Q&A: Aon’s George Attard on growth, ILS and insurtech

November 19 2021 by

Singapore-based George Attard is the Asia Pacific chief executive of Aon Reinsurance.

InsuranceAsia News (IAN) recently spoke with the reinsurance specialist to discuss growth areas for broking, insurance-linked securities (ILS) and the ongoing growth of the insurtech space.

Aon helped place the first ILS issuance in Hong Kong last month as China Re’s P&C arm issued a catastrophe bond understood to be valued at US$30 million known as Greater Bay Re.

IAN: What are some of the key growth areas for P&C reinsurance brokers in APAC?  

Attard: There are numerous areas we continue to support and partner with our clients to protect and grow their businesses. These include capital advisory and solutions, distribution strategies, navigating new forms of volatility, including systemic risks such as cyber-attacks and pandemics — and understanding and managing the risks associated with climate change.

Data and analytics remains critical in connecting risk and capital. For example, we are committed to developing our analytics to help broaden our understanding of climate, notably around forward-looking projections, and balancing insight into transition risks on the journey to net zero. Equally important as grasping the nature of the risk is how we transfer it. We’ve seen record issuances of catastrophe bonds over the last year and increasing interest for parametric covers while demand for facultative has increased as a mechanism to manage complex risks.

 IAN: What is the current state of play with the ILS market in Asia?

Attard: The ILS environment in Asia continues to advance and we expect to see new sponsors execute transactions over the next twelve months. Japanese sponsors continue to source capacity via the catastrophe bond market with 2021 (year to date) being one of the most active years of issuance for our Japanese clients. Local sponsors are taking advantage of the extremely competitive pricing environment driven by the increase of capital flowing into catastrophe bond mandates and the demand for non-US peak peril exposures.

Further, the existence of the Singapore and Hong Kong ILS grant schemes are improving the economics for sponsors by providing subsidies for the issuance costs associated with an ILS issuance. In October, China Property & Casualty Reinsurance (CPCR) became the first sponsor of a catastrophe bond issued from a Hong Kong domicile. Aon Securities structured and placed the successful issuance which provides per-occurrence catastrophe reinsurance protection against losses from typhoons.

Other Asian potential sponsors are also beginning to develop an ILS risk transfer strategy enabling them to diversify and complement their reinsurance programs with alternative capital.

IAN: How are P&C insurers in Asia transitioning to becoming more digital and how far can they take this up the commercial chain?

Attard: Insurtech continues to transform the insurance industry, bringing new efficiencies and opportunities to the incumbent model, producing superior customer experience and profitable growth. As insurers and technology firms continue to combine, an unprecedented opportunity to respond to specific clients’ needs arises.

Insurers are seeking to enhance the customer experience, improve loss ratios and boost underwriting insights – but embracing technology is critical to transition to future-proof business models and the journey can be complex. We are focusing on helping insurers match their strategic objectives with technology firms who are shifting from disruptors to enablers. Now is the time to actively seek out and utilise the power of partnerships as we continue pushing the boundaries of insurtech as an industry.

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