Following the news that the UK government is discussing a financial package to help bankroll existing trade credit insurance contracts;
Ben Carey-Evans, Insurance Analyst at GlobalData, a leading data and analytics company, comments:
“The reinsurance scheme aims to prevent the widespread withdrawal of cover across sections such as manufacturing and retail. The bill is expected to run into the hundreds of millions at least and will be extremely beneficial to the insurance industry and small businesses. Since COVID-19 was declared a pandemic, many insurers have withdrawn products in particularly risky lines.
“Trade credit insurance covers businesses against their customers defaulting on payments. This is especially important at the moment due to the number of businesses currently closed, but it is also very risky for insurers. The deal will allow insurers to continue offering trade credit to customers, safe in the knowledge they will have the government behind them as reinsurers.
“GlobalData’s Solvency II Performance Analytics shows that Allianz is by far the leading credit and suretyship insurer in the UK, followed by Tokio Marine and Zurich. This is a key line for Allianz, so being able to continue the offering, maintain its client relationships and help its customers pay their bills will be a significant boost to the insurer.”