Global re/insurance broker Aon has launched of a new Capital Advisory unit within its Aon Reinsurance Solutions business, designed to deliver holistic approaches to capital optimisation for re/insurers, Lloyd’s syndicates, and captives.
Led by Eric Paire, who joined Aon from Guy Carpenter in March, the new Capital Advisory team will aim to help clients achieve capital efficiency either by accessing alternative or traditional capital, or by identifying opportunities that make better use of existing capital.
The unit will address ongoing challenges to re/insurers such as low growth, underwriting margins and investment income, as well as high capital requirements due to regulatory and rating agency obligations.
Aon said that the Capital Advisory team brings together expertise in reinsurance, P&C and Life, Analytics, rating agency advisory, asset management, M&A and capital markets to advise clients on reducing Solvency II capital requirements via reinsurance, improving investment strategies, and optimising insurers’ capital mix.
“In a low interest rate economy with pressure on returns, we are committed to working with insurers as their strategic partners to optimise the capital supporting their businesses,” said Nick Frankland, UK Chief Executive Officer (CEO) of Aon’s Reinsurance Solutions business.
“We have a head start with our intrinsic knowledge of clients’ operations as their reinsurance intermediary, and can bring an additional focus on P&L with our specialist skills from across Aon,” he added.
Paire also commented: “There is no single move, no silver bullet, that will restore insurers’ profitability overnight. It is all about fine tuning and optimising the various components of the P&L and the balance sheet for increased operating and financial margins, and an enhanced capital mix, while reducing volatility and allocated capital for a lower cost of capital.”
The Capital Advisory team is currently based in London, but Aon said that its goal will be to expand the unit’s offering to the U.S for a global approach.
