Aon and Moody’s Deepen Collaboration to Improve Capital Allocation in Casualty Risk

Global insurance broker Aon and Moody’s Insurance Solutions, a leading provider of risk modeling and analytics, have expanded their existing partnership in casualty reinsurance. The goal is to enhance how capital is allocated to casualty risk, making the process more efficient.

This enhanced collaboration aims to reduce both claim latency and risk accumulation in the casualty sector, while also fostering faster product innovation in casualty insurance and reinsurance.

Although the two firms have already been working together in casualty reinsurance, the partnership will now broaden its focus to include commercial risk. Key priorities include providing insights into climate-related casualty risks and other emerging threats, supporting better risk management strategies, and developing excess casualty named-peril products targeted at commercial insurers.

According to the announcement, named-peril products can streamline risk transfer, stimulate premium growth, and offer more precise casualty coverage. These products are also expected to reduce ambiguity around policy exclusions, coverage limits, and claims disputes.

Moody’s Casualty unit, which monitors and models over 300 emerging risk perils, will bring its expertise to the partnership. This will be integrated with Aon’s broad network and capabilities across both traditional and alternative capital markets.

Aon stated that this collaboration is designed to enable more informed capital deployment, allowing clients to make smarter decisions about their casualty risk portfolios.

Amanda Lyons, Global Product Leader for Reinsurance Solutions at Aon, noted that traditional casualty clash products often fail to deliver capital-efficient protection. She emphasized that the new joint solutions with Moody’s will more accurately reflect current risk exposures and offer better pricing for both commercial insurance and reinsurance clients. These tools aim to support business growth by helping clients manage risks more confidently.

Robert Reville, Head of Casualty Market Development at Moody’s, pointed out that rising volatility in liability environments presents challenges across the entire insurance value chain. He believes named-peril products could pave the way for a casualty catastrophe market, and expressed enthusiasm about partnering with Aon to drive innovation in this space.

With growing interest in casualty-linked insurance securities (ILS) and a rising number of insurers looking to tap into third-party and alternative capital, this extended partnership is expected to play a key role in evolving and expanding this emerging segment.