General Insurance Article - Trade credit insurance rates rising across Europe


 Rising European trade credit insurance rates are being fuelled by increasing risk and bad debt losses, according to Marsh. Rates have risen for those firms with poor loss histories since Q4 2012, as customers increasingly use their suppliers as a source of cash flow funding, which in turn is creating a sharp uptick in claims notifications.

 In its paper, European Credit Risks and the Effects on Premium Rates, Marsh reports an increase in claims notifications and deteriorating insurance underwriting conditions across Europe since Q4 2012, although demand for trade credit insurance products remains strong and capacity buoyant for stable risks.

 Tim Smith, EMEA Trade Credit Practice Leader, commented: “Trade credit insurance claims, in particular from Mediterranean countries and Central and Eastern European territories, are hitting the insurance market with increasing frequency and severity through 2013.

 “Many firms are unable or unwilling to pay their suppliers on time, choosing instead to pay late to aid cash flow, or waiting until they have received funds from elsewhere in the supply chain. This situation is becoming increasingly common in Europe, particularly in the retail, construction, paper and engineering trade sectors.”

 In a bid to combat this growing trend, European Member States were required by March of this year to comply with the European Union’s Directive 2011/7/EU, which is designed to harmonise the period of payment between organisations and imposes financial penalties and compensation for late remittance.

 Tim Smith continued: “While the European Union has recognised that affirmative action needs to be taken to tackle the issue of late payments as part of the wider economic recovery strategy, it remains to be seen whether the Directive will have a lasting impact on payment patterns.”

Back to Index


Similar News to this Story

Are you testing your smoke alarms often enough
Only 6% of residents follow safety recommendations for smoke alarms. More than one in 10 never test their alarms. Forgetfulness is given as the main r
SolvencyII review EU must unlock capital for Europes future
Insurance Europe welcomes the launch of the European Commission’s consultation on the Level 2 technical measures of the Solvency II review. It is an o
Mapathon puts Worlds vulnerable communities on the Map
The insurance data and analytics team at LexisNexis® Risk Solutions in the United States and Ireland have led a Mapathon in support of Missing Maps, a

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.