Print and paper is one of country’s worst sectors for bad debt

Data from National Credit Insurance (NCI), which brokers around 60-65% of the brokered credit insurance policies in Australia and New Zealand, shows that print and paper is only outstripped by the electrical sector and the building industry in terms of the value of claims.

NCI, which has represented many paper merchants and print groups, received 29 claims from the print and paper industry in 2011, totalling $10.7 million of bad debt.

Claims from companies in the electrical sector, which supplies the depressed construction industry, added up to $18.7 million, while building & hardware claims amounted to $13.8 million.

However, when compared with print & paper, there were a far great number of individual claims in these other sectors, with 170 in electrical and 176 in building.

The significant risk of exposure in print & paper is bad news for companies trying to secure credit insurance, said NCI managing director Kirk Cheesman.

“Over the past five years, credit insurance has not made money out of the print and paper industry.

“Overall, it has been a loss-making industry for insurers due to the ongoing number of bad debts, so the insurers over the past year have been telling us that suppliers in the print and paper industry have to take more risk themselves, share in the risk profile and pay more in premiums,” he added.

Cheesman said it has got so bad that at least one insurer has told him they will not support print and paper clients any more.

Read more about the state of credit in the printing industry in last month’s analysis on bad debt.

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