Sam Ashdown, Risk Underwriting Manager at Coface UK & Ireland, leads the Mid-Market Team’s underwriting division for light industry and services. With extensive experience and a passion for cultivating strong client relationships, Sam provides valuable insights into the evolving landscape of risk management and the specific challenges facing light industry sectors in the UK today.
1.Tell us about your background and your role at Coface.
I began my underwriting career in 2017, right after university. I joined Coface in June 2023 as a Programme Risk Manager and took on my current role in May. As the head of the underwriting team for light industry and services, I manage risk appetite in these sectors and prioritise putting our clients first.
A key focus of my new role is to strengthen relationships with our broker and client networks while emphasising the expertise of our team. By putting our specialists at the forefront, we aim to enhance collaboration and deliver even greater value.
2.What sectors do your team cover and how do you keep up-to-date with the latest developments?
My team of four experienced underwriters manages sectors outside of construction, metals, and manufacturing. We focus on industries such as food, hospitality, retail, banking, IT, and telecoms. There is some overlap with sectors like automotive, where we handle the retail side, while our colleagues oversee manufacturing.
We gather business information from a variety of sources, updated hourly, daily, and weekly. As a team, we dedicate a significant part of the week to researching sector developments, ensuring we're informed about key trends and risks throughout the supply chain. We need to be very aware of what happens at all points through the supply chain, especially where these are highly integrated because an issue in one area could start a domino effect.
3.Roughly what proportion of UK businesses operate in these light industry sectors, and do they share any common characteristics?
There were about 5.5 million privately owned businesses in the UK in 2023 and I estimate that about 50-55% fall into the light industries and services category.
In terms of size, 99.9% of UK businesses are SMEs and a big proportion operate within the food, retail, and hospitality space. Many well-established firms, including 5th and 6th generation farmers, operate in these sectors. However, these sectors also attract more start-ups due to lower barriers to entry compared to manufacturing. At the same time, a high proportion of businesses fail within the first three years which is usually due to cashflow problems. This means turnover is generally quite high and circumstances can shift rapidly.
4.What are the biggest trade risks currently facing these businesses and are they different from other sectors?
The biggest risks are universal, like interest rates and inflation. What sets light industry sectors apart is the degree of price fluctuation and how quickly businesses are exposed to rising input costs outside their control. For example, the war in Russia and Ukraine had an immediate impact on food, agriculture and retail businesses where some costs like energy and fertiliser went through the roof. While we know cost inflation has fallen back recently, it remains a real challenge.
The cost-of-living crisis continues to disproportionately impact these sectors because they are more dependent on consumers who generally have less disposable income. Meanwhile, supermarket price wars have picked up as they compete for price-conscious shoppers. While supermarkets can better absorb losses on certain products, many businesses in the sector no longer have the financial reserves to do so. Eight years ago, agrifood businesses could endure a few difficult years, but now many fail after just one bad year.
It’s been a bit of a perfect storm in recent years and programmes like Clarkson’s Farm have done a good job of highlighting issues like fertiliser prices and the disconnect between these input costs and market prices for farm produce.
5.Can we be optimistic about the prospects for light industry in the next year?
We have a new Government with a majority that means they should be in power for the next five years and that’s brought a level of stability that I don’t think we’ve seen for some time.
It’s been especially difficult for farmers because different prime ministers have moved the goalposts on things like net zero or the replacement for the Common Agricultural Policy (CAP). Of course, it’s still a young administration and we don’t fully understand all the things they are going to do yet but the one thing that businesses undoubtedly need and want is certainty and the confidence to trade.
6.What steps can light industry businesses take to navigate risks?
The main thing underwriters want to see is how a business manages its cash and I think this should be the priority for every business, large and small. There are lots of different ways to optimise cashflow including forecasting, managing inventory, and credit control but I think that trade credit insurance can be an important part of any business’s strategy.
Beyond that, there’s a growing need for better business information, especially for exporters. I don’t just mean due diligence and credit checks for buyers but also assessing the financial stability of suppliers. The disruption caused by events like the pandemic shows why it’s important to understand the strengths and weaknesses of your supply chain.
7.How is the underwriting team able to support Coface clients and help them trade with confidence?
We have the expertise and global network to support export trade, particularly in open sectors like food and services. Credit limit applications on UK companies are handled by the UK underwriting team, regardless of the exporter's location. For example, it could be a Norwegian fish company selling to a processor in Hull or a Dutch pork producer with a buyer in the Midlands—our ‘close to the risk’ model always applies. This approach gives our UKI underwriters the broader perspective needed to effectively support clients in these sectors.
Getting out from behind a computer to visit our clients is also important. On a recent visit to meet a new client, they were a bit nervous about our view on a number of risks, but we were able to talk about the buyers in more detail and give them some certainty. That face-to-face collaborative approach enabled us to make more informed decisions and was a good outcome for the client who could see that we’re doing our best to advocate for their business.
8.What do you enjoy most about working in the Coface underwriting team?
What makes the job interesting and enjoyable for me is working to build enduring partnerships with our clients and brokers. We want these to last far longer than one or two renewal cycles. Part of my brief when I took on this role was to enhance our relationships with clients and brokers and there’s the expectation that the underwriting team will get out and about more. That suits me as it’s the part of the job I like best.
9.What do you do to relax outside of work?
I enjoy watching sports, especially archery, a sport I competed in during my teenage years as a national champion. These days, my free time is mostly spent with my 3-year-old twin daughters, who are my greatest motivation in life.
Coface’s underwriting team is committed to helping clients navigate risks and trade with confidence. If you want to learn more about how our expertise can support your business, reach out to our team for personalised assistance.