aon trade credit1 insuring the balance sheet dact treasury beurs noordwijk november 5th, 2009
TRANSCRIPT
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Aon Trade Credit 1
Insuring the balance sheet
DACT Treasury Beurs
Noordwijk
November 5th, 2009
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Aon Trade Credit 2
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
– 36.000 employees worldwide, 1500 in The Netherlands
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Aon Trade Credit 3
Aon Trade Credit 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
Randstad Bank
CreditInsurer
EUR
A/R Premium
Insurance
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Aon Trade Credit 4
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
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Aon Trade Credit 5
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
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Aon Trade Credit 6
Aon Trade Credit