Aon offers “broad range of risk capital” via Alternative Distribution platform in London

Insurance and reinsurance broker Aon is doubling-down on capacity provision into the key London market, launching an Alternative Distribution platform in London to help match underwriting expertise with capacity from multiple sources.

Capacity is, of course, where the lines often blur in the insurance and reinsurance world, as major brokers act as marshals for capacity to access business sometimes through their own MGA platforms and relationships, blurring the lines between underwriter and broker considerably in some cases.

Just last week, Hyperion group announced it would be deploying group capacity through its DUAL underwriting arm, alongside existing capacity providers.

The role of the MGA within a broking focused group has always been a tricky one for the sector, but it can offer a more efficient matching of risk and capital at the same time.

Aon has announced the launch of this Alternative Distribution platform in London, to match underwriting with capacity using fronting, Managing General Agent / Managing General Underwriter and captive solutions.

The Alternative Distribution platform will encompass Aon’s Global MGA & Portfolio Solutions businesses.

The new platform has a new leader as well, with Aon hiring Graeme Rayner, joining the company on January 1st 2021, as CEO of Alternative Distribution and reporting to Nick Frankland, UK CEO of Aon’s Reinsurance Solutions.

Rayner has over 30 years’ multi-class underwriting experience gained across Lloyd’s Syndicate, Company and MGA platforms.

Most recently he was Group Director of Underwriting & Active Underwriter at Pioneer Underwriters Ltd.. Prior to which he was Chief Underwriting Officer & Active Underwriter at Mitsui Sumitomo Underwriting Ltd.

Rayner has also served as Managing Director of Commercial Insurance at QBE Ins (Europe) Ltd., and held senior positions at Zurich Re (UK) Ltd and Johnson and Higgins Insurance Brokers.

Nick Frankland commented on the hire, “We are immensely fortunate to have someone of Graeme’s proven calibre joining the firm at such a moment of opportunity for the entrepreneurial underwriting model in London. His appointment and the creation of the Alternative Distribution platform reflect Aon’s commitment to meeting client needs and building a market-leading proposition in the MGA and third-party underwriting service sector.

“Through this initiative, Aon aims to facilitate and improve capital deployment in this area, at a time when the market is undergoing significant challenges and change that will create opportunities for appropriately aligned underwriting structures and organisations.”

Alternative Distribution is expected to make a broad range of risk capital available to Aon’s clients, leveraging fronting structures and other capabilities from across the broking group.

In addition, the platform will also provide the necessary supporting infrastructure for clients, including licensing and servicing resources.

It’s assumed the platform will be capital agnostic and look to connect capacity from alternative or insurance-linked securities (ILS) markets with clients, as well as traditional capacity providers.

It is both a strong commitment to the London market and also a potential threat to it as well, as Aon’s client breadth and reach means this Alternative Distribution platform could see significant premium flow, which could potentially take away from business that flows to destinations such as Lloyd’s as well.