4 Credit limits

Prior to the conflict and humanitarian crisis in Ukraine, growth forecast for H1 2022 hinted towards a relatively stable recovery in risk appetite.
Contraction in approval rates since driven by the i) normalization of trade following recovery rates post pandemic and ii) impact of conflict in Ukraine.

Spending on durable goods is stalling as consumers switch back to pre-pandemic patterns. Headwinds exist from tighter monetary policy, the conflict in Ukraine and high energy and food prices.
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Each sector is directly or indirectly impacted by disruptions to supply and demand brought by the conflict in Ukraine and inflationary pressures resulting from the economies emerging from the pandemic.
Despite economic and geo-political headwinds, approval rates in many sectors are flat or improved compared to pre-pandemic levels demonstrating the insurers continued commitment to support business during these challenging times.
Steel, Manufacturing and Construction show highest reduction in approval rates and commodity prices, supply chain disruption and high energy costs begin to bite.
Retail/Wholesale and Technology sectors both show a reduction in approval rates as inflationary pressures being to weigh heavy on consumers.
Food/Drink and Agri-business both show modest declines in approval rates as higher input costs and global shortages drive up overall expenses. Continued support in this sector will be directly impacted by i) the ability of businesses to pass on costs to consumers and ii) the duration of the conflict in Ukraine.

Source: Aon TradingDesk Insights

Source: Aon TradingDesk Insights

Global approval rates have remained flat during the quarter and remain hindered by the ongoing issues relating to the conflict between Russia and Ukraine. High energy and food prices coupled with trade disruption are placing inflationary pressures across most economies, thus halting or restricting much-needed growth following the pandemic.
Approval rates in LATAM were flat in the second quarter of 2022 underpinned by continued high commodity prices and investments in productivity-increasing capabilities.
Approval rates within APAC increased; however, insurer will remain prudent as economic growth in Asia and the Pacific is poised to slow more than previously estimated this year, amid headwinds from the war in Ukraine, a resurgent pandemic, and tightening global financial conditions.
In EMEA, post-pandemic recovery has been halted by the impact of the conflict between Russia and Ukraine. Disruption to exports and supply issues, specifically in energy and food have contributed to slow growth and high inflation.