Crunched by insurers
Credit insurers are under the microscope again this week in two CRN stories.
Yirrell: Recent credit insurer happenings do not help anyone in the longer term
The first incidence is around the government’s plans to reform the insolvency process to offer more companies rescue deals, rather than forcing them into pre-pack administration deals that hit creditors hard.
A consultation has been launched, which closes on 7 September.
However, industry players have expressed concern at a clause that will allow credit insurers to offset the proceeds of any sales made post insolvency against their final payout to creditors.
If a distributor continues to supply a reseller that has gone into administration, they could risk losing all money from transactions made after the administration.
Hardly an incentive to support struggling firms, is it?
As a result, channel companies are asked to submit their views before the consultancy period ends. I will also be interested to hear the insurers’ take on it and whether they would actually invoke that clause.
Secondly, Atradius has been lambasted by Quadnet for pulling all its credit insurance, without, the VAR claims, giving it a chance to put its business case across.
This has seriously affected the firm’s ability to trade and it has had to turn business away as a result.
There are two sides to every story, but this kind of behaviour by the credit insurers does not help anyone in the long run, and I hope the issue is resolved in a positive way very soon.
Sara Yirrell is editor of CRN [email protected]