Insurers in shock move on Debenhams - reports

Insurers in shock move on Debenhams - reports | Insurance Business

Insurers in shock move on Debenhams - reports

It looks like another retailer-credit insurer battle looms.

If reports are to be believed, then high street retailer Debenhams could be facing supplier woes amid a supposed reduction in credit insurance. A report by The Sunday Times cited Allianz-owned Euler Hermes as having decreased cover “dramatically,” while other credit insurers Coface and Atradius are said to have turned their backs on new shipments.

The Guardian, meanwhile, quoted an independent retail analyst as calling the Debenhams insurance situation “a massive warning light” barely a month after the department store chain issued another – the third in 2018 – profit warning.  

“I regard credit insurance reduction as a very significant warning signal,” commented analyst Richard Hyman. “They are not doing it for laughs, they are doing it because of how the risk is unfolding. It suggests a change in that risk and a deterioration in the underlying trading performance.”

Debenhams, however, asserts all is well on the credit insurance front.

“All the credit insurers continue to provide cover to our suppliers and we maintain a constructive relationship with them,” The Guardian cited a spokesperson as saying. “It is well-documented that market conditions are challenging, but Debenhams continues to be profitable, has a clear strategy in place, and is taking decisive actions to strengthen the business‎.” 

On its website the British retailer says it has more than 240 stores across 27 countries.

 

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