Last week, a few publications including the FT teased details of a forthcoming agreement between government and insurers. Similar measures have been taken in France and Germany to support local businesses and improve business confidence in the face of a truly unique threat to both local and global supply chains.
The reinsurance agreement is designed to provide temporary support to ensure that insurers don’t cut or drastically reduce the vital cover required to ensure that B2B trade continues without more friction. Credit insurance is also a key component of many banks on non-bank providers of invoice finance, in the form of bad debt protection. So the steps being taken will hopefully ensure cashflow is supported through these facilities too.
The Economic Secretary to the Treasury, John Glen added:
“This country’s businesses are crucial in helping us to kick start the economy as we get back to work, and I will do everything I can to help support them through this difficult time. By guaranteeing business-to-business transactions currently supported by trade credit insurance, we will help to maintain a vital cog in our economy.”
Support packages have been rolled out to support individuals, businesses and the broader economy over the last few weeks and the complexity in coordinating each respective package takes time to deploy. It is expected, subject to the fine print, that an agreement in principle will be delivered in the very near future and run until the end of the year. At the end of 2020 a formal review will be undertaken to assess whether or not the measures should be extended.
Most importantly – and while more cautious – insurers are still willing to provide cover in the form of invoice insurance, providing significantly more confidence and security to UK businesses that are still in a position to trade with other businesses both locally and overseas. With lockdown measures slowly being eased both home and abroad, and the ‘new normal’ still being worked out, businesses are eager to maintain trade.
James Dalton, ABI’s Director of General Insurance Policy, noted:
“”As we emerge from lockdown and restart the economy, we have worked with the Government to outline the difficult trading environment that lies ahead, and this Government-backed scheme, once implemented, will help businesses and their supply chains get back on their feet.”
Whilst there are many other challenges facing businesses of all shapes and sizes, taking out invoice insurance is a simple step to a safer and more secure business. Most importantly securing the lifeblood of your business, cashflow.
We’d be delighted if you get an invoice insurance quote by clicking the link below. It’s a simple process and won’t take long.