News

Why Business should look to Credit Insurance

  • Posted On: 14 October 2021

It looks like the long forecast increase in UK company failures is finally with us.  The Bank of England included this in its quarterly report last week, and Euler Hermes reckon a 20% increase in the last quarter of this year.

A bit closer, to home we have seen a noticeable uptick in claims and business failures, with half of the claims we have had this calendar year received after June. Below is a chart of the UK insolvency statistics through to June 2021, and even here you can see the start of the upswing.

The reasons? The end of the Government Covid support schemes, a surge in raw material prices, shortage of labour – they’ve all been quoted. The bottom line is that if the last 2 years have taught us anything, it is that it is very hard to predict what is round the corner, and in turn what effect events will have on your business’s supply chain.

Insurance was created to help smooth out these uncertainties, and credit insurance should be a key part of that tool kit, helping to provide more certainty in supply chains, and also helping business to raise finance.

Common sense would suggest that credit insurers would be cautious at the moment, but weirdly, prices for buying cover have plummeted in recent months, and insurers have more appetite for risk than at any point in the last 3 years. It is a product of a competitive market and one that any sensible FD or business owner should be making the most of. But be careful: the appetite is not there for all insurers, and not for all businesses either, and how insurers are approached is still important. This is where at is where we can help, - that, and market advice, maximising the value of cover, and of course making sure claims are paid when they arise. 

 

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