Euler fights its corner after channel criticism

The head of credit insurance giant Euler Hermes has spoken out about the company’s actions in the IT market, claiming its methods are often misunderstood.

Earlier this year the firm pulled cover on distributor Bell Micro Europe, which caused shockwaves in the channel (Channelweb, 22 July).

Speaking exclusively to CRN, Euler chief executive Fabrice Desnos said: “It is a shame when we get bad press because our ethos is all about protecting our clients.

“We are still offering as much insurance in the UK as we were a year ago, but we cannot please everyone all of the time.”

Desnos added that before cover is pulled or reduced, each individual case is carefully considered and is the result of a significant number of phone calls, meetings and letters with the affected company.

“Sometimes we give enough warning signals, but people do not want to hear,” he said.

However, despite the constant talk of a credit crunch he said the IT sector was holding its own.

“IT is probably one of the least affected sectors so far, but it does not mean that every single company is in good shape.

“Ultimately, we want to stop companies failing. Obviously we want to grant cover for as long as possible because when we stop providing new cover, we stop earning money,” he added.

Alastair Edwards, senior analyst at Canalys, said credit insurers played a vital role in the industry.

“Credit insurers such as Euler are good indicators of the state of the channel and the strengths and weaknesses of the industry,” he said. “In the current climate they are likely to be more cautious and jumpy and it means that there will be an increased level of unsecured credit in the market as the channel shoulders more of the risk.”