Brexit boosts demand for credit insurance

An increasing number of UK companies are reviewing credit insurance as economic uncertainty grows due to uncertainty triggered by UK’s exit from the European Union, according to the British Insurance Brokers' Association (BIBA)

The UK is today, March 29, triggering Article 50 of The Treaty of Lisbon which officially informs the EU of the UK’s intention to withdraw. Unless both sides agree on an extension, the UK and EU then have two years to negotiate a divorce.

"Following the June 2016 referendum the most immediate challenge for UK corporates has almost certainly resulted from risk associated with a weakened currency," said Mike Clark, chair of BIBA’s Trade Credit Focus Group.

"Many companies hedged forward to guard against excessive swings in sterling, but others failed to take adequate measures. For the latter, a 10 percent fall against the euro and 20 percent drop against the dollar has eroded short term cash-flow and longer term profit. The impact on businesses that operate on slim margins is therefore significant."

Trade credit insurance featured in the 2017 BIBA Manifesto which calls the UK government to work with BIBA and the trade credit insurance sector in assisting UK businesses to navigate through the issues, changes and uncertainties associated with Brexit.

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