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Senior Managing Director and Chief Actuary, Americas
Aon Benfield
Chicago

Head of Aon Benfield Analytics, EMEA
Aon Benfield
London

Head of International Actuarial
Aon Benfield
London

Managing Director (Head of ERM)
Aon Benfield
Florham Park, N.J.

Managing Director, Head of Global Risk and Capital Strategy
Aon Benfield
Chicago

An Implicit Trust

Since the two big ratings agencies for the insurance industry, S&P and A.M. Best, began considering carriers' enterprise risk management (ERM) frameworks in their analyses, insurance companies have come to deeply understand the value of having a partner to help navigate how the ERM ratings process works.

As an executive at a small specialty carrier explained, his company had been "scratching their heads" for the last couple of years about how to practically implement ERM in a smaller environment. The company switched to Aon Benfield for this reason.

"It was one of the considerations before we signed on," the executive said. In particular, it was Chris Myers, who formerly worked at S&P, and team and their ability to provide "value added" ERM services embedded within the reinsurance brokering relationship. That's versus the firm's previous reinsurance intermediary, which saw ERM services as "consulting dollars."

Myers and team ended up providing the insurer with a roadmap moving forward on how to fill in the gaps of their ERM framework. The Aon Benfield team took textbook and technical knowledge and translated into concrete steps.

Fid Norton, CRO at Ironshore, had a similar experience, bringing Myers and team in to do a comprehensive review of the company's ERM framework to see how it stacked up against what A.M. Best and S&P typically look for. Norton was impressed with the "concrete recommendations" Ironshore received that "they can sink their teeth into."

"Chris is definitely the franchise there for that expertise," Norton said.

It's the team's ERM specialty that sold Aon Benfield to an executive at a regional business insurer.

"And the fact that he came in and didn't disappoint ... it was astounding," he said.

Insurers trust this Aon Benfield team for actuarial and modeling analyses beyond ratings. As one client said about Brian Alvers, he would lean on him as he would any of his internal actuaries.

"I trust him implicitly," the client said. "And I don't say that about many people."

But these fellows are more than actuaries. Paul Kaye, for example, can come up with the "holistic view," the "big picture" of CAT exposure, explained another client at a major European insurer.

It's not just about numbers, but what those numbers actually mean for the insurer in terms of how they buy reinsurance, retain risk, react to regulation, enact ERM--you name it.

Chief Operating Officer
Aon Benfield Analytics
Minneapolis

Head of Catastrophe Management
Aon Benfield Analytics
Dallas

CEO
Aon Benfield Analytics
Chicago

Head of International
Aon Benfield Analytics
London

Head of Rating Agency Advisory
Aon Benfield Analytics
Chicago

Ratings Sophistication

It's been a busy past year for Aon Benfield Analytics. They had to integrate the operations of Aon Re and Benfield, merged in November 2008, without missing a beat on their capabilities. They have also plowed forward with new modeling and number-crunching offerings and provided the stellar support that clients have come to expect.
One such offering is designed to help insurers prepare for the new focus ratings agencies are devoting to enterprise risk management (ERM). For the semi-autonomous Colorado-based workers' comp carrier Pinnacol Assurance, ERM analysis could prove crucial. As its chief financial officer, Jeff Tetrick, explained, if the insurer ever goes entirely private, it will need a rating in "short order." Stephen Mildenhall of the Aon Benfield Analytics team came to the rescue with ERM analysis to get the process going.

"To a board of really noninsurance people, it really helped them get through the process," Tetrick said.

Kelly Superczynski spent more than two years in the Paris office starting the Rating Agency Advisory Practice group for the U.K. and EMEA (Europe, Mid-East and Africa). There, she worked with a number of international clients to help them better comprehend the rating process and differentiate themselves through it. Take SCOR. Superczynski assisted the French insurer over the past two years in presenting its ERM framework to both S&P and A.M. Best. Last year in particular, "we worked hard," reported SCOR's Bertrand Bougon, learning how to score well with A.M. Best, and present ERM to their analysts.

"We are presenting to A.M. Best a very strong company," Bougon said.

The end result of course from the work of Superczynski and company is about getting the ratings analysts to see the same thing.

And of course, the assistance provided isn't all just to please an outside analyst. This team has assisted clients with hard internal decisions, decisions that could revolutionize how insurers do business. One executive at a Midwest regional insurer explained how Mildenhall and team were instrumental in changing how that company went from old-fashioned written-to-surplus ways of understanding portfolio risk to allocating risk and cost of capital by product lines.

Another client, Dr. Jack E. Nicholson, president of the Florida Hurricane Catastrophe Fund, could not rave enough about the "top-notch" assistance that Kevin Campion and team provided during the fund's annual loss commutation process--particularly challenging in 2009 as it revolved around the 2004 hurricane storms and in 2010 as well as it will involve Hurricane Wilma.

If all this isn't enough, Aon Benfield, thanks to team member Dan Dick, is one of the best in working with excess-and-surplus carriers, said Philip Vedell at Alterra.

Chief Executive Officer
Aon Benfield Investment Banking Group
New York

President
Aon Benfield Investment Banking Group
Chicago

The Return of the CAT Bond

Catastrophe bonds are back. At the end of 2008, with the collapse of major counterparty Lehman Brothers, the interest for this peculiar kind of capital-markets risk transfer dried up. But supply of capital came back in 2009, even greater than demand at times. And riding this wave was the Aon Benfield Investment Banking Group.

Formed in November 2008, this unit, led by CEO Rob Bredahl and President Paul Schultz, participated in some of the biggest capital market deals in 2009. For instance, it was in on the Blue Fin II bond for Allianz, which dumped the old total return swap counterparty structure that had gotten past bonds in trouble with Lehman's for a collateral trust structure. Then there was Eurus II for Hannover Re, which was the first CAT bond to use the tri-party repo structure, which appears now to be a new collateral structure of choice.

Going forward into 2010, the team has already participated in three-quarters of all the completed CAT bond transactions.

Perhaps it's their delivery that brings clients to Bredahl and Schultz. One such insurer--one of the world's largest property/casualty carriers--carried out its first CAT bond deal this past year, one that was oversubscribed by $175 million. That means the insurer got $175 million more in protection from the capital markets than initially planned. The reason: the Aon Benfield Investment Banking team was able to execute the deal on the planned day.

"We met the exact timing," the client reported, which was essential, he explained, because deals that closed after them turned out to be smaller than anticipated.

Perhaps it's the team's reputation and client-service skills.

Another executive, this one at a large personal-lines carrier, called the Aon Benfield team a "very solid partner" for any foray into the capital markets that provides "great counsel, great advice."

And on Schultz in particular when it comes to capital-markets deals: "He would be our first call," the client said. "He's earned our respect and admiration."

One other thing that should be considered: This team has had such success despite only recently being forged out of the Aon and Benfield teams. No small feat, reported the chief of what could be considered a competitor.

The fact that the new unit has performed as highly as it has, he said, speaks to "Rob's ability to get in there and hammer out things" to everyone's--most importantly, the clients' betterment.