LONDON, Nov 14 (Reuters) - Three big European credit insurers have removed cover from suppliers to troubled U.S. carmakers General Motors Corp and Ford Motor Co, the Financial Times reported on Friday.
The withdrawal of credit insurance, which covers suppliers against the risk of the car companies failing, was undertaken by Euler Hermes, Atradius and Coface, which control more than 80 percent of the world's credit insurance market, the paper said.
The three are refusing to write policies for suppliers trading with GM or Ford on credit, it reported, without citing sources.
Euler Hermes UK Chief Executive Fabrice Desnos declined to comment on any specific cases, but he said the global financial crisis was making it harder to justify suppliers giving credit even to larger companies.
"The deterioration of the market and the economy is such that companies' creditworthiness is really affected very quickly," Desnos told Reuters.
"Whereas traditionally these risk withdrawals would be directed towards the smaller companies, at the moment we have to realise that nothing is too big to fail. We are having to deal with larger companies facing difficulties."
The current lack of credit and liquidity available in the market meant it was more difficult for companies to warrant credit from their suppliers.
"A lot of companies are not able to access finance because the banks globally have stopped lending," Desnos said. "There is not a company that could say it is immune to the present environment."
Euler Hermes never cancelled particular policies or existing agreements, Desnos said, but rather risk withdrawal would apply to new transactions, adding that Euler Hermes also provided risk analysis to suppliers.
Atradius said in an emailed statement it did not comment on individual companies, but added: "The current economic environment is tough, and car manufacturers are among those being hit by the financial slowdown.
"We are pulling back cover in some cases as an absolute last resort, but we are continuing to work with businesses to keep trading going as long as possible."
No one at Coface was authorised to comment.
GM and Ford are two of the biggest groups ever to be blacklisted, the FT said, adding that the cut-off of cover would primarily affect the companies' large operations in Europe, where the insurers do the bulk of their business.
U.S. suppliers largely operate without insurance, the newspaper said.
Earlier this week, Atradius said it had cut back its provision of credit insurance for companies supplying some retailers, hitting shares in British electrical goods retailer DSG International Plc.

(Additional reporting by James Regan in Paris)

(Reporting by Andrew Callus and Mark Potter, editing by Will Waterman) Keywords: AUTOS INSURANCE/ (andrew.callus@thomsonreuters.com; 0207 542 5599; Reuters Messaging: andrew.callus.thomsonreuters.com@reuters.net)

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