Aon helps smaller players get credit insurance

Insurance broker Aon Trade Credit has launched a service to help small and medium sized food manufacturers to secure credit insurance, as the risk of payment defaults continues to mount.

Aon has teamed up with insurance provider Euler Hermes to provide Aon Tradeability, a service targeted at food companies with a turnover of up to £10M.

The service will help manufacturers secure credit insurance or alternative forms of risk management where it is unavailable. Aon Tradeability service will provide a dedicated helpline so that companies can get advice on issues including debt collections, claims and payment terms.

“We can walk food companies through the various options available to them,” said Elizabeth Jenkin, director at Aon Trade Credit. “What might be particularly useful to them is the information we can provide on their customers - including assessments and credit ratings. By tracking their customers' performance we can let suppliers know if there are any changes to their risk.

“Another advantage of having credit insurance, or similar cover, is that manufacturers can use it as leverage to secure finance from banks, for example.”

She said credit insurance enquiries had risen by about 27% compared to last year, as companies were under pressure to protect their balance sheets against a wave of insolvencies and defaulted payments.

According to a statement released by Aon Trade Credit: “The effect of supermarket dominance, particularly on independent retailers, means food suppliers could see their customers go bust without paying invoices.

“SMEs are facing a vicious circle of customer insolvency and their inability to pay invoices - in turn meaning suppliers themselves will be unable to sustain a viable business when credit is scarce.”

The launch of Aon’s service comes after Food Manufacture​ reported last week that the government was finalising plans to help struggling firms that had failed to secure credit insurance. The issue dominated much of Food Manufacture​’s third business leaders’ round table debate​ in London.