Reinsurance Broker unveils new technology to help clients in next year’s renewal

Reinsurance Broker unveils new technology to help clients in next year’s renewal

Reinsurance Broker, Aon has announced the launch of auction technology which it is making available for clients to use at the upcoming January 2020 reinsurance renewals.

The company said that it will continue to invest in technology developments as a way to provide additional options to help secure pricing for its insurance ceding company clients.

Andy Marcell, CEO of Aon’s Reinsurance Solutions business, commented on the

news, “We constantly strive to transform the way we do business and enhance the placement experience for our clients. Our investment in technology gives insurers the power to choose how to secure robust reinsurance protection while continuing to benefit from their Aon broker’s commitment to client advocacy.”

Aon said that the auction technology can help clients to reduce the timeframe surrounding pricing negotiations and contract certainty.

The platform will allow blind-bidding for both non-concurrent (where reinsurers receive different pricing based on the quotes provided) and concurrent placements (where the technology helps by finding a consensus bid, so each reinsurer gets the same price across the layer).

Aon said insurers will continue to benefit from access to its brokers as part of the auction process. Brokrs will guide and manage the entire reinsurance placement for clients, but Aon said it will reduce the expense of alternative channels.

Trading partners will access auctions via the brokers Abconnect Placements reinsurance placements e-trading platform.

Aon said this means a single platform that provides data and placement across a reinsurer’s entire portfolio, whether through an auction process or a traditional reinsurance placement.

Brokers were always destined to add placement technologies to their toolboxes, as they need to compete with distribution other independent providers.

Offerings such as Tremor’s programmatic risk auction and placement marketplace are already gaining traction, having placed a number of programs and received broad backing from industry participants.

It raises interesting issues around the use of algorithms for pricing that are set by a broking house, but the result of this should be increased transparency, as we’re sure cedants will need to ask a lot of questions before placing business through the system.

The question of whether the placement of reinsurance and the transaction itself could eventually move further out of the control of brokers remains, as technology provides input to the optimisation of placing risk with capital.

But in coming out early with an offering Aon aims to demonstrate how this can benefit its clients, which should only boost prospects for others creating auction and exchange technology platforms for the reinsurance and risk industry.