In 2022, England and Wales saw the highest number of insolvencies since 2009 with 22,109 businesses becoming insolvent, a 57% increase compared to 20211.
Furthermore, Begbies Traynor Group’s latest Reg Flag Alert report reveals a 36% annual increase in the number of companies in ‘critical financial distress’ in the fourth quarter of 2022, compared to the same period a year ago2. Unfortunately, experts are pointing to yet another steep increase in insolvencies in 2023.
Managing cash flow is therefore a high priority for every business, so a key question is how do you manage credit risk at a time of increasing insolvencies? It is here that Trade Credit insurance can be of assistance. By exploring Trade Credit insurance, you will have access to detailed underwriting data that is more sophisticated than a simple credit check, this underwriter feedback will help you determine the credit worthiness of your customers when granting credit.
Trade Credit insurance not only allows you to trade with the security of knowing that the majority of your debtor ledger is insured; many credit insurers include collection services for doubtful debts helping to alleviate the bookkeeping burden on the business and resulting either in the money being collected or a claim being paid.
Any company that provides goods or services to other businesses on credit terms may benefit from Trade Credit insurance. Companies from small SMEs to major internationals can and do benefit from this type of cover.
Trade Credit insurance:
Insurers are still grating limits, so it is a sensible time to consider Trade Credit insurance as a preventative measure in case your customers get into financial distress.
To find out more about protecting your business during a period of economic uncertainty, fill in your details below and one of our specialists will be in touch.
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