The temporary Trade Credit Reinsurance (TCR), created by the government and the Association of British Insurers (ABI), that allowed over half a million businesses to stay afloat, provided certainty to firms across the UK and safeguarded jobs, is now set to come to an end on the 30th of June.
The Trade Credit Reinsurance (TCR), was created as a temporary solution to companies struggling during the challenging COVID-19 times, by providing access to trade credit insurance to cover transactions. The end of the government and the ABI’s scheme suggests that the worst may be over, indicating a positive economic outlook in 2021. TCR had been extended late last year as the COVID-19 situation continued to worsen globally.
TCR protected more than £575 billion of business turnover by providing around £210 billion in insurance cover.
The scheme was described by Business Minister Paul Scully as a:
“A huge success story with the government and insurers working closely together to back more than half a million businesses, protecting jobs and providing confidence through the pandemic. (…) allowed trade to continue flowing despite the uncertainty caused by the pandemic, and it is only right that now our economic outlook has improved and businesses are getting back on their feet, the private sector resumes its role of providing insurance cover. I look forward to continuing to work with insurers to deliver the support which businesses need.”
On the success of TCR, Huw Evans, Director General of the ABI, added:
“Insurers were pleased to have worked closely and constructively with the UK government on this temporary scheme. At a time when firms needed extra support during the pandemic, the scheme has helped ensure that businesses remained able to insure against potential risks in their supply chain. The scheme has been an excellent example of how government and the industry can work together on solutions to unprecedented market challenges to ensure the continued availability of insurance.”
On the support the scheme provided, John Glen, Economic Secretary to the Treasury, stated:
“This scheme has supported millions of jobs at over half a million businesses by giving companies and their supply chains confidence through the pandemic. It has been a significant success, providing nearly £210 billion of cover, and it’s right that trade credit insurance transitions back to the industry now the economy is starting to recover.”
Despite the optimism, it is crucial that the collaboration between the government and insurers remains strong. As a result, insurers have committed in the joint statement between the government and the ABI to:
- continue to work closely with policy holders and their clients to understand their insurance needs, whilst proactively seeking out relevant information to inform underwriting decisions
- give adequate consideration in underwriting decisions to a business’s plans for recovery and prospects for future growth, as well as the impact of the pandemic on different sectors and the ongoing nature of government support
- continue to communicate the rationale behind underwriting decisions transparently and in good time
In an effort of continued collaboration, the government has committed to:
- maintain an open dialogue between insurers and businesses, working collaboratively with both to help ensure the smooth transition of cover back to the private sector
- continue to monitor the levels of insurance cover within the market