The economy's current volatility requires your business to be sufficiently protected against the risk of non-payment for already delivered goods or services. Whilst best practice can help reduce your risk, trade credit insurance gives you access to exclusive market intelligence and vital protection.
In the UK, business insolvencies are expected to hit a 12-year high — peaking at 43% above pre-covid levels (opens a new window). Ongoing geopolitical instability, the US government's plans to introduce various tariffs, and delayed debt refinancing, is limiting the relief lower interest rates can provide. In addition, UK businesses need to absorb an increase in National Insurance, while facing labour shortages — adding further pressure on finances.
This economic uncertainty obligates your business to implement and follow best practice regarding credit risk management. Efficacious risk management can serve as a first line of defence for insulating your business against customer payment default. Anticipating default or insolvency of a customer is crucial to ensuring your business is resilient. However, more often than not, essential market information is often not publicly accessible. Supplementing best practice rules with trade credit insurance gives your business access to an otherwise inaccessible intelligence pool and network.
In addition to the intelligence made available to you, trade credit insurance acts as both a risk transfer solution and a cash flow tool. If a customer cannot pay for the services or goods already delivered to them, businesses will have to replace the missing cash flow. Trade credit insurance indemnifies these losses — helping businesses trade with confidence.
