2022 Predictions: Businesses will need to rebuild amid continuing uncertainty

The fallout from COVID-19 has included widespread closures, business disruptions, a rollercoaster of restrictions and supply chain interruptions causing economic recession and a shift in global trade trends over the course of another tumultuous year for businesses.

With 2022 just round the corner, many are hoping for change, certainty and positivity. However, the risks darkening the path ahead include the further uncertainties relating to COVID-19, rising insolvencies, ongoing Brexit-related disruptions and the repercussions of the protracted trade war. The difficult trading environment is evidenced in the latest Atradius Payment Practices Barometer which found 44% of the total value of B2B sales in the UK was reported as overdue this year with 8% completely written off. Looking ahead, Atradius economists forecast UK insolvencies will rise 33% in 2022 compared with pre-pandemic levels as business support measures fade away.

To be resilient in 2022, the most astute businesses will need to rebuild their armour in readiness. Early preparation, agility to adapt to changing circumstances and robust risk mitigation are essential to future-proofing against whatever eventuality 2022 brings. As a result, businesses will rely more on trade credit insurers; according to the Payment Practices Barometer, 56% of UK businesses plan to use credit insurance next year, compared with 39% last year. This creates a valuable opportunity for insurers, in partnership with brokers, to demonstrate the worth of trade credit insurance and becoming indispensable now and for the future.

By supporting businesses effectively, insurers can evidence the scope of our expertise which will boost customer retention as well as facilitating trade for our customers. Through real-time intelligence on specific buyers, sectors and wider markets, credit insurers can support businesses to identify growth opportunities and manage risk, helping them to succeed. And despite rising insolvencies, early warnings and claim pay outs can protect customers from the impact of non-payment should the worst happen.

If the last year has taught us anything, it’s that nobody can accurately predict just what the future holds. For trade credit insurers, now is the time for us as an industry to support businesses, building a solid foundation for growth throughout 2022 and beyond.

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