UK Government reinsurance scheme.
• opening up cover for ‘higher risk’ companies – exemplified by the reintroduction of Coface’s ‘Top-Up / Marginal Risk’ policy, Topliner.
At a time when the economy is forecast to start growing it’s great to know that, for companies also wanting to grow, The Channel Partnership is able to offer the security of trade credit insurance. It will be a welcome reassurance to temper the number of insolvencies that are long overdue and just need to happen, from which our clients need protection.
Of course we remain alert to what’s happening across all sectors and our expert advisers are able to provide sector specific advice. Please give us a call.