Construction industry faces 30% premium rises.
Credit insurance premiums for the construction industry may rise by up to 30% as underwriters insist on up to date financial information on those they provide cover for.
Housebuilder Taylor Wimpey last week revealed a a £1.5bn loss in the first six months of 2008.
The poor results have demonstrated the concerns credit insurers face over potential payouts. Heath Lambert credit and surety managing director, Martin Holland, said that he has seen reductions on cover provided on construction companies and that cover could now be refused altogether.
He said: "Premium rates are starting to harden as more businesses fail and more claims are made. Premium rates have been soft for decades while the economy boomed, but as the economy deteriates we have found the retail industry followed by the construction industry to have been the worst effected, with credit insurance premiums for these sectors increasing further than other businesses.”
Holland warned that the downturn in the economy was a potentially bad time for insurers. While there has not been the level of claims that were seen in the last major recession, he said such claims tend to lag behind.
Thousands of constructon jobs have been cut this year as a result of the credit crisis.