Insurance

Sector Payment Analysis: Insurance

This comprehensive evaluation seeks to analyse the prevailing payment behaviour within the Insurance sector, drawing upon a dataset of 186 companies. The data indicates a highly efficient payment culture, characterised by swift settlement periods that outperform many broader industry benchmarks. The central tendency metrics depict a stable environment; the average payment time stands at 25.3 days, whilst the median is slightly lower at 23 days. This close alignment between the mean and the median suggests that the data is not excessively skewed by extreme outliers, indicating a consistent standard of practice across the sector. With a standard deviation of 14.1 days, the variance in payment practices is relatively contained, suggesting that credit risk professionals can reasonably predict cash flow patterns when engaging with this industry.

A detailed examination of the distribution reveals that the sector is heavily skewed in favour of prompt settlement. Amongst the companies surveyed, a commanding majority of 135 entities (72.6%) settle their invoices within the 0-30 day window, which is categorised as 'Fast'. Furthermore, the quartile analysis helps to organise expectations regarding standard terms; the interquartile range sits between 15 days (25th percentile) and 31 days (75th percentile). Consequently, any supplier waiting longer than a month for payment is experiencing a delay that is statistically atypical for this market. It is important to realise that only a minor fraction of the sector—specifically 8.1%—falls into the 46-60 day bracket, further reinforcing the norm of prompt liquidity.

Despite the broadly positive trends, credit controllers must remain vigilant regarding the 20% of payments classified as 'late'. Whilst the majority of companies pay swiftly, the presence of outliers necessitates careful risk monitoring. The data identifies a sharp contrast at the extremes: the fastest payer settles in a mere 3 days, yet the slowest payer extends to 96 days. There are two critical outliers falling into the 90+ day category, representing 1.1% of the sample. Although this is a small figure, it highlights that severe delinquency can occur. Companies specialising in risk mitigation should note that while 78.6% of invoices are cleared within 30 days, the 6.1% of payments dragging beyond 60 days represent the primary area of concern for working capital management.

Geographically, the commercial activity is heavily centred in the south of the United Kingdom, with London (95 companies) and the South East (41 companies) accounting for the vast majority of the dataset. This regional concentration may influence the payment culture, reflecting the liquidity typically found in these major economic hubs. In summary, the Insurance sector demonstrates a robust payment profile. The evidence suggests that suppliers can generally expect settlement within a calendar month, provided they avoid the small minority of poor performers. Stakeholders should view this sector favourably, as the data reflects a disciplined approach to financial obligations.