Euler Hermes took a similar step in 2012, withdrawing cover for what Cook described as a “very small number” of its third-party suppliers after the company’s 2011-12 financial difficulties.

Cook was eventually subject to a £1.4 billion refinancing deal.

TTG understands the recent cut is a reduction in the level of cover provided to a number of Cook’s suppliers rather than a complete withdrawal of cover as it was in 2012.

Credit insurance protects third-party holiday and service suppliers like operators and cruise lines from the financial impact of a travel seller going out of business.

Suppliers typically agree credit cover with an insurer protecting them for an agreed sum of credit outstanding at the time of any such failure.

Association of British Insurers (ABI) spokesperson Malcolm Tarling told TTG it was important to remember cover, such as that provided by Euler Hermes, regularly fluctuates on account of market conditions and forces, adding he did not feel travel was struggling any more than other sectors.

“It’s a matter for individual insurers,” said Tarling. “They will always have different views on particular risks. It’s been a challenging 12 months for the retail sector, but that’s not to say
it [the sector] is uninsurable.”

Cook issued two profit warnings last year – the first in September and the second in November, two days before publishing its annual results.

The operator reported a post-tax loss of £163 million for the 2017-18 financial year and revealed net debts of £389 million, although turnover rose £500 million to £9.6 billion.

A year earlier, the company’s shares were valued at £1.20, but briefly fell as low as 20p on December 4, 2018.

A Thomas Cook spokesperson said: “We see any limited move from Euler Hermes as consistent with global insurance providers’ changing view of the UK retail environment.”

A Euler Hermes spokesperson said the company did not comment on individual cases or decisions concerning its clients.

An industry source told TTG they didn’t expect suppliers to sever ties with Cook following the decision by Euler Hermes due to the value of trade available to them through Cook.