‘Absolute clarity’ over strategy key to success, says Aon

Reinsurers that are crystal clear about their strategy are the ones which will outperform rivals in a softening market.

Key points:
Broker’s three key success traits  
Don’t be vulnerable to acquisition
Role of AI in future underwriting

So says Paul Campbell, global growth officer at Aon’s strategy and technology group.

“Strategic clarity is key if you want to thrive in a softening market,” Campbell told Monte Carlo Today.

Campbell, who has been with Aon for 22 years, bases his thinking on data the global broker has crunched on 120 re/insurers over the past 20 years, representing about $2 trillion of gross written premium.

And it is not just a question about being laser-focused on your company’s strategy but also being clear about what types of business you do not want to get into.

“We can see some common trends in the carriers that outperform the market over time,” Campbell told Monte Carlo Today. "The most important trait is absolute clarity over strategy and making difficult choices over where they should not be... reinsurers should avoid an opportunistic or tactical approach.”

“Speed and responsiveness… really score competitive advantage.”

Both reinsurers and specialty insurers have been absolutely clear about their strategy have outperformed the market.

Campbell said it was not so much a question of woolly thinking that has cratered some of the biggest names in the re/insurance industry over the years, so much as standing still which leaves you open to acquisition.

Campbell identifies three traits common to reinsurers that have outperformed the market: speed and responsiveness, understanding client needs and harnessing data and technology.

“You need to respond swiftly to trends that are out there,” said Campbell. “The world is changing fast and becoming more complex, and that creates opportunities to create new products. Having speed and responsiveness to bring new products to market and really score competitive advantage.

“Investing in gathering and structuring gathering data, using AI to generate useful insights to really understand clients is really important.”

The rise of automated and augmented underwriting and algorithmic underwriting means that it’s very important for carriers to have clear strategies about how they will respond in the market, said Campbell.

However, Campbell does not see humans ever being written out of the re/insurance equation, despite the apparent launch of at least one fully AI underwriter without any human involvement.

Said Campell: “I can’t see humans ever being replaced fully by AI. I have grown to understand and appreciate why this is a people business. Trust and loyalty are very important facets. Human behaviours are a really important part of how to outperform in a market cycle.”

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