Some thoughts from the ABI on trade credit insurance, as the UK business sector faces increased costs on debt servicing, plus slow retail sales, declining house prices, higher energy bills and more headwinds. The public sector is also likely to push for 90 day payment terms as part of the deal offered to smaller contractors, as their budgets come under pressure on the run up to the 2024 General Election.
Here’s the ABI statement;
The decision of large construction firm Henry Construction Projects to appoint administrators highlights the continued uncertain and challenging trading environment for UK businesses. Government figures show that company insolvencies in England and Wales in 2022 was 22,109, which was the highest number since 2009 and 57% higher than 2021.
In the first quarter of this year, ABI member trade credit insurers received 5,300 claims for businesses, up 81% on the same quarter last year.
As UK businesses of all shapes and sizes adjust to life after Brexit, try to get back on their feet after the pandemic, and with rising costs of many parts and raw materials, the Association of British Insurers urges firms with trade credit insurance to speak to their insurer for help and advice about how to best navigate the uncertain trading environment. Non or late payment for goods and services can put any firm under severe financial pressure, especially the small and medium sized.
Lucy Fraser, the ABI’s General Insurance Policy Adviser said: “In these tough trading times, every firm, whatever their size, should be thinking about trade credit insurance. This cover not only protects suppliers from the failure of firms to pay for products or services provided, but the expertise of trade credit insurers can help protect businesses against bad debts and guide them on how to grow as safely as possible”.
Businesses of all sizes might be struggling to cover their debts in the current trading environment and trade credit insurance is one of the financial tools that can help a business. So, business should be considering the best way that they can protect against nonpayment or late payments. Trade credit insurers not only protects suppliers from the failure of firms to pay for products or services provided, but the expertise of trade credit insurers can help protect businesses against bad debts and guide them on how to grow as safely as possible.
For further information from the Association of British Insurers on how trade credit insurance can help businesses navigate these difficult trading times: