After reporting 6% organic revenue growth in its Reinsurance Solutions business in the fourth quarter of 2024, broking group Aon remains optimistic about the future of reinsurance, executives at the firm said today.
As we wrote earlier, Aon’s Reinsurance Solutions generated revenue of $351 million in Q4’24 and 6% organic revenue growth to $2.7 billion for the full year 2024.
This growth came despite reinsurance having a “modestly negative rate impact in the fourth quarter,” as explained by Aon’s Chief Financial Officer (CFO), Edmund Reese, who emphasised that this was consistent with early views of January 1, 2025, renewals, “as capital capacity, up 7% for the year, outstripped the demand.”
Reese’s comments were made in Aon’s recently held Q4’24 earnings call, during which the CFO, and President Eric Andersen, responded to a question on whether Reinsurance Solutions can continue to grow at similar levels as in Q4’24 as the market heads into bigger revenue quarters, which are more driven by treaty renewals.
“I would say, certainly, our ability to grow globally, as it is truly a global business, is something the team has been very focused on, certainly for the last five years,” said Andersen. “And we continue to be optimistic about the future of reinsurance as we go into 2025, both in the property cat space, as you mentioned, but also in what we do for casualty and specialty and facultative and strategy and technology. It’s really become a fully built portfolio of capability, not just property cat.”
He went on to underline the importance of thinking about it as broader offerings and broader capabilities than just property cat, which typically grabs the headlines.
“Certainly, there is some market impact, as you’re alluding to. I would just say that clients react to the market differently, their ability to do buy downs, aggregate covers, sideways covers, top up programs where they may have pulled back a bit based on pricing. So, it’s a pretty dynamic market, and clients optimize their portfolios as they look at the amount of spending they can do. But we’re excited about it going forward,” continued Andersen.
Expanding on this point, CFO Reese explained that these dynamics that Eric mentioned with the weighting of the portfolio, and what happens on the rate and exposure side associated with it, is embedded in Aon’s plan and its guidance.
“So, with all of that in mind, we feel very confident in the mid-single digit or greater organic revenue growth, is where I’d leave you on that point,” he said.
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