Silos do not work in today’s re/insurance market, which is why Aon has changed its structure, Eric Andersen tells GR
Dramatic changes in the re/insurance sector are being reflected in the new structure implemented across Aon this year. Alternative capital, enhanced collaboration between insurance and reinsurance, and threats of disintermediation and disruption have risen to the fore, and are all part of the move by Aon to provide a more holistic and connected service to its clients.
Aon’s message is one of deploying capital and expertise where needed – regardless of internal business units – to serve clients globally across risk, retirement and health. To achieve this, the broking giant moved to dismantle the silos into which its business was formerly divided. It began by retiring its Hewitt brand in 2017, and in May announced the retirement of its Aon Benfield and Aon Risk Solutions brands.
Eric Andersen’s role has also changed as part of the restructure. Previously CEO of Aon Benfield, he is now a co-President of Aon and reports to group chief executive Greg Case. Eric’s fellow co-President is Michael O’Connor, formerly Aon Risk Solutions CEO. Andersen told GR that Aon’s change in structure is a direct response to calls from clients, highlighting the extent the industry has changed in recent years and that business models need to move with it to deliver a broader range of solutions.
“The ways in which capital is being brought to the client are changing, and there is a broader range of risk transfer tools to assist the process, so it’s a question of looking at the best solution for each client from across the scope of our operations,” said Andersen.
“In the past, we’ve done great work by having great people with the energy to make things happen within their own business units. However, getting those teams together to work collaboratively has been at times challenging, especially across a firm the size of Aon. We remain proud and supportive of our individual teams, but our clients need the benefits of full access to our whole company. The changes we are implementing are designed to remove the barriers across Aon to make that more easily achievable.”
It also means people from across the group will become involved with a potentially much more diverse list of clients. For instance, a healthcare business with a range of volatile risks to manage and to insure, and its own captive insurer to run, could conceivably need broking and risk advisory services from across the different divisions of the group, Andersen suggested.
This will require a profound change in mindset for many brokers, client executives and risk advisors working with clients. “Just because you’re a reinsurance person doesn’t mean you only work with insurance companies,” said Andersen.
“What we have now requires a change of mindset. Working within one silo can be limiting. We’re proud of our experience helping C-suites in almost every industry to manage volatility and think through their risks. Broadening the broker experience will also help us as we develop our next generation of talent.”
The change in model will bring other challenges, too, to maintain the bonds of trust essential with clients. “While we are removing the silos across our business, of course, we need to ensure that we treat our client information appropriately and in line with regulation – we need to be careful that clients’ sensitive data is well protected,” said Andersen.
The industry at large has a tough time ahead, but he thinks the model will get the benefits out of the macro trends the re/insurance sector is grappling with.
“Now the client has access to all the different parts of Aon working together in a more structured way,” said Andersen. “It’s an interesting time for the sector, and we will continue to develop our strategy. We’re still at the beginning of this journey, but what we’ve done is set the course for where we want to go.”