LONDON, 5 June 2008 – In the current struggle for liquidity, Aon’s White Paper* out today looks at how companies can take advantage of new Standard and Poor’s (S&P) scoring criteria to improve credit ratings. The rating agency is enhancing its global scoring process to include a review of enterprise risk management (ERM) programmes.
Currently, even as regulators and corporate stakeholders push companies to do more to mitigate enterprise-wide risks, only one in 10 companies in the Americas and Europe has fully integrated an enterprise risk management (ERM) strategy, according to a recent Aon Global Risk Consulting survey.
Preparing for the S&P assessment can drive financial benefits, including:
- improved access to capital and the cost of capital;
- a reduced cost of servicing debt; and
- increased investor confidence.
S&P will assess how management addresses the risks to its strategic plans and embeds a culture of risk awareness. Even though formal scoring will not take place until 2009, Alex Hindson, head of ERM at Aon, is warning companies not to leave preparation until the last minute.
He commented: “With the current economic squeeze, the new S&P criteria comes at a opportunistic time for companies seeking to improve their access to capital and reduce the cost of borrowing. The good news is that there is plenty of time to conduct an objective, third party review of your ERM programme prior to the official S&P evaluation to boost your rating.”
“A good credit rating is essential for the ongoing financial health of a company and, as such, ERM offers many additional business benefits. Independent benchmarking reviews in advance of any rating will act as a catalyst for implementing best practice and assist in risk identification, assessment and mitigation strategies.”
ERM also encourages:
- stronger risk culture and governance;
- improved risk controls;
- preparedness for emerging risks;
- risk management embedded in strategic planning.
* please contact me for a copy at:
Alexandra Lewis
020 7882 0541
About Aon
Aon Corporation (NYSE:AOC) is the leading global provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting. Through its 36,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Our industry-leading global resources, technical expertise and industry knowledge are delivered locally through more than 500 offices in more than 120 countries. Aon was named the world’s “best broker” by Euromoney magazine’s 2008 Insurance Survey. Aon also was ranked by A.M. Best as the number one global insurance brokerage in 2007 based on brokerage revenues, and voted best insurance intermediary, best reinsurance intermediary, and best employee benefits consulting firm in 2007 by the readers of Business Insurance. For more information on Aon, log onto www.aon.com
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