Trade credit insurance claims across the United Kingdom are at their highest level in nearly 10 years. There were just shy of 4,000 new claims during the first quarter of 2018, according to the Association of British Insurers (ABI).
"Never has the importance of trade credit insurance been greater—the survival of any business could be at risk without it," said Mark Shepherd, assistant director, head of property, commercial and specialist lines for ABI in a release. "With too many firms at the mercy of nonpayment of debts, the time has come for trade credit insurance to become an essential part of every businesses' contingency planning."
Much of the uptick in claims stems from the collapse on Carillion earlier this year. The nearly 4,000 claims are up 50% compared to the previous quarter. Another first quarter record was the number of domestic claims paid—54 million pounds.
Corporate insolvencies, including Carillion, also increased by 13% in England and Wales compared to the one prior. "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. This is a tough time to be in business and it is not getting any easier," added Shepherd.
-Michael Miller, managing editor