Management Consulting

ABConnect faced significant challenges related to credit concentration, particularly with their largest ten counterparty exposures, which restricted new orders to manage credit risk. To address this issue, Aon implemented an excess of loss coverage solution that allowed ABConnect to transfer additional credit risk to an insurer. This tailored solution included negotiating non-cancellable coverage limits, which provided certainty of cover for key buyer exposures amid concerns about a deteriorating retail sector. As a result, ABConnect was able to accept additional orders, leading to increased revenue and business growth. In another case, a large underground mining contractor encountered substantial political risk associated with both domestic and export exposures on various mining exploration projects. The contractor faced restrictions on working capital due to credit risk uncertainties with counterparties. Aon secured non-cancellable coverage limits on these difficult-to-place credit risk exposures and mitigated political risk through a trade credit endorsement, expanding the scope of coverage with a comprehensive political risk policy. This credit risk transfer to an insurer enabled lenders to increase accounts receivable margining by as much as 20%, providing the contractor with access to new working capital for reinvestment in their business. Additionally, a large energy client needed to invest significantly in infrastructure to facilitate the transportation of a commodity. Concerns about the producer's potential insolvency during the two-year transportation service agreement posed a risk to the return on investment for the infrastructure. Aon deployed non-cancellable trade credit insurance for the short-term credits arising from the agreement and implemented a performance surety solution to ensure the producer's ability to deliver the commodity. This approach provided the client with peace of mind regarding their infrastructure expenditure and enabled them to complete the transaction, ultimately contributing to their business growth.