Two weeks after promising to build bridges with the timber sector, leading credit insurer Atradius says it has now extended cover to about 300 timber-related companies.
Speaking to TTJ’s Stephen Powney at the company’s London offices, Atradius UK and Ireland commercial director Shaun Purrington said the extensions, relating to companies already covered by Atradius, were part of a policy to increase cover to 13,000 businesses following an underwriting review.
Atradius and other major credit insurers were heavily criticised by timber traders at the height of the recession for the sudden reduction or removal of cover, making a difficult trading environment even more challenging.
Mr Purrington said a regular flow of companies in the timber sector were still failing and predicted a difficult fourth quarter. But he said Atradius had taken all the action it needed to on cover in the current quarter.
“The outlook for credit insurance is more favourable than it was three months ago,” he said.
Mr Purrington said there was a polarisation in the timber trade between financially well-run companies and those that were lax towards credit and debt. He said a return to good old-fashioned credit control was needed in some respect, while he also expressed concern that firms were using the government’s tax deferral scheme as a form of working capital.
Mr Purrington did not believe Atradius’ actions on cover earlier this year were disproportionate but it had needed to take action quickly because of the economic climate. He empathised with traders affected but said there was a misunderstanding of what credit insurers were there to do.
Atradius has now launched a new online rating tool to give customers more information on the credit rating of companies covered. “In the past we have not been so transparent,” he added.
Full details of the interview with Shaun Purrington will appear in TTJ’s Banking, Insurance & Finance feature on December 19.
