Dramatic increase in supply chain insurance demand

21 April 2009

22 April 2009 | Jake Kanter

The value of trade supply chain insurance claims rose by over a third last year, according to the Association of British Insurers (ABI).

The organisation said yesterday claims reached a total of £360 million in 2008, up from £257 million the year before - an increase of 40 per cent.

Trade credit insurance policies protect suppliers against the risk of customers failing to pay bills or going bust.

The figures come amid a reported reduction in the availability of the insurance and lobbying from business groups for the government to step in.

It has been suggested that in today's Budget, chancellor Alistair Darling will unveil a multi-billion pound state guarantee scheme for the cover.

The ABI figures, sourced from its member companies, showed the number of claims in the fourth quarter of 2008 rose 51 per cent to 8,366 as businesses felt the strain of the economic downturn.

Credit insurers have been criticised by business groups, such as the CBI, who claimed many companies have had policies "suddenly withdrawn".

But the ABI said the total value of turnover insured rose to £302.5 billion last year, up from £282 billion in 2007. Nick Starling, director of general insurance and health at the ABI, said the latest figures show insurers were playing a "crucial role" in helping customers through the recession.

SMapr2009

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