Aon sees Singapore ILS opportunity in new PCC structure: George Ong

With the Monetary Authority of Singapore (MAS) now having launched its awaited consultation on a Protect Cell Company (PCC) structure that will be suited to efficient insurance-linked securities issuance, collateralised reinsurance and sidecars, Regional Director George Ong of Aon has highlighted the opportunity this presents.

Yesterday, the Monetary Authority of Singapore (MAS) launched its official consultation process on the regulatory framework for a Protected Cell Company (PCC) structure that, as well as supporting captive arrangements, is focused on delivering a structure to support collateralised reinsurance arrangements, including sidecars, and efficient insurance-linked securities (ILS) issuance.

George Ong, Regional Director, Captive & Insurance, Global Risk Consulting at Aon, who is based in Singapore, commented on the news and highlighted the opportunity it presents to the market and to his company.

Ong said that the Monetary Authority of Singapore’s proposed Protected Cell Company (PCC) framework could result in a “major advancement for Singapore’s insurance and risk‑financing landscape, reinforcing the country’s position as a leading insurance, reinsurance and alternative risk transfer hub in Asia.”

He added that, “From Aon’s perspective, the framework could broaden access to sophisticated risk‑financing solutions by giving organisations a flexible, efficient pathway to captive insurance and insurance‑linked securities (ILS) without the cost, complexity and governance burden of establishing a standalone legal entity.”

Ong highlighted Aon’s White Rock vehicles, which are domiciled across offshore locations and provide captive, ILS and other reinsurance transactional structures to market participants already.

“This experience demonstrates how a shared legal structure that allows for the segregation of assets and liabilities between individual cells can enable organisations to finance, retain, transfer and transform risk more effectively, while benefiting from lower cost and operational simplicity compared with a standalone legal entity,” Ong said.

Should Singapore have a suitable PCC structure you would imagine firms like Aon might look to establish new White Rock, or other, entities in the country.

Ong said that Aon’s experience with PCC structures and alternative risk strategies, shows the relevance of the Singapore PCC plan to the global insurance, reinsurance and ILS market.

He also highlighted Asia’s protection gap and growing exposures, which a PCC structure could help in addressing by making risk transfer more available and in some cases affordable.

Ong further stated that, “Demand is likely from small and mid‑size corporates seeking a more cost‑effective solution than a standalone captive, larger corporates that prefer to take incremental steps before operating a fully licensed insurance subsidiary, and ILS sponsors looking for a more efficient structure to support their capital strategies.”

Going into the features of the PCC structure itself, Ong added, “A key strength of the PCC model is the legal segregation of assets and liabilities between individual cells. This separation helps ensure that the risks and obligations of one cell do not affect the assets of another, creating clearer boundaries around capital and exposures. For organisations, this can enhance governance, transparency and confidence that capital remains dedicated to the risks it is intended to support. For investors in insurance‑linked and other alternative risk transfer mechanisms, segregated cells provide greater clarity regarding the assets backing specific risks. More broadly, expanding access to alternative risk financing supports a stronger, more resilient risk‑transfer ecosystem and helps organisations maintain continuity and respond more effectively to emerging challenges.

“The proposed framework is conceptually similar to Singapore’s existing Variable Capital Company (VCC) structure for investment funds. Extending a comparable model to the insurance industry could further strengthen Singapore’s attractiveness as a regional hub for risk management and insurance innovation. Organisations operating across multiple markets are increasingly looking to centralise elements of their risk‑financing strategies, and PCCs can provide a flexible and efficient platform to support this objective. By broadening the range of risk‑financing solutions available, the framework has the potential to encourage greater collaboration between corporates, insurers, reinsurers and capital providers, while reinforcing Singapore’s role as a destination for innovative risk and capital management solutions in Asia.”

Ong concluded, “Ultimately, the PCC framework represents an opportunity to deepen the region’s risk‑financing capabilities, expand access to alternative risk transfer solutions and support the continued evolution of Singapore’s insurance ecosystem.”