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Reinsurance leaders show greater risk appetite since pandemic: Aon

1st October 2021 - Author: Matt Sheehan

New research from Aon shows an increased appetite for calculated risks within the leadership of the re/insurance industry, with nearly 90% of executives expecting business conditions to be stronger a year from now.

More than 18 months since the global outbreak of the COVID-19 pandemic, Aon surveyed 800 C-suite leaders and senior executives in the U.S., the EU, the UK and Canada to gain insight into how organizations are preparing for and responding to interconnected risks.

The broker found that a majority of respondents agreed that the pandemic exposed new vulnerabilities, driving willingness to invest in preparation for other long-tail risks

Roughly 80% of leaders said the pandemic experience has increased their companies’ appetite to take on more risk and make investments in order to build resiliency for the future.

And executives generally expressed a desire to take on new risks relevant to financing and capital investment, with 55% of respondents expressing interest in raising new capital, financing or debt and 50% of respondents open to investing in new technologies.

At the same time, about four in five leaders now estimate growth in the year ahead and 40% expect double-digit revenue growth. And among the 38% of leaders who indicated they were “very prepared” to deal with the pandemic, 55% estimated double-digit revenue growth.

“We are at an inflection point where businesses are not only focused on overcoming the current challenges we are facing, but shifting to think about other long-tail risks and how to prepare for them,” said Greg Case, Chief Executive Officer of Aon.

“As leaders look at the future of their businesses in an increasingly volatile world, the pandemic has reshaped their views of risk and sharpened the importance of making better decisions. The past year has given leaders the insight they need to understand the dynamics of long-tail risks and the need to be better prepared, sparking optimism for what lies ahead.”

However, Aon did warn that its survey indicated a disconnect between the outlooks of C-suite executives setting the strategy and the people on the ground executing that strategy.

For instance, only 12% of C-suite leadership felt their company was unprepared for the pandemic, compared to 22% of senior executives.

But both of these groups were found to be placing more value than ever in models, analytics or data science tools, with 61% of respondents maintain that these factors are key to ensuring their company makes better decisions.

Among stronger companies, 61% also stated they are very confident they have the ability to analyze available data and information to make sound decisions going forward.

“Our research shows that executives are confident in the future and have prioritized the need to be better prepared for risk in the wake of the pandemic,” said Lori Goltermann, Chief Executive Officer of Enterprise Clients at Aon.

“When speaking with CEOs and other leaders through our Enterprise Client Group, these findings validate their experience and reinforce our role in delivering solutions that give our clients the clarity and confidence to make better decisions that protect and grow their businesses.”

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