Global economic uncertainties a huge cause of concern for local businesses
Trade credit insurance news internationally, has recently showcased a marked increase in the number of claims being made by businesses. The economic climate, ongoing liquidity issues, political uncertainty around world-wide leadership issues, the Turkish Lira and the sliding South African Rand all bring about economic uncertainties. In this environment, even relatively small incidents can affect confidence and leave economic black clouds hanging over businesses. We need to be aware and safeguard against it.
Local businesses feel the pinch of global economic trends
In the UK, an article posted by Credit Insurance News shows that in the last 18 months, 39 retailers have gone into administration – affecting 1 717 stores and over 27 000 employees. This can be attributed to the lower Chinese demand and increased global supply which caused the closure of Tata Steel and the decision by Arcelor Mittal to close its Spanish plant in Sestao.1
Mark Shepherd, Assistant Director, Head of Property, Commercial and Specialist Lines, Association of British Insurance weighs in “this is a tough time to be in business and it is not getting any easier… Never has the importance of trade credit insurance been greater! Without it, the survival of any business could be at risk. With too many firms at the mercy of non-payment of debts, the time has come for trade credit insurance to become an essential part of every business’ contingency planning”.2
You can no longer ignore the effect of business globally
It is increasingly evident that no local company can be completely confident that global events will not have a meaningful effect on them. It is imperative to take active steps to look at how best to protect one of your most valuable assets, namely the accounts receivable of your company. Trade credit insurance is a key tool in helping you to do this when you provide goods or services on a credit basis.
Trade credit insurance serves as an operational risk management tool
Insurance is typically seen by most companies and individuals as a grudge purchase. However, trade credit insurance is more than just insurance. It can also serve as a risk management tool that your company – whether operating locally or abroad, can use to mitigate financial losses and safeguard against the non-payment of your debtors.
With the number of trade credit policies rising internationally at a record high, more firms are recognising that this cover is an essential business tool to help them assess the credit risk of potential business partners, thus allowing them to make better lending decisions.
Our expertise at Credit Guarantee as a trade credit insurer allows companies like yours to navigate challenging trading conditions both locally and internationally. We not only safeguard you against non-payment from your debtors but also enable you to expand. During uncertain economic times as these, securing your valuables is a prudent strategy. Contact Credit Guarantee to find out how we can help you protect your cash flow.
Credit Guarantee is an authorised Financial Service Provider. Licence No. 17691