MONTE CARLO (8 September 2019) – Aon plc (NYSE:AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, has launched an auction capability for the 1 January 2020 reinsurance placements as the firm continues to invest in innovative technology and bring additional options to secure pricing for its insurer clients.

The introduction of the auction capability, as part of Aon’s suite of services, can benefit insurers by reducing the timeframe around pricing negotiations and contract certainty. The technology enables pricing options through blind-bidding for both non-concurrent (where reinsurers receive different pricing based on the quotes provided) and concurrent placements (where the technology identifies a consensus bid, so each reinsurer receives the same price for the layer).

Furthermore, insurers will benefit from continued access to Aon’s brokers as part of the auction process, who will continue to guide and manage the entire placement without the additional expense of alternative distribution channels.

Andy Marcell, CEO of Aon’s Reinsurance Solutions business, commented: “We constantly strive to transform the way we do business and enhance the placement experience for our clients. Our investment in technology gives insurers the power to choose how to secure robust reinsurance protection while continuing to benefit from their Aon broker’s commitment to client advocacy.”

Trading partners will continue to access ABConnect Placements – the e-trading platform for Aon’s Reinsurance Solutions business – to participate in the auction. This brings the benefits of a single platform for data and placement across a reinsurer’s entire portfolio with Aon –  whether via an auction or traditional placement.

ENDS

Notes to editors

How does the auction work?

1. Mutually agreed contract wording is determined prior to the start of an auction to create contract certainty
2. Reinsurers enter a single, or multiple price points, and their corresponding capacity at each price point for the layer(s) in a blind-bid
3. The insurer provides their maximum auction price point, by layer, at which they are comfortable purchasing the capacity (this is completed via the Aon broker)
4. The algorithm identifies the clearing price at which to complete the placement at or below the insurer’s maximum price point
5. The bid is binding and accepted automatically. Insurers receive a summary of final terms with the line-up of reinsurers. Brokers will confirm final Signed Lines