Help clients with business as usual, in an unusual way.
We have all heard plenty about how bleak it is looking, with the necessary shutdowns, lifting of restrictions and the second round of uncertainty. It is prudent now to prepare for the worst, but hope for the best. While everybody tries to break free of survival mode, remember that perhaps the fat is gone, but muscle and backbone remain. The present situation is not the final destination. The economic impact may well be an opportunity for the fast versus the slow, rather than the big versus the small.
So who is doing it the toughest? Changes are developing rapidly. Our trade indemnity insurer, National Credit Insurance, shows their experience.
Claims Number: by industry
Claims Value: by industry
Owing to this and the poor immediate outlook, one of Australia’s major insurance underwriters, QBE, took a first round of action to manage their exposure. Insurance credit limits were cut by 25% for the industry sectors most impacted. #1 is Building & Construction. MPS anticipates the further impact will be a need to supply greater detail for new credit applications, more reviews of existing client limits, a review of forward limit needs, increased requests for repayment plans and a greater need for dialogue with clients in this area. We also understand that Agents taking credit risk on clients may not be able to get sufficient or any insurance cover.
There will also be an impact from Statutory change. Demand thresholds have increased from $2k to $20k. Legal response from 21days to 6months and Directors are being relieved from personal liability while trading insolvent.
A second level of action was announced by QBE. Insurance cover for 5000 individual businesses was withdrawn. Five of these effected MPS directly.
In this temporary economic upset we are by no means in this alone and events with many similar economic effects have occurred before.
MPS will stay in touch with our Agency Business Partners to help guide through these developments and support efforts to help your clients with business as usual, in an unusual way.
