Latest figures released by the Association of British Insurers (ABI) reveal that trade credit insurers paid UK businesses an average of £4m per week in claims in 2016.
The annual trade credit insurance statistics highlight that:
- Total trade credit insurance claims paid in 2016 reached £210 million, or over £4m per week
- This is the highest amount (in number and value) since 2009
- The level of trade covered has reached £314 billion, and increase of 6% since 2015
- A fifth of policies covered business exporting goods or services
Total company insolvencies in the UK rose by 12.6% from 2015 which highlights that UK businesses continue to face risks with economic volatility in many export markets alongside subdued UK growth particularly across the manufacturing, construction and services sectors. The number of trade credit insurance policies continues to grow with almost 12,000 current polices as more businesses look to protect themselves against insolvency or protracted default. Moreover, 93% of these policies were arranged through an intermediary which demonstrates the on-going importance of the broker in getting the message on trade credit insurance out to the business community.
Trevor Williams, Chair of the ABI Trade Credit Committee and Head of Credit and Surety – Europe, QBE Insurance, commented:
“Trade credit insurance is an essential tool in enabling businesses to trade safely, both domestically and overseas. Without being able to claim for non-payment, UK businesses would have lost out to the tune of £4m a week – a significant figure which would have been a direct hit on their bottom line. Businesses, in particular SMEs, are unable to bear the brunt of non-payment which can have a detrimental impact on their financial health and can also have a negative knock-on effect rippling down the supply chain.
“In a climate of economic uncertainty, businesses are increasingly using trade credit insurance to protect themselves against the risk of non-payment. The fact that insured trade is at a record high is testament to the value businesses are increasingly placing on trade credit insurance, allowing them to trade with a safety net of protection against the evident as well as unexpected risks.”
For more information on how to ensure your trade credit insurance claims are paid, read our guide on how to get your credit insurance claims paid here.