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New Group Formed To Help Captive Insurer and Reinsurer Profitability

Financial Document and Graph SF
September 18, 2018

The newest Aon Reinsurance Solutions advisory team will provide capital optimization services for re/insurers, Lloyd's syndicates, and captive insurers.
 
Aon said the move is in response to the current environment where re/insurers are facing challenges surrounding low growth, underwriting margins, and investment income. However, capital requirements remain high due to regulatory and rating agency obligations. As a consequence, it is becoming more difficult to generate return on common equity, according to Aon.

Under the leadership of Eric Paire, head of capital advisory within Aon's Reinsurance Solutions business, the team will help re/insurers, Lloyd's syndicates, and captive insurers with capital efficiency either by accessing alternative or traditional capital or by identifying opportunities that make better use of existing capital while taking into account cost and returns. 

Solutions will be tailored around the following areas.

  • Reducing Solvency II capital requirements via reinsurance
  • Improving insurers' investment strategy to drive investment efficiencies, thereby uniting both their assets and liabilities management
  • Optimizing insurers' capital mix 

Mr. Paire added, "There is no single move, no silver bullet, that will restore insurers' profitability overnight. It is all about fine-tuning and optimizing the various components of the [profit and loss statement] 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."

Currently based in London, the goal is to expand the capital advisory offering to the United States for a global approach.

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