Europe’s trade credit insurance premiums on the rise

According to insurance broker Marsh, there has been a large increase in claims notifications in Europe since the last quarter of 2012.

According to Marsh trade credit premium rates have risen for those firms with poor loss histories since the fourth quarter of 2012, as customers increasingly “use their suppliers as a source of cash flow funding”, which in turn is creating a sharp rise in claims notifications. Trade credit insurance is often the last resort when chasing unpaid bills.

Marsh’s paper ‘European Credit Risks and the Effects on Premium Rates’ notes that outside of Australasia, Europe has seen the greatest increase in the number of claim filings in the last three months, particularly in the retail, construction, paper and engineering sectors and in the emerging economies of Central and Eastern Europe.

It has seen deteriorating insurance underwriting conditions across Europe since Q4 2012 for poorer risks, although demand for trade credit insurance products remains strong and capacity buoyant for stable risks.

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