The report from the Association of British Insurers (ABI) released earlier this month focuses on 2018 Q1 figures. The data clearly reflects the tough times being felt by many UK businesses, with the number of trade credit insurance claims received up 50% to 3,966, the highest number of new claims since Q3 2009. The value of UK domestic claims paid in the same period proved to be a record for any first quarter in a year at £54 million.
In addition to the highest quarterly claim submissions received in 9 years, The Insolvency Service report corporate insolvencies increased 13% on Q4 2017 in England and Wales.
A study compiled by Bibby Financial Services and The Vinden Partnership following the Carillion collapse in Q1 this year, uncovered that 60% of subcontractors have been exposed to bad debt in the last 12 months. A fifth of those cited the most common reason as being the customer folding, putting significant strain on the potential for business growth.
With more headline companies such as, New Look, Debenhams and House of Fraser restructuring and crippling late payment practices in the construction sector, the outlook continues to be testing for UK businesses across all sectors.
In response to the latest report, Assistant Director, Head of Property, Commercial and Specialist Lines at ABI, Mark Shepherd, said:
“This is a tough time to be in business and it is not getting any easier. The collapse of Carillion was one of a number of high-profile major insolvencies, which dramatically highlighted how the ripple effect of a company failure can have a devastating impact throughout the supply chain. The commercial environment remains a challenging one for customers, suppliers and insurers”.
“Never has the importance of trade credit insurance been greater – the survival of any business could be at risk without it. With too many firms at the mercy of non-payment of debts, the time has come for trade credit insurance to become an essential part of every business’s contingency planning”.
Trade Credit Insurance protects businesses from bad debts caused by the insolvency or default of a business customer. As specialist brokers, Acumen can arrange bespoke credit insurance policies to suit your business and trade sector so, if your business it at risk of being yet another victim of business failure, contact us today.