Graham Walsh, a senior policy adviser at The Association of British Insurers, has praised the decision to extend the trade credit reinsurance scheme until 30 June 2021.
It was reported towards the end of April that the UK government was considering the implementation of a trade credit reinsurance backstop to prevent the widespread withdrawal of cover across sectors such as manufacturing and retail.
As the COVID-19 outbreak continued to spread and businesses struggled to pay bills, concerns mounted over potentially significant declines in the availability of trade insurance, or premiums increasing to unaffordable levels.
Through the scheme, which has been agreed following extensive discussion with the industry, the large majority of trade credit insurance coverage will be maintained in the UK.
“Maintaining trade credit insurance cover between suppliers and their clients is a key component in enabling the UK economy to overcome some of the challenges arising from the pandemic,” Walsh notes.
“We’re pleased to have been able to help the Government agree an extension to the scheme, meaning UK businesses can continue to benefit from a greater level of protection from trade credit cover than might have otherwise been possible.”