Credit Solutions Case Studies

After suffering several non-payment losses, a business services company wanted to ensure their ambitious growth could be confidently sustained.

Their largest client requested extended credit terms to 210 days (where payment for each invoice was made over 6 equal monthly instalments). The typical payment terms for other customers were 30 days from invoice.

• Aon worked with an insurer to help them understand this specific credit risk and apply a special policy endorsement to ensure that all client credit term requirements could be met.
• Given the client’s experience of losses, Aon also made sure that they were able to fully benefit from the insurer’s in-house collections operation.

A large pulp and paper company was negotiating a new multi-million dollar, long-term packaging supply contract with a prominent retailer.

The two parties were exploring solutions that could allow for a credit period on the supply, as well as securing the non- payment risk. The contractual arrangement was subject to appropriate credit insurance being in place.

• Aon worked with the pulp and paper company to develop a credit insurance solution covering both pre-delivery (work in progress) and post-delivery non-payment risk.
• Aon coordinated financial and business presentations of the retailer to selected credit insurers.
• Our solution empowered our client to provide credit terms to the retailer which helped to secure the multi-million dollar contract.

An international travel agency was contemplating how to best enable continued business growth in certain key (emerging) markets.

Their success over recent years has resulted in significant credit exposures across the world.

• Aon developed a comprehensive insight strategy into key market trends that could impact the client’s ability to obtain credit capacity in key geographies such as China.
• Shortly after our appointment, Aon successfully provided the company with access to additional capacity through an innovative excess lines facility, sitting across the client’s global exposure gaps.

The client was looking to put in place a $90m off-balance sheet receivables finance facility; financing trade debtors across their business in order to reduce their net debt burden.

A credit insurance wrap was key to gaining auditor agreement that the finance facility was suitable for off- balance sheet treatment and the asset could be de-recognised.

• The Aon Credit Solutions team was able to structure a credit insurance wrap that transferred more than 95% of the trade debtor risk to the underwriter.
• This provided sufficient comfort for the client’s auditors to agree that the finance facility could be de- recognised and they were able to reduce their net debt burden by $90m when cover incepted.
• The Aon Credit Solutions team also arranged for a banking partner to provide an innovative financing facility.