The government is to close the £210bn Trade Credit Reinsurance Scheme, set up to offer temporary support to construction firms during the coronavirus pandemic, this summer.
The scheme, delivered through a reinsurance agreement, aimed to minimise the reduction economic activity from the abrupt withdrawal of trade credit insurance during the pandemic by ensuring that insurers maintained a consistent level of cover for businesses operating across the UK during the crisis.
It opened in July 2020 and will now close at the end of this month.
The government said the temporary solution could now close as a result of the appetite for new business among participating insurers and the success of the covid-19 vaccine rollout.
Participating insurers have indicated that the scheme is no longer required and they will take back full underwriting control.
The Construction Leadership Council (CLC) advised construction businesses to engage with brokers and insurers when seeking TCI, while making considerations about both current and future business plans for recovery and growth.
Existing CLC guidance on TCI can be found here and will be reviewed “in due course”.
Huw Evans, director general of the Association of British Insurers (ABI), said: “Insurers were pleased to have worked closely and constructively with the UK government on this temporary scheme. At a time when firms needed extra support during the pandemic, the scheme has helped ensure that businesses remained able to insure against potential risks in their supply chain. The scheme has been an excellent example of how government and the industry can work together on solutions to unprecedented market challenges to ensure the continued availability of insurance.”
