AI and talent: the profitable growth drivers for a new market cycle: Aon

Insurers are posting record returns just as premium growth becomes harder to sustain. Aon leaders explain what it will take to keep growing profitably as pricing tailwinds fade.

Key points:
Rate-driven growth becoming less reliable
Top performers investing through cycle
Talent and AI decisions become more urgent

Property and casualty insurers are entering softer market conditions with their strongest returns in years—but growth has slowed for a fourth consecutive year. As rate increases fade, executives must determine how much premium growth reflects genuine demand at acceptable margins rather than pricing alone.

“Growth is slowing,” Paul Campbell, global growth officer in Aon’s Strategy and Technology Group, told Monte Carlo Today. “Premium growth slowed in 2025. It’s been slowing for a few years now.”

Across the 120 carriers Aon has tracked since 2009, return on average equity reached 16.8% in 2025. Yet only 60% improved on 2024, down from 74%, while premium growth fell to 5.2%, its fourth consecutive annual decline. The combined operating ratio improved to a decade-low 91.1%.

The figures point to a widening gap between profitability and growth.

“Two cohorts have stood out for outstanding performance: globally diversified insurance companies and specialty insurance companies,” Campbell said.

Emma Crookes, Aon’s global insurance vertical leader, said insurer executives were now bringing growth, workforce and capital plans to meetings once centred on renewals.

“They absolutely want to talk about their reinsurances, but they also want to talk about how they are positioning themselves for success,” she said.

“It’s very dangerous to chase premium growth at all costs.”

Rate vs real growth

During the hard market, higher rates allowed carriers to report premium growth even when customers were not buying more cover. As rates soften, insurers need to separate that pricing effect from genuine demand.

“It’s very dangerous to chase premium growth at all costs,” Campbell said.

Aon attributed the stronger returns mainly to improved underwriting performance and a benign catastrophe year.

Campbell said the best performers would continue investing for sustainable competitive advantage even as market conditions became less supportive.

“The winners will absolutely be investing in redesigning their business models and their operating models for that future world,” he said.

Top performers are investing heavily in advanced analytics and technology capabilities, Campbell said, using AI to manage portfolios of risk more dynamically and get information to decision-makers faster.

“AI is definitely an enabler because it can help firms to manage high volumes of risk flow at speed, which is essential to participate in new forms of distribution and trading,” he said.

In algorithmic underwriting, Campbell expects the nature of human interventions to become  more strategic and forward-looking, requiring different skill sets and ways of thinking.

The people question is already urgent. Crookes said insurers were considering which skills their future underwriting and claims teams would need, even as some set out plans to cut staff.

 “We are engaging with our clients to examine their skills-gaps in the evolving work environment across multiple facets of their business, often on their underwriting and claims teams,” she said, adding that the focus was no longer on the medium-term but more on “tomorrow” due to the speed of AI development and the competitive edge it can deliver.  

As risk carriers, insurers also need to understand how AI exposures are emerging in the portfolios they underwrite, how to cover them and how reinsurance can help manage the risk.

Crookes pointed to the example of a global insurer seeking to double its income without reducing profitability – “which in a soft market is not the easiest challenge”.

That ambition required a much broader conversation about how the insurer was equipped to grow, including whether the client had the technology to support that ambition and how it was managing talent.

“Are the right people in place, and are they paying an appropriate amount to attract the people with skills they need?” Crookes said.

“We also advised on distribution channels, and on which markets would provide the required margin for sufficient balance sheet support.

Crookes said that conversations also centred on portfolio and capital optimisation. “We looked closely at how the client was assessing and managing risk, and how they were managing their reinsurances to enable growth.”

Through the cycle

Campbell said some carriers may respond to softer conditions by retrenching and becoming much more selective. He warned that pulling back on investment could prove costly to ongoing relevance while competitors continued spending on technology, people, data and analytics.

For Crookes, the challenge is to connect those decisions rather than treat growth, talent, technology, capital and reinsurance as separate conversations.

“It’s an interesting and very dynamic environment where all the insurers need to make sure they have the right strategy in place, the right communication plan in place, and the right talent and technology for growth,” she said.

“It’s not just about discussing what success could look like,” Crookes added. “It’s about bringing the right Aon teams together to help clients achieve that growth and make better business decisions.”

Paul Campbell is the global growth officer in Aon’s Strategy and Technology Group. He can be contacted at: paul.campbell@aon.com

Emma Crookes is the global insurance vertical leader at Aon. She can be contacted at: emma.crookes@aon.com 

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