Insight shrugs off Euler Hermes downgrade

Corporate reseller claims credit insurer's decision to halve cover won't have adverse impact on trading abilities

Fenton: We do not expect the downgrade to have an adverse impact on trading abilities

Global resell giant Insight Enterprises has stressed that Euler Hermes’ decision to halve its credit insurance cover will have minimal impact on its business.

NASDAQ-listed Insight is one of the world’s largest resellers with global fourth quarter 2008 sales of $1.16bn (£793m). Euler's move applies to its operations in the US, EMEA and AsiaPac.

Stuart Fenton, president of EMEA and AsiaPac at Insight, confirmed that distributors' cover into Insight was reduced by 50 per cent towards the tail end of last week.

But he played down the impact the decision would have on Insight and stressed the firm is in sound financial shape.

He said: “Insight’s balance sheet remains strong with reasonable debt levels. We also have a business that generates significant cash flows, as seen in the fourth quarter of 2008 where we were able to pay down $103m of our debt outstanding during the quarter.

“Additionally, we maintain open communications with our top suppliers in EMEA and do not expect the downgrade to have an adverse impact on trading abilities.”

Insight 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. DSGi and Westcoast are among the other recent high-profile examples.