Should you reconsider trade credit insurance in 2022?
A recent UKFT survey found that more than 90% of UK fashion and textile companies do not have credit insurance but as the UK and international trading environment remains uncertain, it may be time to look again if a policy could be right for your business.
Many UKFT members have found credit insurance to be a luxury that doesn’t meet their needs. Perhaps in the past they have found it to be too expensive or would only cover big companies that would pay anyway. Now cashflow is predicted to become more of a problem for buyers and suppliers in our sector, which significantly increases the risk of insolvencies and defaults on payments.
This means that UK fashion and textile firms may want to reconsider credit insurance and other means as a way of securing UK and export sales in 2022 and beyond.
UKFT held a webinar with Verlingue, Euler Hermes and Smart Currency Business to explore the options available, including what options there are for small brands with limited turnover. A recording and document is available to UKFT members. Please contact your membership manager or email@example.com for more details. Visit www.ukft.org/membership to find out more about becoming a UKFT member.
Dave Pickup, client director at credit insurance broker Verlingue, said “Right now there is an almost perfect storm because after the last two years we’ve had there is a lot of debt to be repaid, which places huge pressure on companies’ abilities to pay their invoices.”
Nur Sahbaz, risk underwriter at Euler Hermes, said the landscape remains very uncertain for retail and many businesses may be filing accounts that make them look very profitable now based on all the things they didn’t have to pay in the last 18 months but will have to pay or repay moving forward. “We expect insolvencies and defaults on payments to increase significantly over the next year at least,” she said. She also pointed to greater competition online and logistics issues as causing undue pressure into 2022 and beyond.
The document and recording covers:
- What is trade credit insurance?
- Why consider trade credit insurance now?
- What does trade insurance cover?
- How does a Whole Turnover Policy work?
- What are the alternatives to Whole Turnover Policies?
- What are the options for very small companies?
- Why should you consider trade credit insurance?
- What are the benefits of having trade credit insurance?