Q4 Aon Advice to Clients
Exploring Alternatives May Help You Achieve Flexibility and Price Relief
Traditional risk transfer continues to play a vital role in achieving risk management objectives. However, in challenging markets and risk situations where capacity is limited, alternatives may provide greater flexibility and some pricing relief. Partner with your Aon Team to analyze your losses and risk profile and explore which alternatives to traditional risk transfer solutions (e.g., captives, alternative retention and limit strategies, “buffer” programs, parametric triggers, and large limit facilities such as the Aon Client Treaty) may be a good fit for your risk management strategy. Where traditional insurance is the best option, partner with capital providers who may be willing to evaluate your risk on an enterprise level, making you less susceptible to appetite contraction on your lower-performing risk types.
Proactive and Robust Engagement Builds Insurer Confidence
Partner with insurers throughout the year to build strategic relationships and bring them along on your journey so there are no surprises at renewal. Even with continuous engagement, it remains important to start renewal planning early by conducting incumbent meetings to preview appetite and pricing, and analyzing data to evaluate market alternatives and explore viability. Be forthright in providing comprehensive underwriting information – especially related to risk control and mitigation practices and actions you have taken from past recommendations – but create discussion agendas that are focused on your differentiated strengths and key concerns. Highlight lessons you have learned from past claims, and actions you are taking to build resilience. Risk selection is a top insurer priority; engaging early and providing robust information will help you secure underwriter attention and responsiveness, and ultimately achieve superior results.
Quantify Your Risk to Help Avoid Potential Gaps
Asset valuation remains a top insurer priority. Remain vigilant in managing your asset valuations and coverage (sub)limits to avoid gaps. Address inflation as well as other factors such as supply chains and contractor relationships that may impact recovery and indemnity periods. Describe your valuation methodologies in detail. Insurer confidence in your approach will not only reduce time-consuming follow-up queries but also results in superior pricing outcomes. While Property valuations have been in the spotlight recently, it is equally important to work with your Aon Team to conduct quantitative assessments of your Liability exposures and limits, taking into account not just revenue but also changes in your operations, geographic footprint, size, etc.
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