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Trade credit insurers providing a lifeline to help businesses cope with record levels of bad debt

09/01/2020

Latest figures published today by the ABI highlight that trade credit insurers have helped UK firms cope with a record level of bad debts. The value of the average claim made has jumped up by over 200%, to just over £67,000, influenced by the collapse of Thomas Cook.

In the third quarter of 2019:

  • The average bad debt claim paid by trade credit insurers, covering UK domestic and export markets was £67,300, the highest ever recorded, and up 228% on the previous quarter. 
  • The value of new claims received leapt to £271 million, from £82 million in the previous quarter. This was a record-breaking quarterly figure, nearly double the previous high of £137 million in quarter 1, 2009, and largely reflected the demise of Thomas Cook.

 

Graham Walsh, ABI’s Policy Adviser, General  Insurance, commented:

WALSH Graham (PREFERRED).jpg“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.”

 

-ENDS-

 

Notes for Editors

 

Enquiries to:

Malcolm Tarling                        020 7216 7410    Mobile: 07776 147667

Laura Dawson                          020 7216 7338    Mobile: 0772 5245838

Su Crown                                 020 7216 7412    Mobile: 0772 5245297

 

  1. 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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Last updated 09/01/2020