Aon Trade Credit1 Insuring the balance sheet DACT Treasury Beurs Noordwijk November 5th, 2009
Aon Trade Credit2 Who is Aon Worldwide leader in –Risk Management –Employee Benefits –(Re-) Insurance Aon Corporation –Revenue USD 7,4 Billion (2008) –Based in 120 countries with 500 offices – employees worldwide, 1500 in The Netherlands
Aon Trade Credit3 Aon is risk consultant & insurance broker to Randstad Aon Trade Credit was requested to advise Randstad on credit insurance in relation to the pursued off-balance sheet financing of the receivable portfolio The objective of Randstad was the off-balance structure –In some structures a credit insurance was a condition sine qua non –This has an impact on the discount rate of the purchase price RandstadBank Credit Insurer EUR A/R Premium Insurance
Aon Trade Credit4 Insurance Issues Credit management impact for Randstad Standby facility: when to start insuring Amount covered and therefore fundable unclear over time Insured is the financial institution (ABS policy) at the moment it becomes owner of the assets Cost / Benefit
Aon Trade Credit5 Randstad Solution The receivables portfolio of Randstad is diversified in terms of debtors and industry segments Therefore comparable to the portfolio of a financial institution willing to finance the portfolio (predictability and no concentration concerns) The credit insurance market is open for solutions and has shown flexibility The discount proposed by a financial institution and amount eligible for sale should be compared with the cost for risk transfer premium of a credit insurance
Aon Trade Credit6