Over two-thirds (69%) of UK businesses expect to increase their dependency on exports over the next five years but many are ill-prepared to protect themselves against the risks they will encounter, according to a report released by AIG in the UK, Trade & Export Finance Ltd and The Institute of Export (IOE).
Findings show that risk related to non-payment of goods & services is UK exporters’ biggest concern, cited by 42% of respondents. However, only 37% of companies purchase trade credit insurance (down from 40% in 2013 and 53% in 2012), while 49% of all companies rely on open account payment, according to the International Trade Survey 2014.
The report also reveals that 70% of respondents are unaware of the concept of a single multinational insurance programme to cover their operations across multiple locations.
Will Clark, head of Trade Credit at AIG in the UK, said: “Business confidence in the UK is rising – 72% of companies are more optimistic about prospects in 2014 than in 2013 (up from 59% 12 months ago). However, awareness of the increasing range of risks – political, economic and regulatory to name just a few – posed by entering into new markets, and how best to protect against them, appears to be going in the opposite direction.”
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