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I am considering starting a new service to provide readers with the latest trade credit insurance news as it happens. Your help with this trial is greatly appreciated.

Initially, I will post new, pertinent credit insurance news stories (with links) on this page. News items older than a week will be removed to keep content fresh.

This does not impact the existing Credit Insurance News service. The usual round-up of Credit Insurance News, Business News, Jobs, New appointments and Events will still be available in the Digests published on the second Wednesday of every month.

You are very welcome to visit this page as often as you find it useful. However, it would be greatly appreciated if you could log in each time. This is simply so that I can measure how useful the service is likely to be to you. For the same reason, I would be very grateful if you would not share your login details with colleagues. If they would like to join the trial, they are, of course, very welcome.

I won't ask you for feedback, but you are very welcome to email me at sally.brown@creditinsurancenews.co.uk with your comments and suggestions.

Breaking Credit Insurance News:

The export credit insurance industry fared relatively well in 2020. The Berne Union's 2020 State of the Industry Report reports that despite the huge disruption and heightened risk environment inflicted by the COVID-19 pandemic, the export credit insurance industry fared relatively well in 2020, with new business increasing despite a sharp contraction in economic activity. In addition, the report notes that defaults and claims remained manageable because of the high degree of government support in many countries. Overall, Berne Union Members’ total new business i(ncluding both cross-border and domestic), increased by 2.4% in 2020 to US$2.5 trillion, driven by growth in short-term (ST) trade credit (+31%) as well as new domestic support, which increased sharply (+60%). Europe is still the largest market for ST export credit insurance (50%), followed by East Asia & Pacific and North America. However, almost all regions saw a moderate increase in cover, except for Latin America and Caribbean, and Sub-Saharan Africa. To read the Berne Union's report go to https://www.berneunion.org/Articles/Details/606/2020-State-of-the-Industry-Report.

COVID-19 trade credit reinsurance schemes "remain a mystery". InsuranceERM has published an article that advises that InsuranceERM recently asked the UK, French and German governments to disclose the total premiums they had accepted as part of Government-backed trade credit reinsurance schemes and how many claims had been paid by the time the schemes ended. However, all declined to respond to InsuranceERM's questions, arguing there was commercial sensitivity around releasing the numbers and that any disclosure would be premature as claims were continuing to come in. That said, InsuranceERM notes that there is little doubt that premiums outweighed claims in the trade credit reinsurance schemes, producing a significant financial windfall for governments. "It’s also true trade credit insurers appreciated them – initially, at least." To read InsuranceERM's article go to https://www.insuranceerm.com/news-comment/comment-covid-19-trade-credit-reinsurance-schemes-remain-a-mystery.html.

Atradius has confirmed a smooth transition for customers after the close of the UK's Trade Credit Reinsurance Scheme. Reinsurance News has reported that six weeks after the end of the UK government's Trade Credit Reinsurance Scheme, Atradius has commented that the handover process has run as expected: with a continuation of limits for customers and growing levels of cover. Stuart Ramsden, Regional Director of Atradius UK and Ireland, commented: “The Trade Credit Reinsurance Scheme was only ever designed to be a temporary measure, and while it was very much a welcome initiative, we were ready for its close, which came at the right time. Atradius was well prepared to take back full underwriting control once again, and we can confirm this has been the case with a smooth transition for our customers. . . .In fact, Atradius is underwriting higher cover levels proportionate to the level of trade now than prior to the pandemic.” To read Reinsurance News' article go to https://www.reinsurancene.ws/atradius-reports-smooth-transition-after-trade-credit-reinsurance-scheme/.

COVID-19 has put trade credit insurance "back on the map". Insurance Insider has reported that sources have advised that although UK trade credit insurers expect an influx of UK insolvencies at the end of the year, the market is well-positioned to withstand the elevated loss activity, with demand for the product and the appetite to write risk remaining strong. In addition, with the exception of particularly stressed industry segments, rates, which had been kept artificially low due to the rating caps put in place by government backstop schemes, are not expected to harden considerably in the near term. Regarding the trade credit backstop scheme, the article also notes that due to the lower-than-expected level of losses and the high level of premium payments needed for participation, the insurers who decided not to use the scheme could emerge from the pandemic in substantial profit, James Few, CEO of TigerRisk Partners, UK said: “The reality is that trade credit insurers have paid a portion of their premium to government schemes, wherein hindsight their diligent underwriting may have provided a similar result without ceding premiums away." To read Insurance Insider's article go to https://www.insuranceinsider.com/article/28w2o3w0rgl9o0j6ww35s/uk-trade-credit-insurers-expect-influx-of-insolvencies-starting-q4.

UK trade credit claims are expected to rise following a rise in insolvencies. Marsh has published an article by Eddie Feather, Senior Vice President, Claims Leader, Trade Credit & Political Risks at Marsh, which warns that as government support schemes wind down and companies overstretch themselves in the recovering economy, an escalation in insolvencies will lead to a rise in UK trade credit claims. Eddie cautions that as trade credit claims increase, insurers generally scrutinise them more closely for any failures from clients to comply with policy terms and conditions, which can lead to insurers rejecting or reducing claims settlements. Marsh research suggests that 90% of claims are rejected due to credit limit issues (including lack of justification, no credit limit, or credit limit on the wrong entity), failure or late reporting of an account that has breached reporting requirements, or delivery of goods after the MEP/stop shipment has expired. In addition, Eddie warns that as the UK economy recovers, Marsh anticipates an increase in fraudulent activity, which is not covered by a trade credit insurance policy. To read Marsh's article go to https://www.marsh.com/uk/insights/research/trade-credit-insurance-end-to-uk-support-likely-to-increase-claims.html.

Atradius expects the global economy to grow by 6.2% in 2021. Atradius' latest Global Economic Outlook reports that although the economic cost of the pandemic will likely be felt at some point, the pace of the recovery is "generally surprising to the upside", most notably among advanced markets with high vaccination rates. As a result, Atradius' new Economic Outlook forecasts a 2021 global growth rate of 6.2% — higher than was expected six months ago, followed by 4.7% growth in 2022. Advanced economies are expected to grow by 5.8% in 2021, surpassing pre-crisis activity levels, while recovery of 5.0% in 2021 is predicted in the Eurozone, with all member states expected to see GDP levels return to pre-pandemic levels by the end of 2022. However, the rebound is uneven, with tourism-dependent countries in Southern Europe lagging behind their Northern peers. Although the UK economy is still not expected to reach its pre-crisis level before 2022, its outlook is also substantially brighter than it was at the beginning of 2020, with annual GDP forecast to increase by 7.3%. To read Atradius' news release go to https://group.atradius.com/publications/economic-research/global-economic-outlook-august-2021.html.

Coface launches a new app, CofaeMove. Coface has announced that it has launched a new app, CofaMove, designed to provide its clients with swift credit risk management when they're "on the go". The app enables Coface's clients to order information services & reports, track the status of claims and indemnities, follow overdue account cases submitted through CofaNet, and use the “Indemnity Follow-up” tool to get information such as the Net Debt, the Estimated Claim Payment Amount, and the Estimated Payment Date. Coface advises that this will help credit managers be more reactive in terms of risk-taking. CofaMove is available in 15+ languages and can be accessed by CofaNet users at no extra cost. To read Coface's news release go to https://www.coface.com/News-Publications/News/CofaMove-Coface-s-app-for-on-the-go-credit-risk-management.

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