British insurers are talking to the government about a backstop for trade credit insurance to support business supply chains hit by the coronavirus pandemic, an industry trade body said.
States such as France, Germany and the Netherlands are giving guarantees to credit insurers in an attempt to keep coronavirus-hit companies afloat, as some firms cut cover for trade in the European Union.
"We are discussing with the government the scope for temporary state support to ensure that businesses can continue to obtain cover that meets their needs," the Association of British Insurers (ABI) said in an emailed statement on Monday.
Trade credit insurance covers the risk of non-payment if a firm's customers become insolvent.
The ABI said it had proposed a reinsurance scheme which "would see insurers continuing to offer cover, with limited reduction in credit limits to customers, with the government acting as a reinsurer of last resort."
British business secretary Alok Sharma held talks with insurance industry executives, including from the ABI and the British Insurance Brokers' Association, about the plan last week, Sky News reported on Monday.
Britain has already extended its government export insurance scheme to a broader range of countries, as commercial insurers pull out.
For example Tradelock, a unit of trade credit insurer Euler Hermes focusing on British SMEs, has stopped offering cover to new customers.
"We have temporarily stopped onboarding of new customers while we make changes to the platform in the current economic environment," a Euler Hermes spokesman said. (Reuters)