Resellers have been advised to put their suspicions to oneside when a credit insurer comes knocking for fresh financial information ormanagement data according to Atradius, one of the big three underwriters in theUKchannel.
The major players in the sector have been hit by a rise in insuranceclaims and want to keep on top of potentially rapid changes to customers’businesses in the current climate.
However this is not always possible, reckons ShaunPurrington, Atradius regional director for the commercial space in the UK and Ireland, becausecompanies tend to be suspicious of insurers’ motives.
“We are generally finding that when a credit insurer asksfor 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 levelled at credit insurers in thepast it is that they often got nervous about an entire sector when one majorcompany was made insolvent, a point previously acknowledged by those in distributors' creditdepartments.
This was certainly the case in 2006 and 2007 in the e-tailand system builder channels following some high profile company failures.
Nick Tiltman, credit director at Computer 2000 said theinsurers were looking at industry sectors as a whole but were now “being veryspecific about understanding the individual customer and the risk”.
Last week Amlin withdrew from the credit insurance sectorand yesterday Euler Hermes issued a profit warning after being hit by thecollapse of Woolworths with debts of £385m and a general rise in insuranceclaims.
Purrington at Atradius agreed “there is a market correctionin 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 excessof £330bn of UKtrade.”
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