The tsunami on the High Street continues to gather pace, as big name retailers like House of Fraser, Maplins, Poundworld and M&S all suffer store closures, or financial restructuring. It isn’t all gravy in the public sector either: Earlier in the year construction giant Carillion finally bit the dust, causing many smaller supplier services companies to go under as hospital and school projects were delayed, or cancelled.
But many smaller firms are also finding the waters choppy and this has prompted a rising number of trade credit insurance claims. Here’s more news in detail from the ABI.
The number of claims made by UK firms in the first quarter of the year to cover non-payment of debts were at their highest level since 2009 according to data published today from the Association of British Insurers (ABI). Corporate insolvencies rose by 13%. on the previous quarter in England and Wales, with several recent high-profile company restructures further highlighting how challenging the trading environment remains.
ABI’s figures show that in the first quarter of 2018:
- The number of new trade credit insurance claims notified at 3,966 was up by 50% on the previous quarter as the insolvency of Carillion hit. This equated to 44 new claims every day during the quarter, the highest quarterly figure since Q3, 2009.
- The value of UK domestic claims paid – £54 million – was a record amount for the first quarter of a year.
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.