Credit insurance claims decreasing
Trade credit insurance claims dropped for the first time in a year during the second quarter, according to figures from the Association of British Insurers (ABI).
The total number of claims fell by 39% to 5,661.
The ABI said its members believe claims peaked in the first quarter of 2009 and are likely to continue the downward trend.
However, ABI spokesperson Nick Starling warned: “While it is encouraging that claim numbers are falling, companies need to be careful because insolvencies are just as likely to happen coming out of a recession as going in.”
Despite the fall in the number of claims, the value of claims increased, with the total amount claimed at £81.4 million, up from £68.7 million in the second quarter of 2008.
The ABI said this is because struggling companies have tried to improve their fortunes by buying extra stock, and so are forced to write off greater amounts of debt when they go bankrupt.
“The economy is not out of the woods yet,” Starling said.
“Many companies may still be vulnerable, making trade credit insurance more valuable than ever,” Starling concludes.
Category: ABI News, Business Insurance News, Financials, Insurance News
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