Innovative concepts designed to reduce credit risks for financial institutions
Financial institutions have to overcome many challenges in their day-to-day business: they have to reduce their risk positions and manage both individual default risks and political risks in individual countries, all the while seeking to improve their own capital. Regulatory requirements mean that credit institutions are also obliged to reduce their risk-weighted assets – in a bid to free up equity.
Aon supports institutions by providing innovative solutions. That’s because specially designed insurance solutions can cover the default risks of financial institutions whenever granting major loans. Risks involved in bank guarantees and other guarantee business can also be transferred to insurers.
Aon has developed a special concept to protect financial institutions from the risk of default. Our specialist team allows credit risks to be managed. At the same time, we also examine how a financial institution can make best use of its capital, letting the business grow while returns are improved.
Faced with complex, ever changing regulatory requirements, financial institutions are seeking effective, tailor-made insurance and guarantee solutions designed to cover a variety of forms of finance and to help optimise capital.
That’s why Aon supports the business of financial institutions in three key areas:
- Optimisation of the employment of capital – Use of insurance and guarantee products as a recognised form of credit protection with no financing function for capital relief and to maximise returns on risk-weighted assets – even allowing for regulatory arbitrage.
- Risk management – Support for internal credit decisions through risk reduction and credit enhancement, for both investment grade and non-investment grade risk classes.
- Concentration of default risks – Insurance-based alternatives to bank syndication designed to improve the spread of risk while maintaining an appropriate retention.
Aon is a leading global credit insurance broker. In Germany, we’re part of the largest global network of credit insurance experts: with around 500 employees at over 100 locations in 57 countries.
We also have a centrally coordinated Financial Institutions Team. This specialist team is integrated into the local units, pooling the purchasing of insurance.
With our successful solutions for numerous financial product lines, we’re a reliable partner in the management of credit risks and concentrations as well as in the optimisation of capital employment for financial institutions.
Solutions are individually tailored to the German market and offer the right protection for a whole host of different forms of finance.
We offer solutions for protection of the following forms of finance:
- Asset finance
- Project finance
- Asset-based loans
- Revolving lines of credit
- Export finance
- Commodity finance
- Sureties and guarantees
- Acquisition finance
- Interbank business
- Trade finance
What we offer:
- Coordination of business / risk strategy
- Recommendations regarding insurance placement strategy and implementation within agreed timeframes
- Trend analysis and benchmarking of claims settlement and pricing behaviour among insurers
- Review and quantification of credit risks
- Design of syndicated structures with a variety of risk carriers
- Writing/preparation of policy wordings and ensuring their compliance with Basel II / III
- Monitoring of insurers’ counterparty limits
- Claims settlement support from our experts
- Creation of market transparency and transfer of know-how