Introduction

Aon's Credit Solutions Chief Broking Officer reviews 2021 and looks ahead in 2022

I am pleased to share our Q1 Insights from Aon’s global Credit Solutions leadership team which outlines the insurance market dynamics in 2021 and early 2022 as well as highlights some of the critical expectations for the remainder of the year.

Credit insurers emerged from the COVID-19 crisis in 2021 with remarkably strong financial results, driven by i) increased premium volumes due to repricing from the pandemic as well as recovered client activity, ii) lower levels of expected business insolvency due to government  support measures, and iii) amplified demand for innovative solutions. This performance has no doubt been a factor in attracting new capacity into our market. New entrants so far in 2022 include Cartan Trade in France/Europe and Amynta TCPRS in US.

The multiple domino effects from the conflict and humanitarian crisis in Ukraine and (Eastern) Europe will be profound and long lasting. From an economic perspective, while certain sectors such as Energy are the first to be affected, supply chains across industries will inevitably deteriorate. Businesses will need to review their existing trade relationships and consider turning to new partners and markets in response to the new macro and regulatory environment.

As our interview with Chief Financial Officer of Rutronik, Dr Gregor Sommer brings to life, business leaders need continuously adapt to new situations imposed by the changing business environment while delivering enhanced client value and driving growth.

Our solution spotlight illustrates ways in which the credit management function can continuously challenge itself to improve and transform itself in a digital world.

Top tips for clients

• Following a trend of higher acceptance rates and significant credit limit expansion during 2021, approval rates across trade sectors are expected to stabilize and be supportive of the inflationary environment, but perhaps come under pressure later in 2022 as new economic headwinds bite. Our teams are available to assist you in identifying and managing any under-insured or seasonality exposures, thereby closing the gap for more comprehensive credit limit coverage.
• Clients and Aon brokers should be looking in close detail at how existing trade credit insurance policies would respond to future non-payment events linked to the ripple effects of the conflict and humanitarian crisis in Ukraine, and the imposition of trade or economic sanctions, laws, or regulation.
• In the current context, it is recommended that clients carefully review terms and conditions, and seek legal guidance as appropriate, to ensure the scope of coverage is fully understood. Specifically, Policyholders are encouraged to:

• As business need to navigate increased Political Risk and Political Violence issues, our Interactive Risk Maps are Aon's benchmark review of the geo-political and terrorism risks global corporations face and can be accessed here.
• Our global Interactive Risk Maps provides a valuable guide to the insurance markets perceptions of key risks around the world. Specific risks featured in the map include government interference, legal and regulatory risks, sovereign non-payment and supply chain disruption.