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Unsettled outlook for EMEA trade credit insurance market in 2015: Marsh Print E-mail
Tuesday, 16 December 2014

According to a report published by Marsh, the growing number of insolvencies and defaults across Europe, the Middle East, and Africa (EMEA) mean that many companies could see trade credit insurance rates rise in 2015.

Marsh’s Risk Management Research, EMEA Trade Credit Market Update, highlights that although trade credit insurance rates are still falling across the EMEA region, the majority of these reductions are in Western Europe and are being led by larger firms.
According to Marsh’s research, 19% of Marsh’s EMEA clients reported rate increases on renewal in Q2, up from 9% in Q1. These rate increases were particularly acute in Africa, where 92% of Marsh’s clients reported rising rates on renewal in Q2.
Tim Smith, Managing Director in Marsh’s International Trade Credit Practice, commented: “Despite a global fall in consumer demand, the economy is continuing to grow across EMEA. This fragile trading environment means that some businesses are financially over-stretching themselves and, as they look to regain lost ground, may experience cash flow difficulties as a result.
“Rising rates are symptomatic of the trade credit insurance market’s growing unease at the number of insolvencies and defaults across EMEA. While insolvencies and default frequencies have already started to increase, we believe it will take between six to 12 months for the full extent of these incidents to affect trade credit insurance rates and market capacity.
“Claims are also continuing to increase across the board, particularly in Africa and Eastern Europe, and we expect more losses for the remainder of 2014. Insurers are closely monitoring key sectors, such as IT and retail, for signs of history repeating itself and this could lead to higher rates for trade credit insurance in 2015.”

(Source - Marsh Media Release)


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