24 August 2015 Insurance

UK trade credit insurers covered record amount of risk in 2014

UK trade credit insurers covered a record amount of risk in 2014, according to new data from the Association of British Insurers (ABI).

Figures from the organisation showed that nearly 10,600 trade credit insurance policies were taken out last year, resulting in a turnover worth £315 billion, a 6.6 percent increase on 2013 figures.

However, the average premium for a trade credit insurance policy has fallen by more than two percent since 2013. The number of claims made by businesses also decreased by 1.9 percent over the time period to 10,300, reflecting improvements in the UK economy.

In 2014, small businesses made 3,900 claims to trade credit insurers, 38 percent of the total claims made.

Mark Shepherd, manager for general insurance policy, ABI, said: "Trade credit insurers are covering a record £315 billion worth of turnover for UK businesses, protecting them against the financial risks of trading. Without this insurance in place, companies are at risk of large financial losses, and potential job losses if a company they are supplying gets into difficulty.

“As the UK economy improves, trade credit insurance provides reassurance and encourages businesses to expand, supporting sustainable growth.

"Trade credit insurance is particularly valuable for small businesses that are looking to grow by protecting their supply of goods and services on credit to their trading partners. This insurance can improve access to finance, and credit insurers work with their customers to help them understand and manage their risk when trading with other firms."

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