Credit insurance problems are reaching deeper into the economy. Energy customers are the latest to join the queue of sectors faced with either the loss of cover or paying stiff premiums to ensure they continue to be supplied with gas and electricity to keep them in business.
Customers, both big and small, are jittery. Energy suppliers are playing safety first and attempting to reduce their exposure.
There are unhealthy and costly developments in the market place. Suppliers have been telling some customers they will have to pay in advance for up to six months consumption because they have failed to qualify for cover. In some cases insurers have been rejecting applications for cover in a wholesale fashion.
The run-up to the October round of new electricity contracts between energy suppliers and their customers has raised fears about a "crisis" and brought Ofgem into the ring. The Major Energy Users' Council is concerned that companies will have to turn the lights off if they are unable to get contract cover.
The regulator has called all the main players to a meeting next week to try to find a solution. It will not be easy. Insurers say they have little option but to take a cold, hard look at the prospects of companies being able to pay their bills – in all sectors of the economy not just energy – and complain that the quality and quantity of information they get adds to their difficulties in making intelligent judgments about the viability of a business.
The complaint has a familiar ring. Data filed at Companies House for small and medium sized businesses, in particular, is limited because successive governments have been anxious to reduce burdens on SMEs (small and medium-sized enterprises).
The companies say they want a constructive and closer dialogue with insurers. In turn, insurers reply that they want more transparency.
The sooner there are productive talks the better but the problem could have been headed off. All sides should have been talking to each other much earlier.
Whatever happened to common sense?
There are unhealthy and costly developments in the market place. Suppliers have been telling some customers they will have to pay in advance for up to six months consumption because they have failed to qualify for cover. In some cases insurers have been rejecting applications for cover in a wholesale fashion.
The run-up to the October round of new electricity contracts between energy suppliers and their customers has raised fears about a "crisis" and brought Ofgem into the ring. The Major Energy Users' Council is concerned that companies will have to turn the lights off if they are unable to get contract cover.
The regulator has called all the main players to a meeting next week to try to find a solution. It will not be easy. Insurers say they have little option but to take a cold, hard look at the prospects of companies being able to pay their bills – in all sectors of the economy not just energy – and complain that the quality and quantity of information they get adds to their difficulties in making intelligent judgments about the viability of a business.
The complaint has a familiar ring. Data filed at Companies House for small and medium sized businesses, in particular, is limited because successive governments have been anxious to reduce burdens on SMEs (small and medium-sized enterprises).
The companies say they want a constructive and closer dialogue with insurers. In turn, insurers reply that they want more transparency.
The sooner there are productive talks the better but the problem could have been headed off. All sides should have been talking to each other much earlier.
Whatever happened to common sense?
Source : The Daily Telegraph
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