Soaked in bad news, GM and Ford received yet another dousing when their three big European credit insurers dropped them this week. Euler Hermes, Atradius, and Coface have all refused to write policies for suppliers trading with both automakers. The three giant insurance companies control more than 80 percent of the world's credit insurance (insurance companies typically pull their coverage when a client stops proving insurers with enough information to calculate a credit risk, or their overall risk profile has deteriorated). Without their credit cover, suppliers will be forced to either trade uninsured, cease trading, or ask for payment up front. Supply issues aside, this news only compounds the automaker's problems as it also weakens investor confidence, already completely slumped.
[Source: FT, free subs. req'd]






Of all the ways an insurance company calculates a driver's premiums, the one factor that's been left out of the equation is real world mileage. Sure, we tell the our insurance provider how many miles we travel, but if its less than the stated minimum, there's no way to prove we've been on the road less. GMAC and OnStar are planning to rectify the matter, post haste.













