Following recent reports of businesses finding it more difficult to obtain trade credit insurance (TCI) the Builders Merchants Federation (BMF) working with the Association of British Insurers (ABI) and the Construction Leadership Council, conducted a survey of the current insurance landscape for BMF members.
The survey confirmed that credit insurance is recognised as a valuable business tool in the construction sector, with 45% of respondents using this solution.
Whilst responses illustrated an inevitable hardening of the market over the past 12 months due to increased insolvency activity and related business concerns for the year ahead, there were a number of positive indicators including:
• almost half of respondents have not experienced credit limit reductions;
• when limits were reduced, respondents acknowledged the increased credit risk reported by their insurer and took appropriate actions; and
• insurance industry is supportive of clients facing credit limit reductions, with 68% of respondents finding insurers receptive to appeals.
To support the construction sector further, ABI have now published TCI guidance for businesses. This guidance aims to outline key information insurers will look for and covers some of the recent wider issues in construction.
Further information can be found here:
- BMF – Press Release
- BMF – Summary of survey results
- ABI – The Trade Credit Insurers’ Guide – Construction
