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Tuesday 05 October 2010
Author: Russell Group

As the run up to the 1 January renewals begins in earnest Aon Benfield, has launched a revamped Risk & Capital Strategy team to advise insurers in how best to structure their capital and reinsurance optimisation by analysing the links between risk, volatility, capital and value.

The broker said the global Risk & Capital Strategy team would “coordinate the technical and actuarial aspects of capital calculations and work with local Analytics professionals to deliver strategic business advice to clients’ senior management”.

The team will form part of the Aon Benfield Analytics operation the newly formed team will use capital modeling software, catastrophe modeling, non-catastrophe risk parameterization and rating agency expertise to advise insurers on how they should build their reinsurance programmes and examine the balance between risk appetite and pricing.

Parr Schoolman will head the team globally and in the Americas, MarcBeckers and Paul Maitland will lead the team in the UK and Europe, Middle East and Africa, and Will Gardner will lead the Asia Pacific-based team.

Mr Schoolman said: ““In the current environment, insurers need to rationalise the link between their risk tolerance, their risk capacity and the compensation received for taking risk. We have had several successful projects helping clients address this need, from setting catastrophe capacity limits to cost of risk allocations and reserve risk quantification. Building upon our track record, the formalized team will allow us to replicate these capabilities globally and help clients navigate the challenges they will face during Solvency II implementation.”

Mr Beckers added: “All European re/insurers are gearing up for Solvency II and our expertise in understanding and modeling insurance risk will be extremely valuable for our clients. The requirements under Pillar 2 of Solvency II will drive companies to better understand how risk and volatility drive value and Aon Benfield is ideally placed to advise re/insurers on those issues.”

Stephen Mildenhall, CEO of Aon Benfield Analytics, said: “Insurers are under pressure to maximize enterprise value. Aon Benfield has launched the Risk & Capital Strategy team to deliver practical advice on how to achieve this goal.The risk and capital needs of insurers vary across the world, so the team will adopt country-specific strategies with an emphasis on local issues. Regulatory and rating agency capital requirements will also be a core element of all analyses.”