According to a report from Marsh’s London office, “new insurance capacity, increased competition for business among insurers and improved risk management have led to positive developments for buyers of trade credit insurance across most of Europe in 2010, following two extremely challenging years.”
Marsh concluded that the latest data for 2010 shows “trade credit insurance rates are reducing in France, Germany, Italy and the United Kingdom; rates are stable or experiencing minimal increases in Belgium, Denmark, Portugal and The Netherlands; and localized increases are being recorded in Greece, Portugal and Spain. Trade credit cover is also becoming easier to procure, with insurers no longer taking industry sector-wide underwriting decisions.”
Tim Smith, Leader of Marsh’s Trade Credit Practice in Europe, the Middle East and Africa (EMEA), commented: “The trade credit insurance market has been transformed in 2010 with rates falling or stabilizing in most key European markets. Following the recession and the widespread cancellation of cover in certain high-risk industry sectors, insurers are now writing more business and deciding cover on a company-by-company basis.
“As insurers have developed more sophisticated risk assessment techniques, so companies are more willing to share financial information and formalize their business order policies. This both aids insurance procurement and helps companies obtain better terms.
“Demand for trade credit insurance remains strong. Entry to the market by insurers new to the sector has increased capacity and competition for business among trade credit insurers. For companies seeking trade credit insurance, the outlook for the remainder of the year and into 2011 is very encouraging, especially for organizations with strong credit management procedures. ”
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