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Aon Announces Zero Collateral Deductible Program to Help Organizations Maximize Liquidity

Posted on 11 May 2011

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Aon Risk Solutions, the global risk management business of Aon Corporation announced on Tuesday the Aon Zero Collateral Deductible Program, a one-of-a-kind, balance sheet-friendly alternative to traditional collateral programs, for its U.S. clients.

"When we decided last year to invest in the creation of Aon GRIP Solutions, we did so with the objective of increasing the value our clients receive from their carrier relationships," said Eric Andersen, CEO of Aon Risk Solutions U.S. "The Aon Zero Collateral Deductible Program is a shining example of how our commitment to partner with carriers to develop unique and impactful products can benefit our clients, and the first of many to come."

Aon is partnering with QBE, a leading insurer, to offer this program. In lieu of traditional collateral requirements, organizations will be charged a one-time, upfront fee based upon their credit worthiness to assume the credit risk for the life of the program. This approach helps businesses create budget certainty as it removes the anticipation of unknown future collateral needs.

For organizations that are approved, the Aon Zero Collateral Deductible Program will:

    •    Eliminate costly line of credit fees
    •    Maximize liquidity by unlocking credit line capacity and capital-backing collateral
    •    Remove risks of untimely collateral adjustments
    •    Eliminate challenges associated with carrier negotiations around collateral release

"In this challenging economic environment, collateral considerations are at the forefront of our customers' minds due to limited availability and associated costs," stated Tom Fitzgerald, an executive vice president with Aon Risk Solutions. "This product can significantly alleviate that burden and help organizations of any size maintain and enhance their strategic operational flexibility for future growth."

Michael Scala, president of intermediary distribution for QBE in the Americas, added: "We are keen to partner with organizations that take risk seriously, and are proud to have developed a risk solution with Aon that provides security for our clients and flexibility to their balance sheets."
Organizations must have expected annual losses of no more than $5 million and a targeted minimum credit rating of BB+ (Standard & Poor's) or the equivalent to be eligible for participation in the Aon Zero Collateral Deductible Program.