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Andy Marcell, CEO of Risk Capital and CEO of Reinsurance Solutions at Aon, talks about why he is excited by the progress being made in Asia Pacific.
Has the hard reinsurance market started to soften in Asia Pacific (APAC)?
It goes without saying that APAC is an enormous and incredibly diverse region. It includes the complex markets of China, Japan, Singapore and Australia to name just a few, which are all very different and unique environments. While Japan is quite stable, there have been quite a lot of corrective actions in Asia. Australia has been under continued pressure, and we expect that to continue. But in the last renewal cycle, across the region, we didn’t see a dramatic change.
How is Aon able to stand apart from competitors – are data, analytics and access to capacity being brought to bear?
We excel in all these areas, but ultimately it’s the talent and commitment of our colleagues, both regionally and globally, which results in the huge range of solutions and services we can use to shape better business decisions for clients. I would also add that as a firm, we have incredible international coverage – and therefore have many market-leading businesses in the APAC region. With our one brand, global network and Aon United ethos, clients all over the world have access to leading regional and global capabilities, with industry horizontals – mutuals, global, regional and other types of insurance companies – intersecting with our many product verticals across the spectrum of Risk Capital and Human Capital.
If we were to highlight specific areas, where we really lean into the APAC market is in our facultative business, where we see continued double-digit growth. This is being driven by major themes such as changes in the property construction and renewable energy sectors. Generally, it’s a very healthy time to be in the facultative reinsurance and treaty reinsurance markets in APAC.
Is Aon’s Strategy and Technology Group making an impact in APAC?
With the structural changes in the APAC reinsurance markets and the increase in retentions, in a riskier world w e’ve seen many clients with more retained volatility. We are helping them to navigate that volatility and manage their access to capital.
That is where Aon’s Strategy and Technology Group comes in. It brings together insights and software, giving clients access to the best capital management tools, pricing and reserving capabilities, and strategic consulting. Our services have emerged rapidly to help solve companies’ challenges. The group’s growth has accelerated significantly in the US and Europe, and this is now starting to happen in APAC. It is another key differentiator for us.
What do you see as the biggest opportunities and challenges in APAC for (re)insurers in 2024? Are there any business lines that could be better addressed?
It is difficult to discuss trends in APAC as a whole because it is not a single entity – the region is incredibly large and diverse, with markets experiencing their own unique challenges and opportunities. But if we were to examine operational issues, the challenge for insurers and intermediaries is working out how to achieve the regional scale in APAC that enables them to solve their clients’ big challenges. Global insurance demand is going to be driven by property construction and shifts in energy demand over the next five years – that is a huge opportunity. The challenge for us is in organising our expertise and getting it to those who need it most, using distribution to connect with clients to create more value over time.
Someone once said it is better to look at the problem than focus on the solution – if you can do that then the solution will become apparent. The problem here is how best to capture the opportunity. We believe we should remain agnostic as to the source of solutions. We should – and always do – strive to create the most efficient solutions for our clients.