The government and the Association of British Insurers
(ABI) have
today (Wednesday 26 May) announced that the temporary Trade
Credit Reinsurance (TCR) scheme will close on 30
June as planned.
The scheme has directly benefitted over half a million
businesses, providing certainty to firms across the UK and
safeguarding jobs. It protected more than £575 billion of
business turnover by providing around £210 billion in insurance
cover.
TCR was designed as
a temporary solution to companies struggling to get insurance
cover for transactions because of the pandemic. It is now ending
in the context of a positive outlook for economic recovery in
2021, appetite for new business among participating insurers and
the continued success of the vaccine rollout.
Participating insurers have indicated to the government that the
scheme is no longer required and they are keen to take back full
underwriting control.
The government and participating insurers will continue to work
together to ensure there is a smooth transition to the private
sector resuming its normal role of providing cover, as agreed
with the ABI
and participating insurers.
Business Minister said:
The Trade Credit Reinsurance scheme has been 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.
The scheme 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.
The scheme was a vital and necessary intervention by the
government in response to the coronavirus (COVID-19) pandemic, providing certainty to
businesses across the UK and protecting jobs. The scheme has
offered eligible insurers a government-backed reinsurance
agreement, covering insurance offered on business transactions
within the UK and overseas.
This enabled trade, which required insurance but was unable to
get it due to the uncertainty caused by the pandemic, to continue
flowing.
Huw Evans, Director General of the ABI, said:
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.
, Economic
Secretary to the Treasury, said:
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.
It is vital that insurers and businesses proactively continue to
engage with one another during this period to ensure any
necessary revisions to cover are minimised.
Whilst the government scheme is being wound down, 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
Similarly, during this period the government has committed in the
joint statement 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
Following the conclusion of the scheme, the government will begin
work on the review of the Trade Credit Insurance market to ensure
that it is leading to fair outcomes for consumers.
Read the joint statement
in full.
