Trade credit insurers paid out a record amount in claims during the third quarter of 2009, figures from the Association of British Insurers reveal.

ABI stats show that the total amount paid in claims was £125m in the third quarter, a rise of £38m compared to the same three-month period in 2008 and an annual increase of 227 per cent.

The ABI said this was a reflection of the global recession and the liquidity crisis affecting UK businesses. The trade body added that the latest figures demonstrate the value that trade credit insurers add to businesses which are facing challenging times during the recession. Nick Starling, the ABI’s director of general insurance and health, said: "This year has seen a record number of claims and payouts by insurers, with trade credit insurers continuing to insure well-managed businesses.

"He added: "This provides reassurance to clients that they could cope if a company they are supplying to gets into difficulty, especially vital for trading in a recession. Trade credit insurance often makes the difference between a good business staying afloat or going under.

"The increase in claims paid is due to the record volumes of overdue or unpaid invoices notified to credit insurers in the second half of 2008 and the first quarter of 2009. There is a lag between notification of an unpaid invoice and a claim, so these invoices have since translated into defaults and therefore claims paid out to businesses.