Aon began life in 1982 when Ryan Insurance Group merged with Combined International Corporation and was introduced as
Aon to Wall Street in 1987.
Simon Miller talks to Dominic Christian, CEO of Aon UK, about international insurance, cyber-crime … and gnomes
What is good about the industry?
The team-based culture, the friendships that are forged, the style and calibre of the people who are part of it. The modern industry houses such a range of expertise, from brokers to engineers, catastrophe modellers to actuaries and analysts, that it is appealing to a wide range of people with a host of different qualifications and interests.
What don't you like?
We need to work on improving our external image. Insurance and reinsurance are fantastic industries but they aren’t entirely sure, at times, how to express their qualities. Also, we need to be more competitive, particularly as regards the collective expense ratio of the industry.
How difficult is it dealing internationally?
From a technology perspective, it’s as easy now as it has ever been. Just think of the speed, ease and relatively low cost of communicating with colleagues all over the world. From a regulatory perspective, we work in a global industry with a good level of harmonisation. For instance, Solvency II, introduced across the European Union this year, applies common standards to all insurers and reinsurers operating in the EU marketplace. It also recognises “equivalence” – that is, making it more straightforward for EU firms to do business with companies in other jurisdictions if their regulatory regimes are considered sufficiently robust.
How has regulation affected the industry/your business?
Significantly as we know, with much of it, but not all of it, for the better. The issue of advised and non-advised sales is currently front of mind.
On a general note, you will often hear commentators say that over-regulation is a threat to our industry, and while this is true, having a strong set of checks and balances in place ensures that we remain robust and able to serve clients and consumers today, and in the future. The important thing is that regulators should be informed and knowledgeable about our sector; their decisions should be based on extensive canvassing and research, and not on knee-jerk reactions.
It is also important that we are recognised as separate to other parts of the financial services industry. This was a particular issue during the 2007/8 financial crisis, where reinsurers and insurers had to make it clear that they did not share banks’ vulnerability.
What has been the most unusual request to broker?
Truly, a few years ago we arranged gnome insurance for a number of clients, but unfortunately the market never grew.
Why did Aon start looking at cyber-crime?
Given the proliferation in the use of the internet, data storage and technology, all businesses are facing a greater level of cyber exposure than ever before. We have all heard the statistics on growth in digital data – the global volume of which supposedly is doubling every two years. As one of the world’s leading risk experts, there would be something remiss if Aon didn’t bring expertise to this area.
How difficult is it to arrange cover for cybercrime?
It is a risk that requires the industry to work together to offer an insurance solution that is appropriate and effective. There are many considerations in developing an effective cyber product, such as deciding the acceptable limits of cover, exclusions, evaluation, and trigger points, that mean it will take a while for a “standard” insurance product to be able to be offered. All insurance products have to go through this process in their early stages, and it takes time for players to coalesce on the most effective product for clients. When that has been ascertained, there will be, of course, some tailoring to individual client situations.
Where next for Aon?
We cover a lot of areas, but a common factor is that we always strive to do better work for clients, helping them to understand their existing and emerging risks, and offering them the security to pursue business growth with confidence. We are constantly responding to existing client challenges, and trying to ascertain the client challenges of the future, in order that we can be prepared to assist. In terms of key areas of growth and focus over the next five to ten years, Aon has identified the following:
- US mortgage credit, an opportunity for $6bn (£4.14bn) in new limit per year
- Sharing economy creating new demand for insurers to fill coverage gaps
- Reputation and brand, the number one concern of global risk managers
- Micro-insurance with a potential four billion new customers
- Corporate liability covers
- Terrorism leveraging military-based modelling to understand risk
- Cyber, a headline-grabbing potential risk
About Aon
Founded: Aon’s fast-paced growth began in 1982 when Ryan Insurance Group merged with Combined International Corporation. In 1987, that company was introduced to Wall Street as Aon.
Size: 2015 revenue was $11.7bn, with around $1.4bn from reinsurance
Number of employees: More than 72,000 colleagues with around 3,200 working at
Aon Benfield, the reinsurance intermediary of Aon Group.
Areas covered:
Aon Risk Solutions and Aon Benfield cover all lines of insurance and reinsurance business on a global basis
