Aon: Advanced analytics are shaping better decisions in Asia Pacific

Aon’s Peter Cheesman on the role analytics are playing in helping shape insurer decision-making in the region.

How is Aon using analytics to help insurers navigate hard market conditions in Asia Pacific (APAC)?

While there are some unique, region-specific challenges, we approach our clients’ businesses in APAC in much the same way as we approach our clients’ businesses globally – seeking to differentiate them through comprehensive modelling of their portfolios, based on exposure and experience analytics. This process allows us to support and guide insurer clients through their reinsurance renewals, and through hard market conditions, helping them to navigate potential volatility, build resilience and achieve reinsurance pricing that reflects their risk and experience relative to the broader market.

We bring this robust view of risk to market negotiations for clients, utilising models that have been evaluated by peril-specific experts, and where model output is enhanced by reflecting each client’s specific experience rather than a standardised view. By giving all our clients access to such best-in-class solutions, including a wide range of models developed by our in-house Impact Forecasting catastrophe modelling team, we add value across the scope of their businesses, which includes helping them to understand the potential impacts of unmodelled/secondary perils.

We also bring this process to reinsurers, using data and analytics to contextualise their cedants’ recent losses against wider trends around exposure development, climate change and decadal climate cycles. This can help to overcome knee-jerk changes in pricing that might damage longer-term cedant/carrier relationships.

Ultimately, through advanced analytics we want to shape better decisions for all parties involved in the risk transfer process.

What developments are being made within Aon’s analytical capabilities? To what extent does AI and machine learning potentially play a role?

Impact Forecasting has developed, and continues to develop, many models in the APAC region, notably covering flood, typhoon and earthquake. We hire the leading experts in specific fields to ensure that client challenges are addressed, and long-term solutions can be developed; for instance, our dedicated model evaluation experts have scientific backgrounds and past experience at all of the leading modelling firms.

We have been leveraging AI and machine learning within Aon’s analytics function for the best part of a decade, particularly in the development and analysis of proprietary datasets. A great example of this is the converting of aerial imagery into datasets that we can then leverage within our modelling and event response solutions.

Thanks to recent advancements in AI, we are also exploring the use of generative AI to enhance clients’ experience and drive efficiency for our colleagues. It is a fast-evolving area of analytics, but we are seeing early signs that there is significant client and colleague benefit when it is harnessed in a responsible way.

How can analytics help Aon stand out in APAC, given it is such a highly competitive reinsurance market?

Differentiation not only lies in the development and delivery of cutting-edge modelling solutions for the region, but also in our deployment of dedicated and talented individuals and teams – for instance, a few years ago our analysts operating the catastrophe models also conducted the model evaluation, but now we employ groups of experts that only evaluate the models. For Aon and its clients, specialisation of this type has raised the bar compared to previous practices.

We have also embedded analytics across the insurance vertical internally and externally, which means that now all our clients can benefit from advanced technological solutions, and allows Aon to better match client need with capabilities.

What do you see as the biggest opportunities, and challenges, with the use of analytics in APAC next year?

The opportunities are to bring better, higher resolution models to our clients, and to introduce greater granularity in the exposure data provided to reinsurers. This is just part of a wider jigsaw that unites data, analytics and consulting solutions to help clients grow through the efficient use of capital, and the utilisation of effective underwriting strategies, data and tools.

Peter Cheesman is head of APAC analytics at Aon’s Reinsurance Solutions