"The COVID-19 pandemic is obviously having a serious impact on credit insurers, the insured companies and their customers. In some affected industry sectors, a lack of liquidity is imminent or has already manifested itself. We welcome emergency government measures with the objective to provide this liquidity, including temporary ECA schemes and schemes jointly with private credit insurers to provide additional support to trade credit and working capital.”

"COVID-19 is the biggest crisis the credit insurance industry has faced since the credit crunch of 08/09. Like the credit crunch, it is unprecedented, but carries a much higher and tragic human cost. 

Insurers, worried about exposures are starting to remove cover. It feels more targeted than in 08-09, but it’s early days. It probably has little practical effect in that the claims that will come in have already been underwritten. Removing cover now only serves to increase cynicism about the product, without doing a great deal to mitigate risk. 

The removal of cover will leave the industry badly placed when we start to return to normal, unless there is a change in underwriting criteria. It has been said of credit insurance that it is the oil that helps the wheels of industry to turn, and when businesses start to trade again, insurers will be asked to reinstate cover being taken away now to help those wheels turn. If they insist on management accounts, and up to date figures credit insurance will prove a hindrance, not a help."

"COVID-19 is likely to be a watershed moment for the credit insurance industry. The way we handle the crisis will be remembered for years to come. the number of new-to-market cases has declined significantly since the last recession, just ±14,000 businesses in the UK hold a policy. 

 It is in times like this that the service becomes much more relevant, but also when underwriters can be seen as ‘taking away the umbrella’. This is unfair — if you knew a storm was coming, would you go outside? Still, the industry has never been very good at appealing to SMEs, let alone helping them in their hour of need. We see this as a real opportunity to educate Britain's SMEs that this service is available."

"In order to control the spread of COVID-19, European countries have taken drastic containment measures. All trade credit insurers have taken their responsibility and implemented the necessary measures to guarantee the safety of their employees while maintaining business continuity in order to further support the economy. (IT tools made possible a different way of working replacing physical meetings by video conferences). 

We understand that the business of our clients and partners is also being put to a severe test. As the COVID-19 situation evolves every day and poses a whole series of new challenges, now more than ever, we are here to listen to your thoughts and needs." 

"In the most damaging downturn we have ever known, supporting clients whilst working from home is a challenge. Virtual meetings with clients and with the team enable us to monitor the effect of COVID-19 on their business and ensure adequate levels of cover are maintained or in the case of XOL policies where we need to maintain insurer support and amend policies where necessary. 

We are seeing fewer blanket limit reductions compared to 2008/9 and insurers are generally trying to be supportive although responses vary. It’s a very different crisis now; in 2008 trade activity had not dropped like this due to Government-mandated shutdowns hence reduced limits can make sense. 

The focus for many clients now is on optimising cash collection whilst still trying to support customers. A common feature then and now is excess debt. We expect insurers to focus on sustainability of debt as well as cash flows, with cover cut back on a commensurate basis."

"Many of us are wrestling with the dilemma of whether the treatment for COVID-19 will produce a worse net result than the disease; the lockdown will slow down the rate at which a human tragedy unfolds, helping the health services cope, but at great risk to the economy. Without the lockdown, the human tragedy would unfold more quickly, overwhelming the health service but with less lasting damage to the economy. 

Thousands of distressed companies will fail as a consequence of the lockdown, but many thousands of viable companies will also decide to call time by placing their companies in to Members Voluntary Liquidation (MVL). Company directors are grappling with the quandary of whether to risk family homes, pensions, and savings by investing more money into a business that might not survive a prolonged lockdown. The longer this goes on the more likely it will be that more viable companies will cease trading immediately to protect their personal assets and retained earnings by placing the company into a MVL, with the consequent loss of jobs and tax receipts."

"Although the COVID-19 crisis is likely to be of an unprecedented magnitude, its effects might not be as long-lasting as those of previous recessions, including the 2008-2009 Great Recession, which was rather systemic in nature. With aggressive monetary policy responses globally and record-breaking stimulus fiscal packages passed in many countries, we can hope that – provided the health situation stabilizes – global economic activity will gradually pick up to pre-crisis levels."

