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Credit limits

  • Global approval rates continue to track below pre-pandemic level, hindered by ongoing supply constraints, high energy prices and Omicron variant.
  • Prior to the conflict and humanitarian crisis in Ukraine, growth forecast for H1 2022 hinted towards a relatively stable recovery in risk appetite.
  • As evidenced with the small decline experienced so far in Q1, approval rates across sectors are expected to become under pressure across 2022.
  • Our teams are available to assist you in identifying and managing any underinsured or seasonality exposures, thereby closing the gap for more comprehensive credit limit coverage.

Industry trends

  • Retail and wholesale show strongest recovery in approval rates up until Q4 2021, increasing by 15bps against prior year as consumers begin to spend the savings gathered during the pandemic.
  • Automotive increased 5bps year on year despite supply chain issues, as demand increased across the sector.
  • Food/drink demonstrated a robust recovery following strong trading results post pandemic. Agribusiness performed well during the mid part of the year reflecting an average 23bps increase on previous year for months March – September, with decline in December that stabilized in Q1 2022.
  • Approval rates for manufacturing shows a strong improvement year on year with a 6bps increase despite headwinds from supply constraints and energy prices.
  • Recovery in the steel and metals sector shows resilience despite high energy prices. This is underpinned by strong trading results and high forward demand.

Sector acceptance rates

Source: Aon TradingDesk Insights

Regional acceptance rates

Source: Aon TradingDesk Insights

Geographic trends

  • Strong commodity prices, supported by accelerated vaccine roll out has driven 9bps approval rate increase LatAm.
  • US economy finished 2021 with fastest full year rebound turnaround since 1984, growing 5.7 percent. Insurer approval rates driven by increase in consumer demand as consumers draw down on excess savings accumulated during the pandemic.
  • Approval rates within APAC slightly lagging due to ongoing supply constraints and uncertainty around new COVID variants/increase in cases (e.g. China).
  • Consistent supply chain issues slow increase in approval rates across EMEA in Q4 2021 and Q1 2022. Previous improvement forecasts for H1 2022 will be negatively affected by the effects of the conflict and humanitarian crisis in Ukraine (and Eastern Europe).