The details of Government suppoort for UK Trade Credit Insurers have been confirmed. The Government is providing £10Bn of support. It covers from April 2020 and runs to the end of the year. It should mean that capacity and coverage will be maintained at a higher level than otherwise would have happened, though our general advice remains unchanged. This is:
- Not all credit insurers will necessarily sign up, though all have been involved in the discussions, There is a premium cost to signing up, and for some insurers the decision is not just a UK one. At this stage it seems unlikely that any would want to be left out. The application process should be completed this month.
- Insurers who do sign up will not write bad risks as a result of HMG backing
- Any reinstatement of cover will be demand led (clients will need to reapply per customer, blanket reinstatements are highly unlikely), and subject to risk criteria
- Premiums will probably continue to rise. Refunds are unlikely unless justified by the contract (e.g. no claims bonuses)
- Insurers will remain cautious on new business
Any queries please speak to your usual contact at W Denis Credit Risks or e-mail firstname.lastname@example.org. This inbox is checked every couple of hours.