Bluefin chief sees signs that insurers' appetite for credit risk has returned

Bluefin's credit insurance division, which is based in Cleakheaton, believes that insurers' appetite for credit risk appears to have returned during the first quarter of 2010.

It said this is an encouraging sign for companies and may help to safeguard the flow of trade and export within the UK and globally.

Credit insurance is a form of insurance that provides protection if a business is unable to pay its debts.

Stuart Reid, chief executive of Bluefin Insurance Services, said: "The message that needs to be relayed to businesses all over the country is that cover is increasingly available again.

"The first quarter is demonstrating grounds for optimism – the return of risk appetite is a good barometer of a return to health and an indicator that we may be entering a period of greater stability."

He added that there would be a large increase of credit insurance business written this year, with one large insurer claiming it has written half a billion pounds of cover in January alone.

Credit insurers paid out vast amounts in claims during 2009.

Figures from the Association of British Insurers (ABI) show that in the third quarter of 2009, the total paid out by trade credit insurers was a record 125m. This was an increase from 38m in the same period in 2008, which is a 227 per cent increase year on year.

Insurers took stringent measures during 2008 and 2009 to reduce their risk profiles by avoiding sensitive exposures, tightening their procedures and, in extreme cases, cancelling policies.

The dramatic drop in available cover during 2009 and the resulting rising premiums meant that many companies were unable to renew their policies, leaving them exposed in a harsh environment..

The Government Top Up Scheme supplied companies with much needed support, by providing "top-up" credit insurance cover for businesses, but the scheme ended at the end of last year.

Although the scheme helped many businesses through this difficult period, it failed to offer help to those who had had their credit insurance cancelled completely, meaning a number of companies were left exposed.

"As we see signs of an economic recovery, companies should start finding it easier to get this important protection," said Mr Reid. "It gives real peace of mind in a still uncertain world."

Bluefin has over 2,500 employees based at 80 locations across the UK.