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Reinsurance capacity and volatility push Aon to spur product innovation
Aon CEO Amanda Lyons said catastrophe insured losses are about $75 billion year to date versus a $114 billion average, a gap that suggests rate softening in the 10% range.
Aon CEO of Bermuda and global head of products, Amanda Lyons, said an abundance of capital across reinsurance lines is giving cedents an opportunity to reset and future proof their programmes as market volatility and macro and geopolitical uncertainty persist.
In property reinsurance, Lyons said reinsurers are still producing strong double digit return on equity, with pricing holding above 30% over the index at the height of the stock market. She pointed to year to date catastrophe insured losses of roughly $75 billion against an average of $114 billion, adding that the loss pattern indicates further rate softening in the 10% range.
Lyons also said buyers are redeploying reinsurance savings across wider portfolios to protect retentions and strengthen balance sheet resilience, at times shifting savings into other lines as capital grows while uncertainty and volatility rise. In casualty, she described a bifurcated market and said prior year loss creep is being increasingly balanced by conservative booking on recent accident years and more disciplined defense against the plaintiffs bar.
She added that emerging risks are driving uncertainty in casualty and that Aon has invested in modeling and exposure handling for clients, including potential approaches such as pricing or exclusions and reinsurance transactions. Lyons also said strong rate increases are expected through year end in casualty, with minor exceptions tied to workers’ compensation due to past profitability.