Comment on the triggering of Article 50 by Mike Clark Chair of the British Insurance Brokers’ Association
he triggering of Article 50 of The Treaty of Lisbon officially informs the EU of the UK’s intention to withdraw. Unless both sides agree...
...on an extension, the UK and EU then have two years to negotiate a divorce.
Against a background of increased economic uncertainty it’s hardly surprising that more companies are reviewing credit insurance. Following the June 2016 referendum the most immediate challenge for UK corporates has almost certainly resulted from risk associated with a weakened currency.
Many companies hedged forward to guard against excessive swings in sterling, but others failed to take adequate measures. For the latter, a 10% fall against the euro and 20% drop against the dollar has eroded short term cash-flow and longer term profit. The impact on businesses that operate on slim margins is therefore significant.
For others, particularly those manufacturers who export, a weakened pound has presented an opportunity to grow sales. A survey of industry by the CBI reported that optimism amongst UK manufacturers had reached its highest level for two decades. But identifying the winners and losers (overseas customers who can or can’t pay) requires up-to-date market intelligence. Credit insurers hold vast databases of information and offer valuable guidance to those companies want to increase exports.
Trade credit insurance featured in the 2017 BIBA Manifesto which calls on Government to work with us and the trade credit insurance sector in assist UK business in navigating through the issues, changes and uncertainties that EU exit will bring.
Mike Clark is Director and Founder of Credit Risk Solutions Ltd
Visit us here: www.biba.org.uk