Insight absolves Euler move to halve cover

Insight Enterprises has refused to condemn Euler Hermes for halving its cover, insisting it was a mathematical decision triggered by the economic climate.

As revealed by CRN last week, the corporate reseller is the latest in a growing line of UK and global resellers to have been affected by credit insurers’ policy of reducing exposure in the channel (Channelweb, 7 April).

The move is poignant as Insight is one of the world’s true reseller powerhouses. In the final quarter of 2008 it hit global sales of $1.16bn (£793m), while EMEA revenues reached $329.2m (£223m).

Stuart Fenton, president for EMEA and AsiaPac for Insight, said the cutbacks would have a minimal effect on business because the firm was trading well below the credit limits offered by its distributors.

“Euler is risk averse because it is an insurer,” he said. “The algorithms it uses are triggered by the economic climate and have little to do with any change in our performance.”

Insight recently announced it may have to restate its results for 2007 and most of 2008 after identifying accounting errors.

Euler may also have taken a dim view of Insight’s debt levels, although the reseller is committed to improving its balance sheet after slashing net debt by $103m during its last fiscal quarter.

Jon Bunyard, general manager of distributor CCD, said that Euler’s risk-cutting actions were proportionate.

“Eventually we will start to see business failures and I get the feeling Euler is getting in its reductions prior to that happening,” he said.