Companies are stepping up purchases of insurance to protect themselves against i...
LONDON - Companies are stepping up purchases of insurance to protect themselves against insolvencies in Britain, industry sources say, in part due to concerns about the impact of Brexit.
This has contributed to high-profile company collapses like that of travel firm Thomas Cook, which also suffered under the weight of its debt pile. An example could be a Dutch flower seller supplying a British supermarket chain, buying insurance in case of non-payment. Richard Marriage, managing director in trade credit at insurer Nexus, said the firm had seen a 10% rise in enquiries this year, with the prospect of Britain failing to reach a negotiated withdrawal from the European Union - a so-called no-deal Brexit - one factor in the increased interest.Insurer Atradius has seen a 5.5% rise in its customers this year, and credit periods have shortened in Britain.
If there is a no-deal Brexit, supply chains are likely to be disrupted, risking more insolvencies. Alexis Garatti, head of macroeconomic research at trade credit insurer Euler Hermes, predicts UK insolvencies could rise by 15% next year under a no-deal Brexit. He put the probability of a no-deal Brexit at 40%.
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