The Trade Credit Reinsurance Scheme, which offered to pay temporary support to businesses through trade credit insurers, will close on 30 June, 2021, as planned.
The Scheme, which started in July 2020 and was delivered through a reinsurance agreement, intended to minimise the reduction in economic activity from the abrupt withdrawal of trade credit insurance (TCI) by guaranteeing that insurers maintained a consistent level of cover for businesses operating across the UK during the COVID-19 pandemic.
Benefitting over half a million businesses, the Scheme provides certainty to firms across the UK and safeguarding jobs. It protected more than £575 billion of business turnover by providing around £210 billion in insurance cover.
The announcement stated that now is the right time to wind down the scheme following the continued success of the coronavirus vaccine rollout, the positive outlook for economic recovery in 2021, and the success of the Scheme in maintaining cover in the credit insurance markets.
The expectation is that following the end of the scheme, most businesses will see their insurance cover being maintained. The government and insurers will continue to collaborate and review the ongoing operation of the TCI market, following the Schemes closure.
