Aon CEO: the growth to continue despite the uncertain econom

 

Thursday, Mar 05,2009, 2:55:34 PM   Click:

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5 January 2009 Monday 03:43 PM EST

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Aon CEO: the growth to continue despite the uncertain economic climate in 2009

Alyn Ackermann

CHICAGO


  

Aon will continue to develop its vast consulting firm in the next decade, but the risk society and brokerage franchises remain the "foundation" of Aon as it grows, CEO Greg Case said in an interview with BestWire.
  

The case stated that he did not know how "unprecedented" global economic situation will affect insurance rates in 2009. He also noted American International Group should remain an important partner Aon in the years to come, and that some criticism of AIG shares in the fight against the companies to preserve is unjustified.
  

Case said of the essential elements of the company Aon will not change, even if it develops and adapts to global economic problems and opportunities.
  

"The absolute value, strong bases Aon is very rooted in the ground at risk, understanding risk, risk management, insurance brokerage," said Case. "This foundation will continue to be fully important and primary to all efforts of Aon. In addition to this not as a substitute for many things, we will try very hard to continue to expand our ability to advise clients. "
  

As part of this effort over the past 12 months Aon has been shedding subscription and lines of business, and made a huge investment in the acquisition of reinsurance broker Benfield Group Ltd and Gallagher Re in 2008. The case has also been significant reorganization of the company (BestWire, Dec. 2, 2008).
  

"We have repositioned Aon to focus on what we believe are two of the most important issues in today's global economy, risk and human capital ... We think it's a space in the global economy, with many opportunities, "said Case.
  

Included in the priority is the ability to provide its clients with expertise in capital management and capital leadership ", but the case has suggested there is a limit to how far his heart Aon business moves .
  

"We believe there is so much opportunity in these two areas that we do not need to go much further," he said.
  

As part of the $ 1.43 billion acquisition Benfield, Aon announced between 500 and 700 posts will be deleted in all reinsurance transactions. The case stated that "obviously there is some overlap" by combining the units, but the effort will focus on "costs other than wages and benefits, so as to minimize the impact on our colleagues. "
  

"Any decision in respect of colleagues will be based strictly on a meritocracy across the combined organization," he says.
  

In 2009, Case said Aon is likely to add capabilities that are "much smaller, add-on acquisitions."
  

"The pace of liquidation as it winds to be," he said. "We're not so concerned about this."
  

The case stated that the insurance industry worldwide is facing a combination of global economic recession and a huge strain not only on the liabilities, but also as an asset, investment, balance sheet. "
  

"In talking to customers around the world, hearing words like" unprecedented "," not seen before "," never in my life, "are actually the norm for the time being, unfortunately," he said.
  

The case stated that "the capital of the industry continues to be under enormous pressure," but only "not from the wind and the earth shake, but rather on the balance sheet."
  

"The global pool of capital supporting the insurance is in sharp decline, and that is to put pressure on the entire system," he said. "We'll see how the rate of progress we have finished the year and to obtain in 2009. "
  

The case said that, like other large intermediaries, Aon has incurred significant costs in handling customer issues and questions in the wake of the near bankruptcy of AIG and federal rescue in recent months (BestWire, Dec. 24, 2008).
  

"This is a significant amount of increased work, but we believe we have to move," he said.
  

He said that historically, AIG was "in the lower part quadrille" insurers on compensation of intermediaries, and that Aon and AIG are negotiating on compensation issues.
  

"How is that going to be their challenge," said Case. "What we are pleased that we will be able to find solutions for customers. This is the role of Aon. Hopefully this includes AIG."
  

However, the case has stated that his intention is to continue the Aon-AIG relationship.
  

"Our goal and objective is to get the best value for the price for our customers because they believe that their risk needs, and AIG continues to be a very important source for that," he says.
  

The case of complaints from the direction of some competitors insurers AIG is irresponsible that the lower rates to retain business.
  

"A lot of motivation," he said. "In the context of AIG, one would suspect they want to earn a return on capital over time, especially in the current environment This makes it very difficult to do what all (they are), describing ".
  

He said that "of course" there are situations in which AIG is severely cutting rates to retain business, but "there are also situations where others do the same."
  

Aon is the largest broker in the world based on 2007 brokerage revenue, according to the best in the annual ranking of the overall review brokers.
  

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