15%
Global reinsurer capital declined by 15 percent in 2022, principally driven by substantial unrealized losses on investment portfolios and increased catastrophe losses from secondary perils.
Capital Advisory for Insurers
Why is Capital Optimization Important?
Global reinsurer capital declined by 15 percent in 2022, principally driven by substantial unrealized losses on investment portfolios and increased catastrophe losses from secondary perils. New capital formation is limited, and investors remain concerned about climate change impact, inflation, rising interest rates and insurance claims increasing in frequency and severity.
To navigate uncertain market conditions, constrained capacity and higher net retentions, insurers need to protect their existing capital and efficiently use all sources of capital. Capital optimization is more important than ever for insurers to achieve growth and return targets while managing stakeholder expectations.
How Aon Can Help
Capital advisory works with insurance clients to enhance return on capital by matching risk with capital to make better business decisions. We develop customized strategies through a detailed understanding of an insurer’s capital requirements across key stakeholders’ expectations (e.g., rating agency, regulatory or investors) and the most effective sources of capital to achieve client objectives. These strategies are supported by robust industry benchmarking that aligns with company risk tolerances.
To respond to the evolving market, Aon launched Capital Advisory in 2018. We continue to grow our team across Finance, Rating Agency Advisory and Structured Reinsurance, which aligns expertise to support clients’ capital management strategies.
How We Work with Clients
We collaborate with clients on a holistic approach to capital management strategies working across Aon — broking, analytics, investment banking, Strategy and Technology Group — and using our scale to evaluate and access the best capital solutions.
Our exceptional client experience and expert execution, combined with our proven methodology, will result in better outcomes. Our holistic approach considers the volatility of returns, which is critical to optimizing the long-term return on capital.
Our advice is supported by:
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Technical Analysis
Technical analysis based on target capital needs
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Proven Methodology
Aon’s ability to execute the recommendation with a proven methodology
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Thorough Understanding
A thorough understanding of key stakeholders’ perspectives
Why Work with Us
Using our scale to fuel innovation in deal structures powered by our data and analytics capability, Aon has evolved from execution-only to a to become a full-service capital advisor.
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Complex Reserve Risk Deals
Secured capital, advised, and executed 40+ complex reserve risk deals involving $30 billion of reserves by a team with 100+ years of legacy experience
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New Company Formations
Advised 30+ new company formations on business development plans and through the initial ratings process
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Raised Capital
Raised capital through surplus notes for small to mid-sized regional insurers
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Insurance Captives
Setup insurance captives to manage risk-based capital requirements for global insurers
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Collateralized Whole Account Stop Loss
Placed $1 billion collateralized whole account stop loss for Lloyd’s
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Structured Reinsurance Solutions
Structured reinsurance solutions on lower layer catastrophe programs for January 1, 2023 renewals
$30B
Secured capital, advised, and executed 40+ complex reserve risk deals involving $30 billion of reserves by a team with 100+ years of legacy experience
Aon’s engagement and creativity combined with the support and commitment from one of the world’s largest investment banks, JPMorgan, is a testament to RiverStone International’s leading market presence in the legacy sector.
