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Non-payment Credit Insurance, an Excellent Partner of Finance Institutions

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In a volatile and unpredictable economic environment, financial institutions need to carefully manage their balance sheet and credit risk. Aon can assist in structuring your credit and political risk strategy and building a global insurance program that complies with financial regulations.
According to Aon 2021 global risk management survey, the top five risks for financial institutions are cyber risk/data breach, economic slowdown, damage to reputation/brand, counterparty credit risk, regulatory /legislative changes.
The top five risks in the next two years include: cyber risk/data breach, economic slowdown, damage to reputation/brand, counterparty credit risk, regulatory /legislative changes failure to innovate and meet customer needs. The research also indicated that 76% of the respondents in the survey plan to review credit risk in the near future.
What is Non-payment Insurance?
  • Underwriting the financial institutions’ risk of failure to collect loan payments or accounts receivable.
  • Coverage of financing risks, including credit financing, non-recourse project financing, public infrastructures and securities, etc.

The features of credit insurance:
  • Protects financial institutions from the risk of failing to collect the receivables from borrowers.
  • Customised credit insurance, policy terms can be designed according to bank needs and individual financing agreements.
  • Insurance period with financing agreement, up to 20 years.
  • Strengthen capital management and risk management.

Aon can help financial institutions:
  • Deepen customer relationship - increase the bank's credit line to customers and strengthen the relationship with customers.
  • Enhancing competitiveness - sharing the risk of large financing projects through insurance, without requiring other competitors to join in the loan.
  • Capital Relief - Insurance is a legitimate risk mitigation tool. Insurers with good credit ratings can reduce bank’s risk-weighted assets and improve capital adequacy ratio.

We focus on:
  • Monetary policy is tightened and tensely leveraged, companies with weak financially may increase default risk due to costs raising.
  • Global insolvency rate expected to increase by 15% - 30% in 2022 as government support for business tapers off.
  • Geopolitical risks is raising, coupled with supply chain disruption and production capacity reallocation, not only affect corporate investment strategies, but also greatly increase the uncertainty of credit risk.
  • Rising energy and commodity prices further magnified inflationary pressures.
  • The debt of emerging market is climbing, default risk deserves attention.