UK trade credit premiums are likely to be increased by at least 9-10% in light of the global economic slowdown and the potential recession on the horizon. This week's stock market turmoil has only worsened concerns.
Speaking at the Coface Country Risk conference in Paris this week, Coface UK announced it was prepared to increase its premiums by 10%. It is a move that although insurers may be reluctant to announce, that will be likely to be adopted by across the UK trade credit insurance market.
Yet, given the uncertain economic climate, the demand for credit risk products is set to increase over the coming year.
Talking through a global overview of country risk, Coface's chief economist Yves Zlotowski, spoke in more optimistic terms about a "global slowdown”, rather than a “credit crunch” or recession. However, he described a gloomier picture of the economies in the UK, Spain and Ireland, all of which have seen strong economic growth in recent years and now are expected to see a decline. All three economies remain rated A1 by Coface, but have been placed on negative watch.
Yet, Zlotowski predicted relative stability across the rest of Western Europe with Germany and France keeping their A1 rating, and Italy maintaining its A2 rating.
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