The next one to two years could see expectations of a gradual increase in business interruption-related claims among SMEs, from supply chain disruption.
That was what Coface Head of Enhanced Information Centre, Claims and Debt Collection, APAC Sam Lee told Asia Insurance Review.
“Prolonged instability linked to the Middle East conflict is already affecting shipping routes, insurance and freight costs, transit times and input availability,” said Ms Lee.
“For SMEs that rely on imported components, energy intensive inputs, or just in time procurement, these disruptions can quickly translate into cash flow stress, delayed deliveries and ultimately payment defaults.”
From a trade credit claims perspective, she foresees "an increase in claims triggered by a combination of extended payment delays, buyer insolvencies and contractual disputes where suppliers are unable to meet delivery terms due to upstream disruptions”.
“SMEs are particularly exposed because they tend to have less diversified supplier bases, weaker bargaining power, and limited balance sheet resilience compared with larger corporates,” Ms Lee added.
“While we do not foresee a systemic shock, claims from SME are likely to become more frequent and driven by cash flow stress and depend on how prolonged the Middle East situation will be.”