Ingram counters credit claims

Distie denies reports that it plans to drop credit insurance

Ingram Micro has denied claims that it wants to have less reliance on credit insurance.

This month's Credit Today claimed that Ingram was planning to reduce cover, from insurer Euler Hermes, in favour of more in-house credit facilities.

But the broadline distributor has categorically denied the move, and said it continues to value credit insurance.

"Contrary to the report, we are not currently proposing to drop credit insurance in our European business," it said in a statement.

Ingram added that credit management is a core competency it reviews regularly.

"We recognise that both the insurance and credit markets have changed and we are looking to optimise our coverage in light of these changes," the statement said.

However, according to Ian French, president of Bell Microproducts Europe, the move would not have been a surprise to other channel players. He claimed that everyone will change the way they cover against credit risk because of "the double whammy of rising premiums and falling credit".

Alan Norton, head of intelligence at credit management firm Graydon, agreed that this is an industry trend as businesses pay out more in insurance premiums than they receive in claims.

"If businesses carry out analysis for the previous five years it becomes obvious," he said.

Firms won't abandon credit insurance completely but are likely to use a mixed model. "To make this work they need a reliable data source and good credit control procedures," he said.

Nitin Joshi, partner at insolvency specialist PKF, said companies can limit credit risks with sophisticated checking systems based on up-to-date information.

"You do not always need whole turnover insurance but I recommend taking out catastrophe cover," he said.