Global broker Aon and risk modelling, data and analytics specialist Moody’s Insurance Solutions have announced an expanded casualty reinsurance collaboration, with part of the goal being to help capital more efficiently allocate to casualty risk.The overarching aim is to reduce latency and accumulation risk for casualty and drive accelerated product innovation in the casualty insurance and reinsurance sectors.The two firms have already been working together on casualty reinsurance, but now expand their work to focus on commercial risk.This will involve delivering insights into climate casualty and other emerging risks, enabling enhanced risk mitigation strategies, and in addition a focus on enabling excess casualty named-peril products to be offered to commercial insurance buyers.

“Named-peril products can help drive efficient risk transfer and insurance premium growth, as well as better casualty protection for clients at risk-appropriate pricing, the announcement explained.“This reduces uncertainty around exclusions, insufficient limits and coverage disputes.” The expanded collaboration will see Moody’s Casualty unit, which identifies and models more than 300 emerging risk perils, combining this expertise with Aon’s extensive global relationships both in the traditional and alternative capital sectors, Aon said.“This synergy facilitates the more efficient allocation of capital to risk in order to shape better business decisions for Aon clients when managing their casualty portfolios,” Aon explained.

Amanda Lyons, global product leader for Reinsurance Solutions at Aon, commented, “Traditional casualty clash solutions have struggled to provide capital-efficient coverage.“Our collaboration with Moody’s is now creating products that better reflect exposures and offer more attractive pricing for both commercial risk and reinsurance.This helps businesses make better decisions and supports reinsurance clients and original buyers in confidently pursuing growth strategies.” Robert Reville, head of casualty market development for Moody’s, added, “The increasingly volatile liability environment challenges the entire value chain of insurance – from the original buyers to their insurers and reinsurers.

“In this environment, we expect named-peril products to lead to the emergence of a casualty catastrophe market.We are delighted to work with Aon to drive such innovation in the re/insurance market.” With and more cedants looking at how to structure their risks suitably to attract efficient third-party and alternative capital, this collaboration promises to help advance this segment of the marketplace...

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