Towergate's new credit insurance scheme must provide cover to the most needy businesses
Towergate’s launch of trade credit insurance scheme for SMEs comes at a crucial time for the credit insurance market.
Trade credit insurers’ reputation has taken a battering in recent months as insurers have pulled cover form companies operating in certain sectors of the economy, sparking anger from the business community.
The government has been looking at the potential for a state-backed credit insurance scheme, similar to the one adopted by France last year, but so far has yet to take action.
As this month’s Insurance Agenda argues, the insurance industry should be looking for ways to provide cover, such as through higher premiums, rather than unilaterally pulling it from risky businesses.
Towergate’s new product – and the similar scheme launched by Aon earlier this month – will hopefully provide some much needed insurance cover to hard-pressed businesses and some positive PR for the embattled credit insurance market.
What is not clear, however, is whether these products can provide cover to those businesses that really need it, those that are finding it difficult to get cover, such as those in the non-food retail and construction sectors. If these schemes are too be truly valuable then that is what they must do.