The Association of British Insurers (ABI) has today released figures highlighting how trade credit insurance has helped firms in the UK cope with record levels of bad debt. The third quarter of 2019 saw the average claim value increase by 228% from Q2 2019 to just over £67,000. This included claims made in both domestic and export markets and was largely influenced by the collapse of Thomas Cook.
The total value of claims by credit insurance policy holders in the UK also sharply increased, from £82 million in Q2 2019 to £271 million in Q3 2019, an increase of 330%. This is a record-breaking quarterly figure and almost double the previous high of £137 million in Q1 2009.
The first quarter of 2019 saw a 6% quarter-on-quarter rise in the number of new credit insurance claims to 5,114 and these new figures highlight the continued lifeline that trade credit insurance is providing to UK businesses during these turbulent times.
The ABI’s Policy Advisor, General Insurance, Graham Walsh commented: “The risk of company failure is continuing to weigh heavily across all business sectors. A prolonged period of economic uncertainty means that businesses continue to face a challenging trading environment, so it is not surprising that there is greater focus on the benefits of trade credit insurance. Customers increasingly rely on the accurate trading information provided by insurers to help inform their decisions, as well as the payment protection underpinning their policy. Firms will want to approach 2020 with optimism, but need to be ready for, and protected against, the risk of bad debts.”