It has been confirmed that the temporary Trade Credit Reinsurance (TCR) Scheme will close at the end of June. The scheme has helped struggling supply chain firms secure insurance protection during the pandemic.
In a statement, the government and the Association of British Insurers (ABI) confirmed that the scheme will close on 30 June as planned. The TCR Scheme was designed to be a temporary solution for companies struggling to get insurance cover for transactions because of the pandemic.
The TCR scheme has offered eligible insurers a government-backed reinsurance agreement, covering insurance offered on business transactions within the UK and overseas.
The government said that the TCR Scheme has directly benefitted over half a million businesses, but is now ending in the context of a positive outlook for economic recovery this year.
Participating insurers have indicated to the government that they are keen to take back full underwriting control and therefore the scheme is no longer required. The government said it will work with participating insurers to ensure there is a smooth transition to the private sector resuming its normal role of providing cover.
However, Chris Wilford, Head of Financial Services Policy at the Confederation of British Industry (CBI), said: ‘There is growing concern amongst businesses about the future of the trade credit insurance market following the end of the government’s guarantee at the end of June.
‘It is vital that there is clear guidance on what businesses need to do to ensure coverage beyond the end of the TCI guarantee to smooth the transition towards a normalised market. The CBI welcomes the joint statement by the government and insurance industry and will continue to actively engage to find a solution.’
“The closing of this scheme is another step taken on the path to economic recovery. Businesses should share the government’s ‘positive outlook’ as it seems that we are gradually returning to normality.”Nigel Holland