Aon has launched a Capital Advisory unit within Reinsurance Solutions to provide a holistic approach to capital optimisation for reinsurers, Lloyd’s syndicates and captives.
The aim of Capital Advisory is to aid clients to achieve capital efficiency by accessing alternative or traditional capital or identifying opportunities that make better use of existing capitals while taking into account cost and returns.
Aon has brought together its expertise in reinsurance, analytics, ratings agency advisory, asset management, property and casualty, mergers and acquisitions, life, and capital markets.
The unit will provide bespoke advice to help clients reduce Solvency II capital requirements via reinsurance; improve insurers’ investment strategy to drive investment efficiencies, thereby uniting management of both their assets and liabilities; and optimise insurers’ capital mix.
Eric Paire, who joined the company from Guy Carpenter in March 2018, will lead Capital Advisory, which is currently based in London, with the goal to expand the offering to the US for a global approach.
Paire 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 profit and loss 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.”
Nick Frankland, UK CEO of Aon’s Reinsurance Solutions business, stated: “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.”
“We have a head start with our intrinsic knowledge of clients’ operations as their reinsurance intermediary, and can bring an additional focus on profit and loss with our specialist skills from across Aon.”