Credit insurance in a global recession: Composure and long-term thinking
While organisations continue to deal with the COVID-19 global health emergency and the short-term implications, thoughts are inevitably turning to focus on the longer-term impact. For many businesses, liquidity, trade and getting supply chains moving will be at the top of their priorities once the peak of the crisis starts to recede. The role that the credit insurance industry can play in facilitating those objectives will be critical.
The challenge, however, is that at the very time businesses need the products and innovation offered by insurers, capacity will inevitably be tightening in response to the deteriorating economic conditions.
Given the volume of global trade underwritten by credit insurers, their role in getting supply chains flowing will be imperative which is why we are starting to see governments providing capital support to the industry.
The economic and market volatility we see today will eventually stabilise and credit insurance will remain important for trade. Our view is that the present situation demands a reflection point for both insurers and clients to think long-term in their provision and use of credit insurance solutions.