Atradius, the world's second largest provider of credit insurance, posted the biggest loss in its history last year as the cost of paying claims to customers in the recession rocketed. The group, which has been heavily criticised for pulling cover to suppliers of a host of high street names, including the likes of DSGi and Woolworths, said it lost €193m (£172m) in 2008. In 2007, the company made a profit of €163m.
Credit insurers protect suppliers against losses if their customers fail to pay bills. The withdrawal of cover against a company is viewed as a major sign of distress.
Isidoro Unda, the chief executive of Atradius, said he anticipated a "challenging business environment in 2009" but added that a combination of price increases and the withdrawal of cover to riskier clients meant it was in a better position than its rivals.
"We have had to increase prices and prudently manage our risk positions," Mr Isidoro said. "We have stood beside our customers throughout this economic downturn despite the harsh business environment in some markets where we have a leading position."
Atradius employs more than 4,000 globally, including 600 at the group's UK head office in Cardiff.
Baroness Vadera, the minister for Small Business, is believed to be working on a plan to overhaul the credit insurance market in the UK, with an announcement imminent. She is believed to be pushing proposals that would see the Government underwrite 50 per cent of credit insurance risk in situations where cover would typically be withdrawn.
However, Atradius, Euler Hermes, and Coface, the three insurers that account for 80 per cent of the UK market, are all thought to oppose such a move.Reuse content