What is the Trade Credit Reinsurance Scheme?
The Trade Credit Reinsurance Scheme, led by the Department for
Business, Energy and Industrial Strategy, will temporarily reinsure
the credit risks of business-to-business transactions covered by
Trade Credit Insurance in the UK. The government has committed to
provide a guarantees of up to £10 billion to the Scheme.
The Trade Credit Reinsurance Scheme launched on 4 June 2020 is
to be available on a temporary basis for nine months backdated to 1
April 2020 and running to 31 December 2020, with the potential for
extension if required.
Why is the Scheme required?
Trade credit insurance underwrites an estimated £350
billion of economic activity of more than 630,000 businesses in the
UK each year and protects companies from the risk that their
customers become insolvent before paying for goods or services. It
is a vital cog in the economy, allowing businesses to trade with
each other with confidence.
