Management Consulting

For one U.K. manufacturer that relied heavily on a single customer for a significant portion of its revenue, the implementation of a tailored credit insurance program was crucial for its survival. The manufacturer faced a concentration of risk due to its dependency on this customer, which raised concerns for its bank regarding the stability of financing. To mitigate this risk, the bank opted to purchase credit insurance on the manufacturer’s receivables. However, when the credit insurer reduced its credit limit on these receivables, it jeopardized the manufacturer’s financing stream and threatened its operational viability. The solution involved engaging a broker to identify a new credit insurer willing to cover the receivables associated with the major customer. Aon successfully found an insurer that offered a non-cancellable limits policy, ensuring that the coverage limits could not be reduced during the policy period. This new credit insurance policy provided essential security not only to the bank but also to the manufacturer and its customer. As a result, the manufacturer was able to seek out a new bank for its receivables financing program, ultimately securing a better rate than before. This strategic use of credit insurance not only safeguarded the manufacturer’s income stream but also enhanced its attractiveness to lenders, thereby expanding its access to capital and ensuring its continued operation.