Chief Executive Desnos: "No decrease in exposure"
Euler Hermes UK boss Febrice Desnos says his company is receiving 30,000 applications a month for trade credit insurance and there has been no decrease in exposure.
Chief executive Desnos hit back at accusations blanket insurance cover is being withdrawn on entire sectors of the economy, instead stressing Euler Hermes was still ‘judging every firm on its own credit’.
“Euler Hermes continues to respond to applications for credit insurance on an individual basis and every company is judged on its own merits, taking into account analysis of the risks that its clients are taking.
“Euler Hermes UK receives in excess of 30,000 credit limit applications a month and despite the current economic climate is able to positively respond to a large majority of these requests,” Desnos told the Insurance Times.
“Euler Hermes UK have not seen a decrease in its overall exposure, which has continued to grow in 2008 after recording very strong growth in 2007.”
The debate around trade credit insurance – cover for suppliers waiting payment for goods handed over to businesses – has intensified this week with reports that Atradius has withdrawn insurance on at least 12,000 firms in recent weeks.
In addition, members of the Institute for Turnaround claimed credit insurance was being pulled on entire sectors of the economy.
Brokers believe there is an emerging picture of credit insurance being pulled on companies and increased loss rations.
However, insurers can plug those gaps by selectively picking up new business from an increasing glut of firms desperate for cover in a recession.
Desnos said: “Euler Hermes cannot comment on individual cases but it is true to say that companies are not as credit worthy as they were 12 months ago.
“However, decisions to not extend credit insurance on future trade are not taken lightly and only after full consideration of all relevant information.”
