One year end of the Trade Credit Reinsurance Scheme
One year on from the end of the government Trade Credit Reinsurance Scheme, leading trade credit insurer Atradius has confirmed that businesses are continuing to invest in cover to protect themselves from an uncertain future.
The scheme, which was introduced to ensure that trade credit insurance coverage and credit limits were maintained during the pandemic, offered a lifeline to many UK businesses who were struggling to find insurance cover at the time.
Several participating insurers, including Atradius, rallied the government to provide support to the trade credit industry and the response was well received with the scheme running until 30 June 2021, in line with the easing of restrictions. Since the end of the scheme, Atradius has implemented a seamless handover process and continued to offer credit management expertise to support its customers to mitigate risk.
Earlier this year, the leading trade credit insurer reported a customer retention rate of 92.9% for 2021, a figure that the company believes reflects its continued dedication to offering support even in the most challenging of times.
Thousands of UK businesses rely on the security of trade credit insurance, which protects them in the event that customers in the supply chain who owe money for products or services either do not pay their debts or become insolvent. In addition to protection against non-payment, insurers are able to advise and provide information on the financial strength of firms they are trading with.
James Burgess, commercial director of Atradius UK, commented: “The aim of the government’s support scheme was to help speed up economic recovery, protect supply chains, safeguard jobs, and increase business confidence; all of which proved to be extremely successful. It enabled insurers to maintain underwriting stances on limits which would otherwise have been unfeasible due to the pronounced economic impact, and we are incredibly proud to have supported thousands of businesses through such an unprecedented time.
“However, the scheme was only ever intended to be a short-term fix and although it was a very welcome initiative, the past year has shown that we were fully prepared to take back full underwriting control to offer the maximum support possible for our customers.”
Trade credit insurers like Atradius continually review their risk portfolio to ensure they are providing the maximum cover for customers. If an instance arises where the risk of non-payment is overwhelming, the insurer warns customers so preventative action can be taken.
James added: “One year on since the end of the scheme, and there’s no doubt that it offered a vital lifeline to thousands of businesses around the UK. Its successful implementation demonstrated to many, just how important credit insurance is, and we’ve definitely noticed an increased awareness and understanding of the value it provides.
“The UK economy is gradually recovering from the pandemic, but it is essential that businesses continue to safeguard themselves from an uncertain future. As a company, we’re looking forward to continuing to support our customers throughout their journey as we move towards economic recovery and look ahead to the future.”