Aon report finds credit solutions stepping in as volatility bites

LONDON, 11 February 2020 – A new report, “Driving growth through uncertain times: The hidden gemstones”, released today by Aon plc, the leading global professional services firm providing a broad range of risk, retirement and health solutions, looks at the increasingly critical role that the credit insurance market is playing in helping businesses deliver continued growth.

The report examines the increased volatility facing the C-suite today, especially for those businesses looking to expand through international trade. From the unpredictability of the US / China trade tensions to the impact of Brexit, businesses are contending with an ever more uncertain macro-economic environment. In addition, changing purchasing behaviour and increasing consumer expectations are also adding to uncertainty and corporate vulnerability while digital transformation and new entrants are disrupting consumer-facing market.

Businesses, therefore, are having to both manage this uncertainty and invest in new sources of growth, exploring new markets, geographies and customer segments. This is putting increased pressure on balance sheets at a time when banks are reducing their exposures to corporate credit and looking to de-risk their own balance sheets.

The report looks at the importance of credit insurance as a financing tool, especially in the context of banks constraints to extend credit. By insuring the credit risks posed by their clients’ yet-to-be-settled invoices and payment obligations, insurers make it easier for banks to lend. Credit insurance is now a critical tool for many banks in managing their own risk exposures and, based on recognized market intelligence², Aon estimates that the notional amount of credit insurance covering outstanding bank exposures is continuously growing and is in excess of $300 billion.

However, despite this, there is still significant scope for further uptake and awareness of the solutions the credit insurance and surety market can provide; Aon estimates as few as 20% of CFOs are making use of the full range of solutions available.

Also explored is how new innovations, data and analytics and AI within the insurance sector are giving clients access to predictive insights that allow them to better model exposures, optimise working capital and understand the credit risk posed by key customers and markets.

Stuart Lawson, Chief Executive Officer EMEA, Credit Solutions, Aonsaid: “Today, business leaders are being faced with ever more uncertainty as they look to navigate through highly volatile economic and political environments. Against this backdrop, businesses are under increased pressure to both free up capital and manage supply chain risk. Credit insurance should be viewed as a critical tool in achieving these goals, enabling businesses to more effectively use the credit and capital markets to underpin their strategic ambitions – and enable sustainable growth.”

ENDS

Notes to editors

• 1.Source: International Credit Insurance & Surety Association (ICISA Press Release, 18 June 2019)
• 2.Source:ITFA insurance committee survey

About Aon

Aon plc(NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

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Media Contact:

Tom Blackwell, FTI Consulting

+44(0) 203 727 1051 / tom.blackwell@fticonsulting.com