According to figures released by the Association of British Insurers (ABI), claims paid by trade credit insurers to businesses due to non-payment of debts in 2017 totalled £225 million, the equivalent of £4.3 million every week. This is a 7 per cent increase on 2016, and the highest amount since 2009.
The level of trade covered by trade credit insurance in the UK now stands at a record £340 billion, a dramatic indication of the fact that UK businesses are facing the most challenging trading environment since the financial crisis.
As a result of a number of high profile insolvencies in the second half of 2017, the ABI says that the value of claims received in the last quarter of last year, at £130 million, was the highest quarterly figure since the first quarter, 2009.
Commenting on the figures, Mark Shepherd, ABI’s Assistant Director, Property, Commercial and Specialist Lines, says: “The failure of a number of high profile businesses, such as Monarch Airlines and Palmer and Harvey in 2017 and the recent collapse of Carillion, dramatically highlights the value of trade credit insurance. With over £4 million paid to businesses every week, trade credit insurance can make the difference between survival or demise following non-payment by a customer.
“The expertise of trade credit insurers is helping firms navigate challenging trading conditions, enabling them to expand at home and overseas, so helping Britain thrive. With the number of policies rising and insured trade at a record high, more firms are recognising that this cover is an essential business tool to help them assess the credit risk of potential business partners. But too many firms remain unprotected, and with intermediaries selling the vast majority of these policies, we need to raise awareness of the importance of trade credit insurance.”
If you are concerned about your finances or that of your business, our experts at BM Advisory can help. Whatever your situation, the sooner advice is taken, the greater the range of options that could be available to you to resolve any issues and get you and your business back on the right track. The initial consultation is free of charge, and you can rest assured that it will be in total confidence.
For further details or to discuss your specific circumstances, please contact Andy Pear or Mike Solomons.
What’s more, our partner business, BM Structured Finance, specialises in sourcing and restructuring debt finance for SME businesses. We match the most suitable products to each individual circumstance and work together to ensure compatibility and satisfaction, thereby enhancing the business’ cash flow liquidity and facilitating maximum growth.
Contact Simon Belton or your usual Beavis Morgan Partner for more information about how we can help you find the funding you and your business needs to grow and thrive.