Question

After suffering several non-payment losses, a business services company wanted to ensure their ambitious growth could be confidently sustained. Their largest client requested extended credit terms to 210 days (where payment for each invoice was made over 6 equal monthly instalments). The typical payment terms for other customers were 30 days from invoice. As a Credit insurer broker what is your proposed solution?

Answer 1

Solution:- Lets take an example of AON Empower Results to understand properly-

As a credit insurer broker the AON credit soluiotn team arranged for a banking partner to provide an innovative fancicing facilty.AON worked with an insurer to help them understand this specific credit risk and apply a special policy endorsement to ensure that all client credit term requirements could be met.

Giving the clients experience of losses, AON also made sure that they were able to fully benefit from the insurer's in hose collection team operations.

Before engaging the insurance market we asses your total cost of risk (TCOR) by analysing data and developing financial model.Below diagram outlines the key steps we follow to ensure that our proposed solutions are fully aligned to your risk profile and credit management strategy.

1	Needs Analysis: In depth assessment of your business objectives and requirements ,both in the short & longer term.
2	TCOR profiling & financial modeling: Credit risk analysis of your receivable portfolio ,focusing on the optimum level of risk transfer ,risk retention & resource/capability.
3	Solutions:Full cost –benefit analysis of appropriate programme structures & solutions ranging from self – insurance to excess of loss structures.
4	Solution Benchmarking & Selection : Full global insurer market review & identification and selection of appropriate solutions.
5	Implementation: Full implementation of your chosen solutions with credit insurance policy management training and support.
6	Servicing: Performance against KPI’s and service level agreement.