Regardless of the turbulent macroeconomic environment, the long-term trends, in terms of levels of risk, is on the rise, and as the need for solutions increases, there will be implications for demand and pricing of re/insurance, according to Greg Case, Chief Executive Officer (CEO) of global broking group Aon.
Earlier today, insurance and reinsurance broker Aon released a strong set of results for the opening quarter of the year, with organic revenue growth across the business of 5% to $4.7 billion.
This was supported by 4% and 5% organic growth in the firm’s Reinsurance Solutions and Commercial Risk Solutions units, respectively, which helped the Risk Capital division generate revenue of $3.2 billion, up 7% year on year on an organic basis.
During the broker’s Q1 2025 earnings call, CEO Case was questioned on the 5% organic growth within Commercial Risks Solutions, specifically how pricing and exposures influenced the expansion.
Acknowledging that pricing has been a key part of conversations of late, Case reminded listeners that its unit price and insured values, in terms of market impact.
“Though, I do want to highlight, irrespective of what’s going on currently, the long-term trends here, long-term trends, this is critical, are increasing, in terms of levels of risk,” said Case. “So, this is cyber, supply chain, weather, social inflation. So, at a macro level the need is increasing. That has implications on overall demand and pricing.”
The CEO went on to reiterate that Aon has described the current market as one that really reflects the current trading environment, which is generally more buyer friendly.
“And so, generally, because there is no really macro market here, it’s a bunch of micro markets, property rates are softening a bit, particularly in large property in the US, and a little bit more in Asia Pacific as well. And that’s really, by the way, not surprising, that’s where the big increases were. A bit softer on the financial line side and cyber as well, overall.
“The exception, by the way, on the other side is things like US auto and excess casualty, which again, lots of different reasons why that’s going up and increasing. And we would say middle market, similar conditions on the stresses, absolutely. Maybe it’s slightly more muted, because the segment doesn’t have the same peaks and valleys as some of the large market pieces, but certainly the same pressures,” said Case.
Given the ups and downs in different parts of the market, Case underlined that Aon is working with clients to understand the conditions and improve their programmes.
This includes things like changing limits and buying coverages buyers “lost in the hard market”.
“And then, one of the things that was interesting is alternative risk transfer continues to be highly prevalent and the work we’re doing with reinsurance in the commercial risk arena is substantial,” continued Case.
Expanding on the company’s reinsurance operation, Case said that it’s no different than Commercial Risk.
“Exceptionally positive in terms of what we saw and what’s indicated for the rest of the year, which is why, again, we are at that same expectation, mid-single digit or greater,” said Case.
“Net, net, think about what’s going on in reinsurance right now for us. We’re building on core momentum, and really this is what we do at a segment level with our clients. But really differentiating on analytics, and what we’ve invested in Aon Business Services and with Risk Capital has been really, for us, meaningful, a real tour de force.
“We’re winning more than ever before in this context on the reinsurance and the commercial risk side. And this Risk Capital construct is also meaningful. The level of cat bonds and parametric work we’re doing is exceptional and driven by Risk Capital.”
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