Decoding the reinsurance landscape
In the world of global reinsurance, navigating the currents of change demands a steady hand and a visionary outlook.
Anshuman Srivastava, the deputy head of Aon Capital Partners at Aon has nearly two decades at the firm under his belt. Forming the lion’s share of his impressive industry tenure, Srivastava’s perspective is both deeply rooted and refreshingly forward-thinking.
“I’ve been in the industry for about 22 years, and I’ve been at Aon for about 18 of those 22 years,” Srivastava told CityAM, reflecting on his journey. His initial expectation of a brief rotation ultimately blossomed into a long-term commitment within the non-marine team, a testament to the stimulating challenges and collaborative spirit he found at Aon.
“The idea was to do a three-year rotation, but when I joined the non-marine team, that’s where I stayed, so in some ways, I’ve been stuck in my third year,” he quipped.
Anshuman Srivastava
Complex needs
In his current role as Head of the Reinsurer Client Segment, Srivastava’s focus is laser-sharp: supporting the complex needs of large multinational reinsurers and Lloyd’s syndicates.
“Essentially, my clients are large multinational reinsurers, and/or Lloyd’s syndicates, with complex portfolios,” he explained to CityAM “I help and support them on their gross to net strategy, and in some cases, capital related solutions as well.” This crucial intersection of underwriting strategy and capital optimisation underscores Aon’s holistic approach to client partnership.
“Aon Capital Partners was set up with a view to providing support and contextualising the opportunity in respect of capital raising for new and existing clients,” Srivastava told CityAM. This proactive approach ensures Aon clients are well-positioned to fuel their growth ambitions in an increasingly capital-intensive market.
“From a capital perspective, we see supply at an all-time high, across traditional and non-traditional sources,” Srivastava said.
However, he cautioned that this abundance requires careful navigation. “There’s still enthusiasm, but with caution around how capital is deployed into the business. There’s caution around to manage the re/insurance cycle, and that is one of our key areas of focus – helping all of our clients to adopt the key characteristics of top-performing insurers and in doing so achieve continued profitable growth independent of market dynamics.”
Market pricing
After several years of robust pricing growth, prices have recently started to soften in the market, sparking concerns in some corners of the market that the good times of the past three years have come to an end.
However, Srivastava said, “From a pricing perspective, I think we are at 2011 or 2012 levels…” This comparison provides crucial context for understanding the current rate environment,”…although from an attachment perspective, the retro market at that point attached a lot lower in reinsurers’ programmes.”
This nuanced understanding of market evolution is a hallmark of Aon’s expertise.
The retrocession market, in particular, has undergone a transformation, as Srivastava highlighted to CityAM “Today we are in a stage where we have named territories and named natural perils only that are covered… So, retrocessionaires can be quite clear about their risk appetite and offer a more defined product rather than necessarily offering widespread coverage.” This increased clarity and specificity, facilitated by Aon’s deep market knowledge, benefits both buyers and sellers of retrocessional coverage.
Looking ahead, Srivastava said: “There’s more of a move towards convergence across insurance, reinsurance, and retro, where clients look to derive value from the best possible capital-efficient solution.” This integrated approach, championed by Aon, allows clients to strategically leverage various tools to optimise their capital and risk management strategies.
“What do clients think about today’s market; what are they most concerned about? I’d say number one is growth… And number two, I would say is earnings volatility. We are here to help them navigate volatility across their business, build resilience, and make better business decisions.” Understanding client priorities drives Aon’s commitment to delivering tailored solutions that address these critical challenges.
Talking about the general environment for insurers and reinsurers, Srivastava said: “I think we have an environment where reinsurers are more willing to concede price and then attachment over coverage.” This nuanced understanding of negotiating leverage and market priorities is invaluable for Aon clients as they navigate programme structuring and renewals.