Interview: Aon’s Reinsurance Solutions
Opportunity amid changing needs
Ahead of SIRC, four experts from Aon’s Reinsurance Solutions covering four
different regions sat down to discuss where they anticipate growth, and how their
clients are coping with digitisation, and regulatory developments.
Where are you seeing growth in your
RUPERT MOORE: We see a number of growth
opportunities, ranging from supporting our
clients’ efforts to reduce the ‘protection gap’
for natural catastrophe, to the development
of specialty casualty products and helping
clients with global exposures.
GEORGE ATTARD: We are seeing underlying
organic growth. This is driven by
governments’ policy pushes on infrastructure
investment leading to increased capacity
requirements across multiple lines of
business, and new product support such as
cyber, specialty casualty, health, specialty,
agriculture and life.
We are also seeing integrated treaty and
fac solutions including fac facilities as well as
increasing interest in government pools.
QIN LU: Health is the hottest topic in China’s
reinsurance market. Aon is leading the efforts
to bring together distribution channels,
product expertise, insurance and reinsurance
companies on this front. Also, protection
gaps lie with nat cat risks especially for
De-risking may create new opportunities
for the insurance industry, and specialty lines
including liability, agriculture, credit and
surety continue strong growth. Greater China
reinsurers are playing more significant roles
via underwriting expansions and mergers and
ROBERT DE SOUZA: Most clients are
comfortable with catastrophe limits hence
there has been little growth in severity covers
that would increase overall limits. Growth in
the Pacific region is coming primarily from an
increased focus on volatility covers, particularly
aggregate protections against frequency, or
quota shares to protect retained risk.
This has been helped by reinsurance
capacity being available and interested
in supporting such protections. Casualty
markets have also seen an increased interest
in D&O protections.
SIRC Today Day 2 Wednesday October 31 2018
The scope of such developments is not
limited to Japan—many clients operate techbased
products to other countries outside of
Japan. Finally, Japanese insurance companies
are not looking just at improving their
bottom line by bringing new efficiencies
into the value chain, they are also developing
complete new products based on pioneering
technologies brought by the startups.
ATTARD: We are seeing increased partnerships
between insurers and insurtech providers
across the value chain: distribution/pricing
and underwriting/claims management/
administration; embedding technology to
increase operational efficiency; and leveraging
embedded devices and the internet of things
(IoT), particularly in motor.
What new regulatory developments
are on your agenda?
MOORE: The biggest regulatory challenge
in the next three years is expected to be the
implementation of IFRS17. IFR17 does
not distinguish between life and non-life
contracts—the issue is short-term versus longterm
IFRS17 is going to have a big impact on
insurers issuing contracts with multi-year
coverage periods, mainly life and health
insurers, but also non-life insurers issuing
longer duration contracts.
The fundamental change for reinsurance
brought by IFRS17 is that reinsurance may
not directly mirror the underlying insurance
contracts. Where this is the case there may be
mismatches in the balance sheet that need to
Aon is committed to supporting clients
answering the reinsurance-related questions
and developing solutions that give our
clients the most appropriate coverage under
DE SOUZA: In Australia the Royal
Commission into Misconduct in the Banking,
Superannuation and Financial Services
Industry is still under way, with an interim
report issued on September 28 2018, and the
1 George Attard, CEO Asia, Reinsurance
2 Robert De Souza, president
Asia-Pacific/CEO Australia & NZ,
3 Qin Lu, CEO Reinsurance Solutions,
Greater China and Commercial Risk,
4 Rupert Moore, CEO Japan,
How are clients coping with
LU: Chinese insurers are big investors in
technologies. Many companies are actively
developing opportunities, ranging from
distribution, underwriting, and claims
management to reinsurance.
Second, there is investment in reinsurance
trading platforms, and early efforts to
implement blockchain into reinsurance
processes in order to achieve better efficiency,
accuracy and transparency in the future.
Finally, improvement in data quality and
transparency will also support stronger
DE SOUZA: Digitisation, the process of
integrating digital technologies into everyday
life, has become a primary focus for insurers,
especially through the appointment of chief
digital officers and chief customer officers. All
our clients, especially those with substantial
personal lines businesses, have invested heavily
in digital marketing as well as processes to
improve their service and efficiency.
Personal lines in this region is primarily
undertaken on a direct basis hence there is a
constant focus on improving their offering to
ensure their social and economic connectivity,
but especially their competitive position.
MOORE: Japanese insurers have been seeking
new products with a technological edge.
Throughout 2018 there have been multiple
partnerships between well-established
carriers and startups in blockchain,
telematics, cybersecurity or fraud detection
using artificial intelligence.