The UK government and the Association of British Insurers (ABI) have announced that the temporary Trade Credit Reinsurance (TCR) scheme will close at the end of next month as planned.
According to the governments website, the scheme has directly benefitted over half a million businesses, providing a safety net to firms across the UK and safeguarding jobs, whilst protecting over £575 billion of business turnover by providing around £210 billion in insurance cover.
TCR was designed as a temporary solution to companies struggling to get insurance cover for transactions because of the pandemic.
The scheme is now closing in light of a positive outlook for economic recovery in 2021, along with the appetite for new business among participating insurers and the continued success of the vaccine rollout.
After its extension, which was announced last year, participating insurers have now indicated to the government that the scheme is no longer required and they are keen to take back full underwriting control.
Business Minister Paul Scully said: “The Trade Credit Reinsurance scheme has been a huge success story, with the government and insurers working closely together to back more than half a million businesses, protecting jobs and providing confidence through the pandemic.
“The scheme allowed trade to continue flowing despite the uncertainty caused by the pandemic, and it is only right that now our economic outlook has improved and businesses are getting back on their feet, the private sector resumes its role of providing insurance cover. I look forward to continuing to work with insurers to deliver the support which businesses need.”
Huw Evans, Director General of the ABI, said: “Insurers were pleased to have worked closely and constructively with the UK government on this temporary scheme. At a time when firms needed extra support during the pandemic, the scheme has helped ensure that businesses remained able to insure against potential risks in their supply chain.
“The scheme has been an excellent example of how government and the industry can work together on solutions to unprecedented market challenges to ensure the continued availability of insurance.”
John Glen, Economic Secretary to the Treasury, said: “This scheme has supported millions of jobs at over half a million businesses by giving companies and their supply chains confidence through the pandemic.
“It has been a significant success, providing nearly £210 billion of cover, and it’s right that trade credit insurance transitions back to the industry now the economy is starting to recover.”