Annual reports no longer up to date says Euler Hermes
Underwriters are refusing to provide credit insurance cover if companies do not provide three to six months of recent trading data, the Telegraph has reported.
It says insurers that previously relied on annual accounts are cutting cover available to existing customers as fears mount that there will be more corporate collapses in the recession.
Credit insurer Euler Hermes said that for many companies, the economic environment was deteriorating so rapidly that last year's figures no longer provided an accurate picture.
Fabrice Desnos, chief executive of its UK arm, said companies must provide their credit insurer with "the latest financial information as regularly as possible to enable the insurer to still feel comfortable about staying on risk", the Telegraph reports.
He said: "In the current climate we are asking buyers to be far more transparent than a year ago. Whereas in the past we may have given them the benefit of the doubt, today Euler Hermes will need to be convinced that the company will weather the storm. Refusing to talk or ignoring requests for information are strategies unlikely to help us decide that they are still an insurable risk."
Martin Holland, managing director of the credit and surety division of Insurance broker Heath Lambert said: "Insurers are asking for figures that are not more than three to six months old. If a company's year end is not then, they cannot provide the accounts."
