Insurers’ costs escalated in 2009, but final-quarter reduction is hailed as ‘significant improvement’
The number of claims paid by trade credit insurers almost doubled during the recession, according to the ABI.
Trade credit insurers paid out £320m last year compared to £164m in 2008.
However, the number of claims received by trade credit insurers eased 23% in the fourth quarter compared to the third quarter, as the economy picked up.
The ABI’s director of general insurance and health, Nick Starling, said: “While trade credit insurers paid out a record amount in claims to policyholders during 2009, Q4 marked a significant improvement with the number of new claims received down 23% on the previous quarter.
“This is consistent with the end of the downward trends observed in various sectors of the economy, and the corresponding reduction in levels of corporate failures observed in Q4 2009.
“The outlook for 2010, although improved from 2009, remains highly uncertain, which reinforces the importance of protection and risk management services provided by trade credit insurers.”
While the UK makes a slow recovery, which should continue to ease trade credit claims, Europe as a whole faces sluggish growth.
Trade credit insurer Coface said fourth-quarter growth in the Eurozone was disappointing. It noted that growth stagnated in Germany and remained negative in Spain and Italy. Coface predicted economic growth of just 0.8% in the Eurozone for 2010.
Coface president François David commented: “Emerging countries have nearly recovered their pre-crisis growth level.
“The United States shows a respectable but risky recovery, and the ending of the crisis is very laborious in Europe.”
• ACE Global Markets has appointed Stuart James as head of trade credit, based in London. James joins from EH Collections, part of trade credit insurer Euler Hermes. He was previously head of strategic and global account management. James will start in June and report to Julian Edwards, head of political risk and credit at ACE Global Markets.