Company liquidation figures are generally held as an example of the overall performance of a particular sector or, during a widespread recession, of the economy as a whole.
But they are also closely linked with the number and value of trade credit insurance claims made by suppliers to a company that has gone bust.
When there is not enough money left after company liquidation to pay suppliers for their goods, trade credit insurance pays out the shortfall to ensure they are not left out of pocket.
And in recent years it has done just that, with Datamonitor Financial pointing out how claims have tracked the wider economic cycle.
“According to Association of British Insurers statistics, 2007-10 saw significant increases in the number of claims, with a gradual decline from 2011 onwards,” the analyst reports.
This indicates “that a more stable business environment translates into more stable businesses”.
It is also a sign that company liquidation rates overall may be falling – although high-profile cases like the recent collapse of Phones4U may lead to a one-off surge in trade credit insurance claims this year.
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