Insurance is an essential part of all business operations but can be confusing. But with expert advice and knowledge on hand, Compare Credit Insurance (CCI) can help guide you to the best solutions for you and your timber operations.
Credit Risk in the UK timber trade remains elevated, as a consequence of the construction industry facing a number of challenges. Low profit margins, fixed price contracts, fluctuating material costs, and high geopolitical risk are all factors weighing on confidence across the sector. Insolvencies in construction remain at historically high levels, placing greater strain on cash flow and increasing the risk of bad debt.
Adding to the pressure, tighter credit terms from suppliers and banks have left many timber businesses carrying more of the risk themselves. When a buyer fails to pay, it’s not just a loss of revenue—it’s often a loss of the profit margin on multiple deals. With thin margins and high exposure to trade credit risk, even a single bad debt can cause significant disruption.
Atradius, one of the UK’s leading Credit Insurance underwriters recognise the risk’s associated with the industry in the current climate but have confidence in the sector. “It’s been a turbulent couple of years for the timber industry. Demand/supply imbalance during the COVID-19 pandemic initially drove significant timber price inflation. Interest rates and the associated cost of living pressures drove a slowdown in the House building and Repair Maintenance & Improvement (RMI) markets. This resulted in deflationary pressure and the associated squeeze on profit margins.
Entering 2025 it’s not all doom and gloom though – interest rates are reducing, opening up spending on new developments and RMI projects. The current government’s housing targets offer a fantastic opportunity for demand to increase, and all this sits against the backdrop of the favourable weather we’ve seen across the UK during the Spring. Independent bodies are forecasting growth in the second half of 2025 and beyond, and we at Atradius agree that there’s a real chance for these factors to come together and support improved performance across the year.”
Trade credit insurance is a vital tool, it protects your receivables, giving you confidence to trade more securely and even expand into new markets with the assurance that you’re covered if a customer fails to pay. Credit insurers also provide ongoing risk insight, helping you monitor the financial health of your customers – something particularly valuable in a sector where relationships can mask underlying issues.
The credit insurance market includes 14 active insurers, several of which are recognised as timber sector specialists. These insurers employ risk underwriters with deep industry knowledge and a clear understanding of your customers and trading environment. At Compare Credit Insurance, we maintain strategic relationships with all major providers. Our priority is to match your business with the most suitable insurer—securing the best possible terms and the highest level of cover tailored to your needs.
Now is a smart time to review your credit risk strategy. With insurer appetite still strong and policies flexible enough to suit a range of business sizes, credit insurance is not just for the big players. Whether you’re a sawmill, importer, or merchant, protecting your sales ledger could be the key to staying competitive and resilient in a challenging year ahead.
For tailored credit insurance solutions that safeguard your business against bad debts and insolvencies, visit: www.comparecreditinsurance.co.uk
