Trade Credit: A Growing Risk in a Global Economy

Aon is a leading international credit insurance broker providing our clients with innovative solutions against non-payment risks, while improving access to trade finance and helping their businesses to grow. Our objective is simple: create long-term client partnerships by delivering tailored, effective insurance backed-up by a highly professional day-to-day service.

Having the right payment terms with your customers is critical to your competitiveness and ability to grow your organisation with confidence. Ensuring terms of business are adhered to is not always in your control. Without protection that your invoices will be paid, your business decisions are based on faith and past experience alone, which may not be the best grounds for ensuring business profitability.

This is where credit insurance and robust credit management policies can help. While it is about protection against bad debt, credit insurance is also a facilitator for growth and for maximising your profitability.

Consider these questions:

• Have you ever experienced bad debt losses either in your domestic or export market?
• Do you regularly sell to new customers and markets?
• Do you extend long payment terms to your customers?
• Are you currently using invoice discounting or factoring?
• Are you concerned about the credit or country risk associated with growing your customer base overseas?

Credit Risk Management

Managing credit exposures has become one of the top risks facing manufacturers, distributors and wholesalers in today’s global economy. The reasons are clear. Accounts receivable are often the largest uninsured asset on a company’s balance sheet — even though it is also the primary source of revenue.

Many companies are also entering new markets and extending their supply chains across multiple regions — all of which further increases the need to protect themselves from risks involving commercial trade debts.