Data, creativity and capital define Aon’s APCIA outlook

Aon’s Amanda Lyons and Tracy Hatlestad outline the latest dynamics in the casualty and property sectors as the industry convenes at APCIA.

Key points:
Property momentum with buyers
Casualty caution persists
Innovation fuels solutions

While property buyers sense momentum shifting in their favour, reinsurers, particularly in casualty, remain cautious but optimistic. Amanda Lyons and Tracy Hatlestad, respectively global product and property leaders for Aon’s Reinsurance Solutions, suggest that irrespective of the point in the market cycle, the real story is how risk and capital are being matched more creatively.

“Reinsurers are optimistic about the front-end pricing in casualty, but still cautious about whether they have seen the last of the adverse development,” Lyons told APCIA Today.

On property, Hatlestad sees momentum shifting toward buyers. “Market dynamics are now moving in favour of buyers, and we expect terms, conditions and pricing will further move in their favour at the 1/1 renewals,” she said.

After the January wildfires, catastrophe activity has been relatively contained, leaving reinsurers’ balance sheets intact. Earnings have held up, capital has returned and demand from cedants for reinsurance is expected to rise by mid-single digits in 2026. Hatlestad is confident the market can absorb it.

Casualty optimism

Here the story is more complex; Lyons said little has changed since mid-year. Primary rates are rising, but claims inflation, litigation funding and a continued increase in lawsuits are keeping reinsurers on edge.

“I sense that will be a big topic at APCIA with discussions around addressing areas such as legal system abuse and tort reform where needed to drive substantial change.”

That dual focus of opportunity and caution ran through Aon’s message at this year’s Rendez-Vous. For Hatlestad, the property sector’s ability to harness technology is central. “We recently published our Global Catastrophe Risk Management Survey, and it was interesting to see the variety of ways insurers are engaging with technology,” she explained.

“There’s still uncertainty, but we can’t let that stop innovation.” 

For Aon, this crystallises where it can add the most value, whether through data augmentation to support exposure capture or using claims information to build customised views of risk for insurers. “The technology available now makes this more robust and sophisticated, and we are investing heavily in that space.”

Hatlestad pointed to Aon’s Event Analytics solution as an example. “It will include exposure and real-time loss information in a more seamless way and brings together the component parts of catastrophe risk analysis clients value most into a single platform.”

Innovation in focus

Aon insists on innovation. Lyons highlighted how record levels of capital were helping fuel innovation. “Cyber is a great example. Clients with well-performing portfolios were struggling with attachment points and concerns over basis risk around event-based products.

“We worked with creative reinsurers to develop a product that allows clients to recover losses within a time period where there’s an influx of claims, thus removing the issues around event definition. Clients are really excited about that kind of innovation.”

She also highlighted work on a named-peril casualty product targeting emerging risks such as PFAs, microplastics and climate litigation. “The tools and data are getting better, so clients can at last monitor those exposures in their books. The natural next step is to use reinsurance as a tool to manage them.” New research from Aon and Moody’s shows how responding to customer need has the potential to create a reinsurance casualty cat market of around $5 billion annual premiums and drive profitable growth.

Both stressed the conference provides the perfect platform to test appetite for such innovation, and Hatlestad argued that for this year in particular, clients should consider starting from scratch on their structures and look at products beyond traditional occurrence protection.

“It feels as though the adverse development we’ve seen over the past 18 months or so is slowing.” 

“We’ve seen success matching risk and capital for solutions such as catastrophe aggregates that had largely gone away during the peak of the hard market. Those are coming back and are now being executed more successfully. I expect that to continue into 2026.” She urged clients to “go out and get them priced” even if they need to make some adjustments. “I think they’ll be pleased with some responses.”

Lyons agreed, stressing creativity and openness. “It’s about pushing reinsurers on their appetite for these products. There’s still time left before year-end renewals, and lots could happen.”

The common thread is the increasing importance of good data in unlocking product innovation and structuring solutions, enabling reinsurers to price with greater certainty.

Lyons concluded that the dialogue at APCIA must balance realism with ambition: “There’s still uncertainty, but we can’t let that stop innovation.”

Amanda Lyons is chief executive officer of Aon’s Reinsurance Solutions in Bermuda and its global product leader. She can be reached at: amanda.lyons@aon.com

Tracy Hatlestad is global property segment leader at Aon’s Reinsurance Solutions. She can be reached at: tracy.hatlestad@aon.com

For more news from the American Property Casualty Insurance Association (APCIA) click here.

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