Cedants must form their own view of risk: Aon
As we move into a tougher renewals market, it’s vital that cedants develop their own view of risk, according to Dan Dick, global head of property analytics at Aon’s Reinsurance Solutions.
“It used to be that you just pushed everything through the models, everyone would look at the model results, and the reinsurance transaction would occur,” said Dick, speaking to Intelligent Insurer.
He added: “What’s important now is that companies and cedants understand how the models perform on their book, what their expectations are of performance, and what adjustments they make for things that may or may not be in the model to clearly differentiate themselves. This enables them to make better business decisions.”
Dick said that having a unique view of risk for each client should lead to a better predictability outcome on the models when an unforeseen event occurs.
“It’s essential when we go into a marketplace where capacity is constrained from the reinsurance side, that we are able to tell that story on behalf of clients. We enable our clients to develop a view of risk, own that view of risk, and be able and willing to talk to others about why it’s the best view for their unique business,” he said.
