Atradius forecast that the Russia-Ukraine conflict will have a negative impact on world growth due to the increase in commodity and energy prices. They have reduced their growth estimate for 2022 by 0.7 to 3.4% and by 0.4 to 3.2% in 2023. These forecasts are subject to a high level of uncertainty. The costs of commodities such as wheat, barley, vegetable oils and base metals are also set to rise significantly. Global inflation is expected to rise leading to central banks tightening monetary policy. The central banks in the US and UK have already increased interest rates.
Read more keyboard_arrow_rightAn article published in DBRS Morningstar states that Credit Insurance companies can expect to see increased claims on Russian buyers. Russian companies may fail to transfer funds to foreign suppliers due to economic sanctions and Russia’s exclusion from the SWIFT payment transfer system. War exclusions may limit claims on Ukrainian buyers but should not apply to Russia as the conflict is not within Russian borders.
Credit insurers have taken steps to limit their exposure in Russia but will expect claims in respect of goods already supplied.
Read more keyboard_arrow_rightRisk Underwriter Darren Newman has published a review of the Construction Sector. Demand has been strong as lockdown was eased however rising material and labour costs and supply chain shortages have held back growth. The Russia / Ukraine war has led to increases in the price of energy and shortages of some goods.
The end of Government support measures such as the furlough scheme and tax breaks has led to an increase in insolvencies. In February 2022 31 construction companies went into Administration, a record for 2 years. Notably Midas Group went into Administration owing £22m to its creditors.
Read more keyboard_arrow_rightLeading corporate recovery experts Begbies Traynor have published research showing the number of UK companies in ‘Critical Financial distress’ had increased 19% on the same period in the previous year. County Court Judgements were up 157% compared to the same quarter in the previous year, with March having seen the highest number of CCJ’s in one month. Julie Palmer, a partner at Begbies Traynor said “The critical distress and CCJ data are likely predictors of a wave of insolvencies coming – it’s just a case of when the dam holding it back finally bursts’
Read more keyboard_arrow_rightAt Airmic Conference in June we’re looking forward to showcasing our latest solutions, including demonstrating our new Trade Credit Quantified risk and analytics model, all designed to support our clients’ resilience and competitive advantage.
Our model analyses clients' trade receivables to provide bespoke probability and loss default forecasting for their portfolio.
Leading Credit Insurance Company and Surety bond provider have been part of the Allianz Group since 2018 and have rebranded to be called Allianz-Trade. In the UK the company dates back to 1918 when they were known as Trade Indemnity when they were bought by SFAC of France who later went on to become Euler Hermes.
Read more keyboard_arrow_rightThere were 4,896 (seasonally adjusted) company insolvencies in England and Wales during the first quarter of 2022. This was an increase of 6% from the previous quarter and an increase of 112% compared to the same period last year. From the start of the coronavirus pandemic until mid-2021, numbers of company insolvencies were low when compared with pre-pandemic levels. This is likely to have been driven in part by Government fiscal measures that were put in place to support businesses.
Read more keyboard_arrow_rightIf you’d like to discuss these topics further, please do not hesitate to contact me.
