Trade Credit: a Growing Risk in a Global Economy

Consider these questions:

• Have you ever experienced credit losses, especially with suppliers overseas?
• Do you regularly sell to new customers and markets?
• Are you currently using asset-based financing or factoring?
• Are you concerned about the credit or country risk associated with growing your customer base overseas?

If they sound familiar, you’re not alone. In fact, managing credit and counterparty exposures has become one of the top risks facing manufacturers, distributors and wholesalers in today’s global economy.

The reasons are clear. Accounts receivable are often the largest uninsured asset on a company’s balance sheet — even though it is also the primary source of revenue. In addition, the global economic downturn and the Eurozone fiscal crisis have put at risk accounts receivable and constrained cash flows. Many companies are also entering new markets and extending their supply chains across multiple regions — all of which further increases the need to protect themselves from risks involving commercial trade debts.

To address these and other issues, Aon Trade Credit provides customized solutions for trade credit insurance, helping companies manage their credit and counterparty exposure while also supporting growth in new markets or with existing clients.

What is Trade Credit Insurance?

An insurance product that indemnifies a seller against losses from non-payment of a commercial trade debt arising from both insolvency and delayed default / slow payment by a buyer.

Protect Credit Assets and Support Growth

Our solutions offer protection of accounts receivables against non-payment due to slow pay, insolvency or foreign non-transfer risk. Coverage is designed to prevent disruptive losses, reduce risk of key account concentration levels, and provide risk transfer of bad debt issues.

Companies can also enhance their bank financing in terms of improving the lending relationship, enhance their balance sheet and gain access to more capital at reduced rates.

Additionally, Aon Trade Credit solutions can support sales in new or riskier markets, grow existing accounts, and strengthen customer relationships by helping buyers with letter-of-credit requirements and other issues.

Use a Data-Driven Approach to Differentiate Risk

Aon Trade Credit uses a detailed, data-driven approach to identify and measure risks in the trade credit insurance marketplace. Our extensive financial analysis helps define the total cost of risk based when utilizing multiple loss mitigation methods. We also conduct in-depth discussions with credit, sales channel management, finance, treasury and risk management to review current practices.

Equally important, we consider critical factors impacting the pricing and performance of the end solution. These can include underwriting options such as single-buyer, multi-buyer, top-up cover and syndications. Other factors might involve the choice between cancelable or non-cancelable programs as well as considerations about current credit management processes and loss history.

Your Aon Advantage: Dedicated Specialists Backed by Global Resources

For each client, Aon Trade Credit provides a team of dedicated brokers, including a single point of contact who is fully empowered to deliver ongoing policy and claims support. No third parties or automated systems are used. Instead, the Aon team works closely with each client individually to understand their specific business needs.

As a part of Aon plc, the worldwide leader in risk advice and insurance broking, Aon Trade Credit supports more business and multinational programs across more countries than any other trade credit insurance provider. Our resources include over 500 specialists in 50 countries, which means that we have both global reach and an understanding of local conditions and requirements.

To learn more

Aon professionals can provide organizations with the experience, tools and deep industry expertise required to ensure optimal risk management solutions for Trade Credit insurance. Contact an Aon Trade Credit representative to learn more