Euler Hermes has said that it believes there will be more bankruptcies to come over the coming months, with the credit insurer warning that the UK has not seen the peak yet.
The warning came as the company revealed it had seen its profits drop 57 per cent for the first three months to €16.5m, despite it drastically reducing cover – a move that has seen it draw harsh criticism from all quarters of the channel. Despite the drop in profits, the company saw its turnover increase by 4.1 per cent.
“The economic climate remained unfavourable in the first quarter of 2009," explained chairman of the group management board, Wilfried Verstraete in a statement. "Therefore the number of claims was high and continued to depress group profitability."
It warned that the economy’s problems were far from over, saying that it had forecasted a further seven months of increases in bankruptcies. "The real economy is not expected to start recovering before the end of the year," the company said in its statement. "Against this backdrop, Euler Hermes does not expect to see any significant improvement in claims levels for the next quarters."