Slowdown woes: Trade credit insurance claims rise 38%, premiums jump 14%

The insurers feel that various initiatives taken by the government such as recapitalisation of PSBs and their mergers will boost the liquidity situation in the market

Slowdown in the economy has adversely impacted the trade credit insurance segment of general insurers. 

This is because claims in this segment have seen a 38 per cent year-on-year rise in FY19 while the premium growth was only 14 per cent during the same period.

Trade credit insurance covers a seller against the risk of non-payment by its customers arising due to wilful default or insolvency. The repaying capability of the customer depends on various macro and micro economic factors.

“During the last few quarters, we have witnessed a spurt in claims, primarily due to stress in terms of liquidity in certain segments,”