Morse tight-lipped on Euler Hermes move

Morse is remaining tight-lipped on rumours that it is the latest casualty of credit insurer Euler Hermes’ channel cutbacks.

Distributors were today informed that the amount of business Euler is willing to underwrite with the London-listed integrator will be halved on 4 May.

The news comes hot on the heels of Morse’s results for the nine months to 31 March. Operating profit for the period fell to £2.8m, compared with £7.8m a year earlier.

Morse said in the accompanying statement that the trading environment for all its business units continued to be “very challenging” and that it had encountered lengthening sales cycles and deferred contractual decisions.

But the firm declined to comment for this story.

Eddie Pacey, director of credit at distributor Bell Micro, argued that credit insurers were acting fairly and proportionately given the tough climate.

“I personally have no real gripe with the fact they are cutting cover [in the channel],” he said. “When financials take a turn for the worse no one is going to increase their exposure level.”

Jon Bunyard, general manager of distributor CCD, said: "There has been a general tightening up of insured lines by Euler which reflects the current economic outlook. As a business, CCD transacts a fair amount of revenue on its own risk. We are standing by and supporting several partners and will continue to do so."

Bunyard also said the government's recently announced credit insurance top-up scheme would do little to help.

"Its rules are too expensive for wholesalers to buy the additional cover," he said.

Euler does not comment on specific cases.