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Introduction
Aon's Credit Solutions Chief Broking Officer reviews market dynamics and client trends
Welcome to our Q3 2023 Market Insights report which considers the evolution in the credit insurance market so far this year and highlights some of the key trends for the remainder of 2023.
The outlook for the global economy remains under a close negative-watch and as credit conditions tighten, liquidity will be harder to come-by, leading to higher levels of business failures and possible domino effects through contagion. As anticipated, global trade credit carriers are reporting increased claims ratios so far in 2023. Carrier appetite has remained healthy with total potential exposure levels in the market remaining at historic highs. As the year plays out, we might expect credit insurance pricing and capacity to adapt quickly to the economic cycle, as insolvencies and associated covered claims accelerate.
Earlier this year the market experienced a significant loss event through the failure of Brazilian retailer Lojas Americanas. Confidence in the banking sector was also shaken firstly by the failure of Silicon Valley Bank (SVB) and subsequently the government-brokered deal of UBS buying Credit Suisse. Such events will form part of a new reality that the credit solutions market will have to dynamically adapt to, whilst driving higher demand for solutions and capacity as Corporates and Financial Institutions look to de-risk their portfolios.
Our Q4 2022 Credit Solutions Conference brought together subject matter experts to discuss the key global economic issues, as part of our commitment to deliver distinct actionable insights for our clients. As Former Director General of UNESCO Irina Bokova mentioned at our conference: “Continued education is the foundation of human development.” This report specifically dives back into the discussion around credit solutions for banks and the key financing trends in the current volatile market.
In this edition’s solution spotlight, we also review the specific needs of Japanese conglomerates, particularly in the context of their investments across all geographies.
To conclude, I’m also very pleased to mention here that Aon’s Credit Solutions global practice has been named ‘Best Trade Credit Insurance Broker‘ at the Global Trade Review (GTR) ‘Leaders in Trade’ Awards 2023. The GTR Leaders in Trade Awards celebrate the achievements of the world's leading trade finance service providers and this is testament to the dedication and ambition of our talented global team.