By Patrick Avenell
SYDNEY, NSW: QBE Insurance Australia will continue to provide trade credit insurance for the appliance and consumer electronics retail sectors, though the group is continuously monitoring the risks associated with such premiums.
In the week following Clive Peeters entering administration, there has been considerable speculation about whether insurance companies would continue to provide cover for vendors supplying product on credit, with fears within some retail groups that should insurance not be provided, stock will only be furnished with upfront payment. This issue was also raised last year, when the Truscotts chain of consumer electronics stores collapsed.
QBE group general manager, credit and surety, Richard Wulff exclusively told Current.com.au that despite fears that the economy could worsen, and that other retail groups may be facing significantly difficult times, it will continue to provide insurance.
“QBE is firmly committed to this product,” said Wulff. “During the Global Financial Crisis, we have taken the decision to support our clients with trade credit insurance, a decision agreed at the highest level within the QBE Group.”
Although QBE has no plans to change this position in the foreseeable future. Retailers and suppliers should note that it is monitoring the associated risks of these policies closely.
“The industry can expect that QBE will continue to pay close attention to the risk. That means that we will continue to support our policy holders, whilst looking to steer them away from buyers that we believe we not be able to pay their bills.”
Wulff further noted that this close watch on risks was not a departure from existing or practices.
Premiums on retail trade credit insurance policies vary depending on the client’s (that is, the vendor’s) business turnover, the industry sector and how much risk clients want on their books. Current.com.au understands that premiums generally vary from between 0.1 and 1.5 per cent of the client’s business turnover.