ABI has found that the value of the average claim made has jumped up by over 200%, to just over £67,000, influenced by the collapse of Thomas Cook.

In the third quarter of 2019, the average bad debt claim paid by trade credit insurers, covering UK domestic and export markets was £67,300, the highest ever recorded, and up 228% on the previous quarter.

In the same period, the value of new claims received leapt to £271 million, from £82 million in the previous quarter. This was a record-breaking quarterly figure, nearly double the previous high of £137 million in quarter 1, 2009, and largely reflected the demise of Thomas Cook.

Graham Walsh, ABI’s policy adviser, General Insurance, said: “The risk of company failure is continuing to weigh heavily across all business sectors. A prolonged period of economic uncertainty means that businesses continue to face a challenging trading environment, so It is not surprising that there is greater focus on the benefits of trade credit insurance.

“Customers increasingly rely on the accurate trading information provided by insurers to help inform their decisions, as well as the payment protection underpinning their policy. Firms will want to approach 2020 with optimism, but need to be ready for, and protected against, the risk of bad debts.”