Credit insurer defends its position on Thomas Cook

Credit insurer defends its position on Thomas Cook

Credit insurer Euler Hermes says it continues to write “significant levels of cover” for Thomas Cook and other major tour operators after officially confirming it will pull cover on new bookings of third-party trading partners.

Euler Hermes has confirmed to Travel Weekly that it has now written to third-party suppliers giving them 30 days' notice of its intention to withdraw its limits for sales of future products.

In the past, credit insurers have been criticised for failing to give notice of pulling cover.

However, the company said it still maintained "significant bonding cover" to Thomas Cook to the tune of "tens of millions of euros" and is continuing a "healthy dialogue" with the travel giant.

In a statement, Euler Hermes said: “Euler Hermes continues to write significant levels of cover for Thomas Cook and other major operators within the travel industry.

"It is not unusual for levels of cover to be reviewed – upward as well as downward – as our assessment of risk evolves. 

"We enjoy a healthy and constructive dialogue with Thomas Cook’s senior management and advisers, and continue to review all information about its current and future position.”

The company also defended moves by credit insurance companies to review cover as critical to protecting their own clients.

“It is never in a credit insurer’s interests to see a company fail, and we closely monitor the performance of all companies to help us protect our policyholders within the supply chain.”

It also added that it was incorrect to blame credit insurers for triggering collapses of high street businesses as a result of withdrawing credit insurance.

“This is a myth that has been allowed to gain currency almost entirely through a complete lack of understanding of how credit insurance works,” the company said.

Thomas Cook has already downplayed Euler Hermes’ move and said no product had been taken off sale as a result.

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