Andy Johnson, MD of LEW Electrical Distributors and a member of the AWEBB buying group, represented the EDA once again at the Construction Leadership Council’s (CLC) Trade Credit Insurance Group meeting on 30 July 2020.
The Group, chaired by John Newcomb, CEO of BMF, brings together companies from across the construction sector as well as representatives of the Department for Business, Energy and Industrial Strategy, (BEIS), the CBI, and several organisations from the world of insurance.
Working with BEIS, the key aim of the group is to ensure that levels of trade credit insurance are maintained enabling businesses to trade with confidence through these difficult times. A further aim is to raise awareness of the Government’ Trade Credit Insurance Scheme in the construction sector.
BEIS will be measuring the success of the scheme across all industries and KPIs will include the number of insurance companies signing up to the scheme as well as the maintenance of the levels of trade credit insurance in all sectors of the economy.
Margaret Fitzsimons, EDA CEO, was asked to present the findings of the recent research carried out among EDA members and manufactures in July that revealed that to be completed and manufacturer members in July shows that around 25% of wholesalers and 27% of manufacturers rely on Trade Credit insurance but 60% have experienced a withdrawal and 69% have seen a reduction of terms offered by insurers.
While it appears that the construction sector is experiencing some difficulty with insurance companies, BEIS claims that since the announcement of the Scheme on 8 June 2020 the situation has improved in many other sectors.
The Department for Business, Energy and Industrial Strategy is currently going through the process of finalising contracts with insurers with a view to launching the scheme fully on 10th August. At that point they will be able to reveal the names of the insurance companies that have signed up to the scheme. They currently estimate that about 80-85% of Trade Credit Insurance companies will be involved.
Insurance representatives on the Group emphasised that the most important thing a company seeking trade credit insurance can do is to provide good financial and trading information to their insurance companies and to this end they encourage companies to use the CLC’s TCI Guidance Document that sets out a list of the required items that insurers will look for.