"We do expect and have already seen credit insurers looking to reduce their exposures going forward, at least whilst the country remains in lockdown. This may be enacted in two ways. Firstly, we may see insurers reducing exposures across the board, in percentage terms, i.e. a reduction of an approved limit by say 15-25%. However, where limits had been written on buyers that were high risk before the crisis, we can expect to see more drastic reductions. 

Secondly, insurers will no doubt focus more extreme measures on certain sectors which have been especially affected by the crisis. The airline and travel sector is a case in point. and, in such cases, we will not be surprised to see insurers remove all cover for the time being. 

On a positive note, we have seen some insurers take action to reduce their client's administration. This has tended to involve relaxing of reporting requirements on over dues and repayment plans."

"During 2008 - 2009 trade credit insurance made it on the agenda of each government in Europe: claims doubled, trade credit insurers cut back cover and raised premium rates. While trade contracted strongly corporates were, at the same time, in higher need of credit insurance. When this is all behind us and corporates will start to recover slowly, we will realize this all has led to significant losses. It is our strong view that 'for every trade credit risk, somewhere cover is available, but at the right price'. New innovations, such as digital platform where companies can request quotes from multiple insurers will be used more frequently. Such digital platforms could also be used by Governments when they announce, together with credit insurers, emergency measures to support corporates as well as the trade credit insurance industry also known as 'the invisible bank'."

"Some businesses have naturally been hit very hard as overnight they had to effectively close because all trade has ceased. Others have decided to furlough staff and or close for a period of time to preserve cash. When we move into the phase of restarting the economy, what will be equally important is how quickly and where cover is reinstated and this is a point we have voiced to some carriers already. The effects of a two month confinement period will potentially have a significant impact on GDP and this increases the likelihood of a recession so all underwriters are preparing for significant changes in the insolvency levels expected for the rest of 2020."

COVID-19 present multiple challenges to the industry. 

"In these rather uncertain times, it has been rather concerning to see the response from some insurers has been to pull up the draw bridge and retreat wholesale from their markets. Whilst acknowledging that events have created great uncertainty, not all sectors are going to be affected to the same degree, and so the provision of support to those who ensure trade of essential goods is an imperative. This is particularly true of developing and emerging nations who do not have the ability to provide financial stimulus like some in the West.
It is therefore essential that insurers continue to support market participants such as banks and financial institutions, who are taking the primary risk by supporting trade finance, by providing considered terms to assist in ensuring essential goods reach populations who are in no position to pay over the odds for life’s basics.
Insurers who fail to step up and provide support will have only themselves to blame if public opinion turns against them for not doing their bit!"

"The whole planet is in a very strange situation. Maybe this is the first time in the history that more than 4 billion people are at home. Even during the World War and other force majeure situations we haven’t seen this. Concerning the credit insurance providers, we must adapt the fastest we can to this special situation, in order to take many decisions: 

"It will be important that Credit Insurers support their policyholders wherever possible to trade on credit terms with their customers as we move forward. Homeworking is not new for some. It does however question, how much time is spent travelling and the associate costs when today's technology remains unused. We all Facetime, Skype, Zoom etc. our friends and family. What is wrong with using this technology with our customers? Face to face meetings will always be necessary but some of my long standing clients are using today's technology with me to save time and get more done in a day."

"The spread of COVID-19 is fast and global, aftermaths trade effects are not yet fully tangible, but this might be a turning point for Credit Insurance industry. This crisis is far more important than in 2008, but Credit Insurers who already went through digitalisation are undoubtedly better prepared today to manage their risks. At Tinubu Square we have been approached for the past 10 days by customers to help them implement and deliver urgent actions into their risk management. Our teams have implemented functionality modifications to our customers systems in order to: 

• For an ECA, enforcing their new State aid support mission by increasing the cap amount for their single risk product dedicated to micro exporters SMEs. 
• For a global private credit insurer design a bespoke bulk functionality to review their limit portfolio. 

These 2 typical examples are standard actions taken by insurers having to cope with similar situations."