Atradius welcomes govt plans for a temporary COVID-19 reinsurance scheme

Atradius has welcomed the government's intention to develop a treasury-backed temporary reinsurance scheme to aid the commercial and economic recovery from the impacts of COVID-19. It says the scheme should allow continued access to cover against the risk of supply chain insolvencies, but that to do so, it has to be implemented correctly.

The scheme, which has the backing of the Association of British Insurers and is supported jointly by the UK’s leading trade credit insurance providers, will ensure the continued availability of trade credit insurance, along the same lines as approaches taken in Europe and in Canada.

This is a vital protection to help minimise the knock-on effects of the challenging economic circumstances. This temporary scheme will ensure that trade credit insurers can continue to provide cover for businesses across the country by taking on more risk than they otherwise would have been able to, so helping the UK’s economic recovery.

Director of Atradius UK and Ireland, Alun Sweeney, said: "The trade credit insurance industry represented by our trade body the ABI has worked closely with the government to outline the difficult trading environment that lies ahead, and we are confident that this government-backed scheme, once implemented, will make a significant difference for businesses and their supply chains as they emerge from lockdown and trade flows are re-established.

“This is a welcome step by the government, and is fully supported by Atradius. We have seen similar action being taken in other markets across the world and we welcome the UK government’s recognition that UK firms should also be supported in this way. It’s important now to ensure that the detail of this temporary scheme is developed quickly to give reassurance to the thousands of businesses who rely on the security that trade credit insurance cover provides.

“The scheme could help protect the supply chain, safeguard jobs and provide a welcome boost to our struggling economy. Business confidence is a critical factor in creating the right environment for firms to be able to emerge from this very difficult period and trade credit insurance allows firms to trade with confidence. The priority now is to urgently work through with the Government how this scheme will operate in practice so that it can support businesses through the difficult trading environment, now and in the months ahead.”

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