TCI lifeline for record bad debt: ABI

According to the latest figures published by the Association of British Insurers (ABI) trade credit insurers have helped UK firms cope with a record level of bad debts.

In the third quarter of 2019, the average bad debt claim paid by trade credit insurers, covering UK domestic and export markets was GBP67,300, the highest ever recorded, and up 228 percent on the previous quarter.

The value of new claims received leapt to GBP271 million, from GBP82 million in the previous quarter. This was a record-breaking quarterly figure, nearly double the previous high of GBP137 million in quarter 1, 2009, and largely reflected the demise of Thomas Cook.
Graham Walsh, ABI’s policy adviser, General  Insurance, commented: “The risk of company failure is continuing to weigh heavily across all business sectors. A prolonged period of economic uncertainty means that businesses continue to face a challenging trading environment, so it is not surprising that there is greater focus on the benefits of trade credit insurance. Customers increasingly rely on the accurate trading information provided by insurers to help inform their decisions, as well as the payment protection underpinning their policy. Firms will want to approach 2020 with optimism, but need to be ready for, and protected against, the risk of bad debts.”