The last few months of 2022 are fast approaching and we remain challenged by labour shortages, supply chain issues, a weakening NZ dollar and geopolitical events.
It is hard not to be concerned about the impacts of inflation, rising interest rates and restricted bank lending and next year’s elections and what additional pressures households and businesses will face. Our agribusiness sector is also in the spotlight due to widespread issues with our kiwifruit and the quality of our exports which will impact grower returns significantly.
Insolvency activity is increasing as are IRD driven wind up applications. McDonald Vague reported company insolvencies jumped in July 2022 to levels not seen since pre pandemic – court appointments also doubled month on month compared to June 22.
On the back of this, new enquiries for trade credit insurance are also increasing, suggesting a shift in sentiment in NZ businesses. There is more concern around debtor non-payment and a focus on protecting a debtor book. This contrasts significantly to the last 18 months where debtor days were exceptionally good. We are preparing for a slow down and expect more difficulty in collecting debts.
Our market is still very good and we are able to place new risk and we are getting good outcomes on renewals. We are in a period of calm and it is a good time to lock in rates on multi year policies, preparing for volatile times on the horizon.