Credit crunch hits media insurance
Media agency chiefs have warned that the credit crunch is hitting their ability to secure insurance cover on the media spend of vulnerable clients, leaving them exposed to greater risk and potential loss of business.
This follows reports this week that Woolworths has had difficulties
obtaining credit insurance from the three major credit insurers. These
include Euler Hermes, the company that supplies the majority of credit
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spend by clients.
However, Woolworths is thought to remain in negotiations over securing
insurance on its £16 million media spend.
One agency boss said: "It's become a massive issue, especially in the
banking and retail sectors, and this is leading to problems. Clients can
get quite aggressive when you ask them to pre-pay."
Euler Hermes issues a monthly credit check to agencies using a traffic
light system and agency bosses indicated that increasing numbers of
clients are slipping into the amber and red "warning" categories.
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