Credit insurers say recession has bottomed out for retailers
Credit insurers are prepared to insure previously blacklisted retail firms in the run-up to Christmas, the Times reports.
Shaun Purrington, regional director of UK and Ireland at Atradius, said the company was “looking to increase” the amount of cover that it provided in the next few months, after cutting its €45bn (£39bn) coverage in the UK by about 10% during the credit crisis.
“We have now reached the end of a very difficult period where we were reducing capacity,” he said. “I think the future is slightly more positive. It’s important for us that we extend new trade credit lines.”
Case by case
Xavier Denecker, managing director of Coface, said: “We needed to reduce our exposure to the most fragile companies. We have done that and now we are at a moment in which we are prepared to give new cover on buyers.
"We will make decisions on a case-by-case basis. We know that the bottom of the recession has been reached, but we are not returning to dynamic growth in the economy. Companies will have been already weakened by one year of crisis and will not have the oxygen of rapid growth they need in coming months.”
Premiums will be high
Fabrice Desnos, chief executive of Euler Hermes UK, said: “Credit insurance prices reflect risk anticipations and, as a result, are expected to continue to rise in the near future.”
Richard Lim, economist at the British Retail Consortium (BRC), said: “There has been a slight easing in conditions, a small improvement, but what we have really seen is that retailers are still having massive difficulties. A lot of retailers are saying that it’s still a major problem for them.”
