Credit: Insurance

Treasury written question – answered on 2nd April 2019.

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Photo of Lord Allen of Kensington Lord Allen of Kensington Labour

To ask Her Majesty's Government what assessment they have made of the likely impact on the viability of high streets in the UK of credit insurers reducing their cover for some high street retailers.

Photo of Lord Allen of Kensington Lord Allen of Kensington Labour

To ask Her Majesty's Government what assessment they have made of the impact on the UK supply chain to high street retailers of the lack of credit insurance cover available for such retailers.

Photo of Lord Allen of Kensington Lord Allen of Kensington Labour

To ask Her Majesty's Government what assessment they have made of the credit insurance market in the UK; and what steps they plan to take to improve the level of cover available for suppliers to the retail sector.

Photo of Lord Allen of Kensington Lord Allen of Kensington Labour

To ask Her Majesty's Government what plans they have to provide support to suppliers who may suffer losses as a result of being unable to obtain credit insurance cover.

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

Government actively monitors the economy, and is aware of problems and consequent difficulty some retailers are facing in accessing credit insurance. Insurers base the level of cover they provide on their assessment of the credit risk, which is often dependent on the specific dynamics of certain sectors. Market trends in the retail sector, and challenging market conditions facing the retailers, have led some insurers to reduce their exposure.

The underwriting of insurance risks – including credit risks – is a commercial decision, and Government does not prescribe the terms and conditions insurance companies set when offering insurance. This is important to the proper functioning of the economy.

However, Government is clear that it wants all types of retail to thrive now and in the future, and wants to support the sector as it responds to change. A package of measures to support the high street was announced at Budget 2018. The Government has regular engagement with financial services providers, including on their plans to support business customers.

Other financial services products are also available to support businesses in lieu of credit insurance, for example from banks.

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