Senior officials tell Raquel Pichardo-Allison pension services could easily be exported to suit insurers
The combination of Aon’s insurance expertise and the former Hewitt Associates’ stronghold in the pensions market, will allow the combined Aon Hewitt to better diversify its client base into the insurance market, executives at the newly formed company said.
Speaking to Global Pensions, both Yvan Legris, the chief executive for the UK, Europe, Middle East and Africa and Andrew Tunningley, head of investment consulting said officials plan to export some of their pension expertise to insurance companies.
Meanwhile the firm is also setting its sights on digging deeper into the US public defined benefit space.
The year of change
The consulting company has undergone huge changes in the past year, starting with the merger of insurance company Aon and actuarial firm Hewitt Associates in late 2010. At the same time, Hewitt was in the process of acquiring US consultant Ennis Knupp and Associates.
Aon and Hewitt announced the $4.9bn merger agreement in July, with the deal finally closing on October. Hewitt announced its acquisition of Ennis Knupp (now Hewitt EnnisKnupp) a mere two weeks after news of the Aon Hewitt merger was revealed. Aon Hewitt has $4trn in assets under advisory globally.
The Aon-Hewitt merger drastically boosted Hewitt’s expertise in insurance offerings, a pivotal service for pension funds in Europe, where many are looking for insurance-based solutions for their liability woes. Officials at the firm have found many of the same modelling tools can easily translate to the insurance market.
The merger brought together Aon Hewitt’s human resources offerings, Aon Risk Services’ insurance broking business and, critically, Aon Benfield’s reinsurance business.
“Aon Benfield are very close to an awful lot of the major insurance companies around the world. I am sure we will continue to work with insurance companies on their investment solutions,” said Tunningley.
The merger came in time to help insurance companies prepare for the stricter solvency requirements coming into force on 1 January 2013 through Solvency II regulations. The regulations will affect all insurers in the European Union.
“One of the things we’re looking at is how to take advantage of some of the investment capabilities we’ve developed for pension plans and how to apply them to insurance companies who are facing a couple of challenges,” said Legris.
“Insurance companies have their own in-house teams doing this type of thing. But what we’ve been able to demonstrate is that even for the large pension funds with in-house asset management... there is expertise that we have which we’ve been able to bring to their operations,” he added.
