An active catastrophe bond market in the first-quarter of 2022 helped to drive “fantastic growth in the ILS business” for Aon’s Reinsurance Solutions division, according to President of Aon Plc, Eric Andersen.
The insurance and reinsurance broking giant reported 7% growth in reinsurance organic revenues during the quarter, with the capital markets activity cited as one bright spot that actually grew by double-digits during the period, as we explained last week.
President of Aon Eric Andersen and CEO Greg Case both opined on the drivers of growth for the reinsurance business, as well as how the overall reinsurance broking landscape is evolving, during the Aon Q1 2022 earnings call.
On the last few years in reinsurance, CEO Greg Case said, “It’s really been extraordinary,” adding that, “we just see so much opportunity in this space.”
Continuing to say that, on reinsurance broking, “We’re doubling down on the opportunity in this category… the quarter doesn’t reflect the continued momentum.
“7%, a strong first quarter, great capability, but we see tremendous momentum in this business and just great opportunity.”
Andersen continued to say, “It was a very strong quarter for the team.
“We had fantastic growth in the ILS business with the cat bond issuance very strong. In fact, lot of great work with clients as they look to reposition their portfolio going into the January 1 renewal cycle.
“So I would say it was very strong start for the year. I have high expectations for them as they continue to work through the existing insurance cycles. But really strong start for them.”
Overall, CEO Case said that Reinsurance Solutions revenue growth was driven by, “continued strength in retention and new business generation around the world, as we help clients navigate a complicated and challenging risk environment.”
Interestingly, Case went on to later explain that future growth comes from growing the reinsurance category and applying its expertise more broadly to commercial clients as well.
“We see a tremendous, tremendous opportunity,” Case explained. Saying, “A lot of what you see us doing is not just competing in the existing market, as it stands today, but it is truly creating net new markets. What we’re doing across the board in climate, net new market; some of the work we’re doing in IP is core market, but also net new market.
“So what we’re essentially saying is, we’re going to increase the size of the pie with the content and the analytics we have and the capability and the colleagues we have in place. We see tremendous, tremendous opportunity over time. It’s a big contributor as we think about mid-single-digit or greater growth over time.”
Andersen added, “Having global capability, having deep analytical insight, being able to deal with clients’ needs using the global marketplace, are all critical to the core of what we do today for our reinsurance clients and will continue to do.”
“The reality is we feel good that our franchise and the team very closely aligned and we continue to make investments to make sure they have cutting edge capabilities.”