The Art of Protecting Your Business

Features and Benefits

Protects you up to 90% of bad debts suffered.
Protection for your accounts receivable ledger.
Protects against the insolvency or protracted default of your insured customers.
Enhances your business controls.
Our credit monitoring service may help you identify a potential credit risk with one of your customers before it becomes a bad debt.
Allows bad debt provisions to be reduced.
Protects your risk against work in progress/timesheets.
Releases capital for business expansion.
Offers protection on domestic and export debts.
If within 30 days we cannot cover at least 55% of your ledger by value you may cancel with a full refund of any premium paid.

Some reasons why businesses use Debtor Insurance

To reduce the credit risk of trading on unsecured terms of payment.
Even large, apparently safe businesses fail.
Cashflow is a main driver in crippling many small firms each year.

GB Economic Conditions Worsen as Credit Crunch Bites

Government insolvency figures for the second quarter of 2008 begin to reveal the true impact of the economic downturn on businesses across the UK. Liquidations in England and Wales totalled 3689 in the second quarter, the worst showing since the second quarter of 2003, when just over 3,700 liquidations were recorded. In Scotland, figures were better than last year, with a 20% reduction in liquidations in the second quarter (down from 165 to 132). Although figures are smaller still because of the overall size of the Province's economy, Northern Ireland also showed a deterioration in the figures for the second quarter; there, liquidations rose from 38 to 57 in the second quarter.

Interestingly, commercial County Court Judgments as recorded by the Registry Trust, have remained around the same levels as last year at around 50, 000 per quarter. One reason for this more positive statistic could be that creditors are taking different options to obtain payment, and no longer go through the County Court system unless they feel that the CCJ is enforceable i.e. the debtor has the funds to pay up if the judgment is made against them.

The credit crunch, first talked about in the late summer of 2007, has combined with rising fuel and utility prices to create a climate of low consumer and business confidence. Building and property development have suffered the biggest increases in business failures, as credit has dried up in the mortgage market. According to the Centre for Economic and Business Research, new house builds are expected to drop by 20% in 2008, with numerous builders like Bovis, Barrett Developments and Redrow all reporting large layoffs of staff in the last couple of months.

There is more evidence in the market that large companies are lessening the impact of the credit crunch on their own organisations by focusing more time on cash flow management. Some of the large accountancy firms are reporting a "huge surge" in demand for their working capital consultancy. In another recent survey, KPMG reported that 49% of respondent companies with sales turnovers of between 250 million GBP and 20 billion GBP plan to negotiate longer supplier payment terms with their suppliers, and this will undoubtedly lead to weakening cash flow positions down the chain.

As consumers are having to tighten their belts, it is widely expected that non-food retailing will continue to suffer, despite retailers attempting to lure customers back with big sales discounts on the High Street.

London, 18 August, 2008,

Martin Williams

Graydon UK Limited

This insurance is arranged by Lloyds TSB Commercial Finance Limited and underwritten by AIG UK Limited. Lloyds TSB Commercial Finance Limited is an appointed representative of AIG UK Limited. (FSA Register number 202628), The AIG Building, 58 Fenchurch Street, London EC3M 4AB, which is authorised and regulated by the Financial Services Authority. AIG UK Limited is a member company of American International Group, Inc.