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Insuring the balance sheet

Insuring the balance sheet. DACT Treasury Beurs Noordwijk November 5th, 2009. Who is Aon. Worldwide leader in Risk Management Employee Benefits (Re-) Insurance Aon Corporation Revenue USD 7, 4 Billion (200 8 ) Based in 120 countries with 500 offices

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Insuring the balance sheet

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  1. Insuring the balance sheet DACT Treasury Beurs Noordwijk November 5th, 2009 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 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 Premium A/R Credit Insurer Insurance EUR 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 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 Aon Trade Credit

  6. Aon Trade Credit Aon Trade Credit

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