LONDON, 25 February 2009 – Credit insurers have taken over the mantle from ratings agencies in determining UK companies’ credit worthiness, according to Aon Trade Credit, the leading credit insurance broker. This shift in power means that it is in businesses’ interest to work with credit insurers – which provide suppliers with cover against bad debts – to ensure that they have sufficient insight to enable credit lines for their key suppliers.

Credit ratings agencies play an important role in identifying a company’s financial strength. However, insurers are one step ahead as they use both historical data and up to the minute payment/ key management information, in addition to taking a wider view from buyers’ business models and future strategies. Secondly, credit insurers also assess companies of all sizes, not just the large corporations that have been the primary focus of the rating agencies.

In light of increasing levels of insolvencies, credit insurers are being much more stringent and thorough in assessing a company’s creditworthiness.  Inevitably, this has resulted in a reduction in cover in volatile sectors such as construction, retail and automotive. 

Stuart Lawson, head of Aon Trade Credit in the UK, commented: “The key is not to see this as an unnecessary intrusion but view information requests from insurers as a positive step to enable credit lines to be maintained or even increased. If a major customer becomes insolvent, your own business could be compromised if you haven’t or were unable to take out insurance to protect against such an event. It illustrates the growing influence and importance of credit insurers in the health of supply chains and reinforces the benefits of working in partnership with them.” 

In summary, in order to maintain or establish sufficient credit lines, Aon recommends:

· Talking to insurers to demonstrating your financial strength
· Providing insight into business plans and forecasts
· Maintaining on going dialogue and information flow.
 

Ends

For more information contact:
Alexandra Lewis
020 7882 0541
Alexandra.lewis@aon.co.uk
http://aon.mediaroom.com

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. In 2008, Aon ranked highest on the Business Insurance ranking of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues. Aon also was ranked by A.M. Best as the number one insurance broker based on brokerage revenues in 2007 and 2008, and was voted best insurance intermediary, best reinsurance intermediary, and best employee benefits consulting firm in 2007 and 2008 by the readers of Business Insurance. For more information on Aon, log onto http://www.aon.com/.

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