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Tough trading times leads to the highest number of trade credit insurance claims since 2009

  • More than 40 new claims every day in the first quarter of the year as tough trading times continue to bite firms.
  • Amount paid to help UK firms cope with bad debts were at their highest first quarter level. 
  • Recent company trading problems further highlights the need for trade credit insurance.  

The number of claims made by UK firms in the first quarter of the year to cover non-payment of debts were at their highest level since 2009 according to data published today from the Association of British Insurers (ABI). Corporate insolvencies roseby 13%1. on the previous quarter in England and Wales, with several recent high-profile company restructures further highlighting how challenging the trading environment remains.

ABI’s figures show that in the first quarter of 2018:

  • The number of new trade credit insurance claims notified at 3,966 was up by 50% on the previous quarter as the insolvency of Carillion hit. This equated to 44 new claims every day during the quarter, the highest quarterly figure since Q3, 2009.
  • The value of UK domestic claims paid - £54 million - was a record amount for the first quarter of a year.

Mark Shepherd, Assistant Director, Head of Property, Commercial and Specialist Lines, ABI, 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, whichdramatically highlighted how the ripple effect of a company failure can have a devastating impact throughout the supply chain. The commercialenvironment 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 businesses’ contingency planning”.

The ABI UK Trade Credit Data Report compiles data from nine trade credit insurers: AIG, Atradius, Coface, Euler Hermes, Markel International, QBE, Tokio Marine HCC, XL and Zurich.

 

-ENDS-

 

Notes for Editors

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1. 1. Figures from The Insolvency Service.

2. The Association of British Insurers is the voice of the UK’s world leading insurance and long-term savings industry.

A productive, inclusive and thriving sector, we are an industry that provides peace of mind to households and businesses across the UK and powers the growth of local and regional economies by enabling trade, risk taking, investment and innovation.

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4. More news and information from the ABI is available on our web site, www.abi.org.uk.


Last updated 15/06/2018