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Chief Executive Officer
Aon Re Global Fac
London

Director, Asia, Pacific, Middle East, Africa

Director, Northern Europe

Senior Vice President, Americas

Head of Fac, United Kingdom

In 2007, Aon formed Aon Re Global Fac as an ambitious, globally integrated team providing clients with consistent access to a network of local experts coupled with a global service model.

One of the team's first successes with a global client was one in which it customized its approach to align with a major insurer's business model, managing from a central location while forging relationships with the client's regional teams.

The client also charged Aon Re Global Fac with developing a system that would improve management reporting and minimize inconsistencies in data capture. Aon Re Global Fac's CEO Elliot Richardson managed the global team responsible for outlining a strategy and executing it on the client's behalf.

"Not only did we have to create a flexible solution," notes Richardson, "but we also had to ensure it met their needs on both a local office and global basis." Of note, he adds, the system that was created is now being described as the standard for the facultative market.

Adds Richardson: "Our approaches gave our client the ability to price capacity at a specific amount and use their purchase power to effectively manage expenses. We continue to work in partnership with the company, managing the program daily."

The Aon Global Fac team assists with oversight of claim and premium payments, communicates with Aon's field team and monitors the performance of each facility.

In Europe in 2007, Aon Re Global Fac put a reinsurance program in place for the captive of a large corporate organization enabling the group to get protection for product recall, financial losses and loss of image. The creative risk problem solving comes from the structure of the program that keeps at a minimum transfer costs and frictional costs and enables maximum flexibility for the client.

In the Americas, Aon says it's the market leader. "We are working with other global clients based on our success and have already made significant inroads to assist these customers," says Derek Talbott, senior vice president, Americas.

Praise for Aon Re Global Fac is not hard to come by.

"They are rather unselfish and allow us to get close to their customer as there is a high level of trust," says one party that knows the company well. "This is a win-win situation as all parties from client, reinsurance broker and reinsurer work in a tripartite relationship to develop solutions for the risk group."

Adds this same observer: "The Aon team has a clear focus beyond finding the best price. They are very unique in that they get closer to the customer and consider the 'value-added' services of us as a reinsurer."

Another client cites an assignment that involved a deal that had to overcome some structural problems in the marketplace, "and their work on that assignment was a success. With a fac broker, the key is to make sure they hold up their end of the bargain."

This client adds, "Each deal is different and the requirements differ and sometimes we find that too many fac brokers fall short of what was promised and what was delivered. That's not the case with Aon."

Senior Vice President
Manager
John B. Collins & Assocates Inc. Facultative Team
Hartford, Conn.

Senior Vice President

Senior Vice President

Senior Vice President

2007 was a very good year for the Collins facultative team--its reinsurance brokerage grew more than 30 percent.

Collins' facultative clients faced several major marketplace challenges in 2007. Those clients include several of the largest highly protected risk, national account and commercial insurers in the United States.

During the year, those insurers dealt with persistently softening market prices and the need to broaden policy forms. At the same time, the year brought large fire losses and unusual weather patterns that produced many tornadoes throughout the country.

Although the industry did not see one large catastrophe, many smaller losses made it difficult for those companies to predict their loss experience for the year.

The Collins four-person facultative team is known for its highly creative approaches to dealing with these kinds of challenges. Says one client: "What makes them good is that they are creative. They bring lots of knowledge of the marketplace."

In the marketplace, this client notes, "They are liked by everyone, including the underwriters for the reinsurers and their clients. When you go with them to visit the underwriters, you come away clearly understanding what you can get accomplished and you have an answer you can have confidence in."

Adds this client: "We never get surprised in our dealings with them. There hasn't been one time when, after we wrote a deal, that it cost twice what we expected."

Says another client, one of the largest insurance companies: "If you really want something done, the Collins fac team has been great for us."

Among the creative solutions the Collins fac team put in place for clients in 2007 were excess reinsurance programs with low attachment points and buy-back deductible programs. These provided reinsurance capacity for frequent losses, as well as catastrophe protection at competitive pricing. As a result, the insurers could smooth out their net loss experience. In addition, they were better able to protect and defend their business and compete for new business.

Collins fac's experience in property facultative is built from a platform of primary and reinsurance underwriting, claim handling, actuarial, brokering, finance, strategic planning and business development.

To go along with its expertise in individual risk, Collins fac places and has developed monoline programs and treaties.

Executive Vice President
Benfield
New York

Benfield scored a bit of a coup last year when it hired Jeremy Goodman, the CEO of Cooper Gay North America, to head up its Global Facultative Solutions team.

In his new role, Goodman advises the facultative team on structures and strategies to solve particular client problems and coordinates the facultative initiatives at Benfield.

Clients call Goodman "relentless" and point out that his analytical abilities and resources make him and Benfield a growing force in the fac marketplace.

One client cited the work of his team on handling a large property cat risk in the Caribbean as an example of creative problem-solving. In addition, another client adds, "he's always reachable."

Team Leader Australasia and South Africa
Benfield
Sydney, Australia

Another newcomer to Benfield, Lazarus joined the firm last year from Guy Carpenter. He also had stints at Cooper Gay and Aon Re. Lazarus is characterized by one client as a "tireless advocate for his clients. It's the rare facultative broker that can cultivate a close relationship with his reinsurers."

The job for the facultative broker, from a cedent's point of view, is to come up with a creative solution to an often difficult problem and then convince the markets that the proposed solution will work. Underwriters frequently favor treaty brokers who succeed because they understand the needs of the markets and try to present the cedents as meeting those needs. Fac brokers have to work the other way, often using a variety of resources from the brokerage firm and investing lots of time into the deal.

"It's a tough task and Michael seems to be able to handle it very well," says one client.