Lloyd’s broker Heath Lambert is to expand its credit risks team in order to meet the growing demand over the last 12 months.
Since last year, the broker says new client business has risen by 20% as a result of the turbulent credit markets and consumer spending. This has effectively put extra strains on the team, which is the reason why it is now expanding.
Martin Holland, Managing Director of Credit and Surety division for Heath Lambert, said: “There have been more [credit risk] policies underwritten over the last 12 months, as there is a demand for products when the economy slows down. We insure companies against business failures, which is why the claims are so big right now.
Due to expand with immediate effect, the new employees will continue to deal with credit risks that will, in essence, take some of the pressure off the team.
According to Holland, manufacturers and suppliers of services are Heath Lambert’s main clients as the services that it provides can potentially result in bad debts.
In order to meet this growing demand over the next few months, other brokers are planning to follow suit.
The financial services sector has been hit hard by the credit crunch and in order to try and overcome the credit problem, banks such as Merrill Lynch, JP Morgan, Citigroup and Lehman Brothers have appointed Chief Risk Officers.
Advising the senior leadership team on risk strategy and policy, the CRO’s role is to oversee risk management for the company.
Stemming from a long period of low interest rates, some the banks’ problems escalated when consumers started to borrow beyond their means. While interest rates stayed low there was not a problem, but as borrowing costs started to rise many consumers found it difficult to keep up with their loan and mortgage payments.
Now with the expansion of these credit risks teams and CROs, it is hoped firms will be better prepared for any sudden changes in the financial market.
