ABI’s Mark Shepherd says 2018 Q1 data shows the importance of taking out trade credit insurance
A record Q1 amount was paid this year by UK insurers to cover the non-payment of debts.
Published today by the ABI, the Q1 trade credit stats showed the amount paid to help UK firms cope with bad debts was £54m, with around 44 new claims every day during the quarter – the highest quarterly figure since Q3 2009.
The number of new trade credit insurance claims notified was 3,966, which was up 50% on the previous quarter.
The quarter saw the collapse of Carillion and the data showed insolvencies rose by 13% on the previous quarter in England and Wales.
The ABI said the data highlighted the current difficult trading environment and the need for firms to take out trade credit insurance.
Mark Shepherd, assistant director, head of property, commercial and specialist lines, ABI, said: “This is a tough time to be in business and it is not getting any easier.
“The collapse of Carillion was one of a number of high-profile major insolvencies, which dramatically highlighted how the ripple effect of a company failure can have a devastating impact throughout the supply chain.
“The commercial environment remains a challenging one for customers, suppliers and insurers.
“Never has the importance of trade credit insurance been greater – the survival of any business could be at risk without it.
“With too many firms at the mercy of non-payment of debts, the time has come for trade credit insurance to become an essential part of every businesses’ contingency planning.”
The ABI UK Trade Credit Data Report compiles data from nine trade credit insurers: AIG, Atradius, Coface, Euler Hermes, Markel International, QBE, Tokio Marine HCC, XL and Zurich.