Atradius calls for more transparency


Atradius calls for more transparency

Microscope contributor

Resellers have been advised to put their suspicions to one side when a credit insurer comes knocking for fresh financial information or management data according to Atradius, one of the big three underwriters in the UK channel.

The major players in the sector have been hit by a rise in insurance claims and want to keep on top of potentially rapid changes to customers’ businesses in the current climate.

However this is not always possible, reckons Shaun Purrington, Atradius regional director for the commercial space in the UK and Ireland, because companies tend to be suspicious of insurers’ motives.

“We are generally finding that when a credit insurer asks for the latest management accounts there is a reticence to release that data, we are asking for more transparency,” he told MicroScope.

If one criticism has been leveled at credit insurers in the past it is that they often got nervous about an entire sector when one major company was made insolvent, a point previously acknowledged by those in distributors' credit departments.

This was certainly the case in 2006 and 2007 in the e-tail and system builder channels following some high profile company failures.

Nick Tiltman, credit director at Computer 2000 said the insurers were looking at industry sectors as a whole but were now “being very specific about understanding the individual customer and the risk”.

Last week Amlin withdrew from the credit insurance sector and yesterday Euler Hermes issued a profit warning after being hit by the collapse of Woolworths with debts of £385m and a general rise in insurance claims.

Purrington at Atradius agreed “there is a market correction in terms of risk appetite and you’d expect that as the economy goes into a tailspin but let’s put that into perspective – underwriters still insure in excess of £330bn of UK trade.”

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