Matthew Heimermann

Matthew Heimermann inquired whether market share in the new, complex data center opportunity correlates with historical market share, given the diverse constituents, and asked about the advantage of Aon's M&A services and financial sponsor relationships in this evolving market.

Answer

President and CEO Greg Case stated that 'past is not prologue' for the data center opportunity, emphasizing the need for net new innovation and an integrated risk capital approach involving hyperscalers, builders, and asset gatherers. He highlighted Aon's privileged position to access principals and leverage M&A services and financial sponsor relationships to drive analytics and attract capital, underscoring the profound human capital opportunity as well.

Matthew Heimermann asked whether market share in the new data center opportunity correlates with historical market share, given the different constituents driving investment. He also inquired about the advantage of Aon's M&A practice and relationships with asset owners and financing parties in this data center opportunity.

Answer

CEO Greg Case stated that 'past is not prologue' for the data center opportunity, which involves new constituents and demands net new innovation, highlighting Aon's integrated Risk Capital approach. He emphasized that the race is just beginning, and Aon's prior investments in an AI-embedded ABS platform and Risk/Human Capital structure were preparations for this market. He affirmed that accessing principals at the top of the house is fundamental, allowing Aon to help them understand integrated risk management strategies. He highlighted Aon's privileged position through its M&A services, financial sponsors relationships, and work with various stakeholders, stressing that Aon's analytics are crucial to convince capital to buy down volatility, making it a 'tour de force' of analytics, Reinsurance, and Commercial Risk, with a profound Human Capital opportunity as well.

Matthew Heimermann inquired about the interplay of cross currents affecting the employee benefits business, such as cost push, slower labor market growth, and cost management efforts.

Answer

Powell Brown, President and CEO, explained that smaller groups often receive per-head-per-month compensation, so flat employment means flat commissions. Companies are modifying plans (e.g., limiting GLP-1 coverage for weight loss) to contain spend. He emphasized strategic, multi-year cost management and Brown & Brown's capabilities for customers of all sizes. Andrew Watts, CFO, added that these trends have been anticipated since the ACA.

Matthew Heimerman inquired about the initial uptake of private flood products and their ability to offset demand not fulfilled by the Write Your Own program, and how various cross-currents affect the employee benefits business from a subject premium standpoint.

Answer

CEO Powell Brown confirmed the company's historical private flood business and recent acquisition of Poulton, cautioning that private flood isn't a universal solution. CFO Andrew Watts clarified that private flood is written under a separate carrier, not the NFIP-aligned Wright Flood platform. For employee benefits, Powell Brown explained that smaller groups (under 100 lives) are impacted by stagnant headcounts due to per-head compensation, while larger groups focus on containing spend by modifying plans (e.g., GLP-1 limitations) to maintain quality coverage amidst rising costs. Andrew Watts highlighted significant investments in employee benefits capabilities.

Matthew Heimerman asked at what point property growth would necessitate changes to reinsurance structures, requested insights into growth rates by premium cohorts, asked for a split of utility income in investment disclosure, and sought elaboration on 'improved economics'.

Answer

Justin Cohen (CEO) stated property growth is manageable within existing reinsurance contracts due to a limited CAT strategy and geospatial spread. He noted account size bands haven't changed meaningfully, provided utility income as less than $100,000 net in core NII, and clarified 'improved economics' refers to holistic benefits from brokerage scale, impacting commission and expense ratios.

Matthew Heimerman of Citi asked about the threshold for property growth before reinsurance structures would need adjustment, growth rates across premium cohorts, the split of utility investment income, and clarification on 'improved economics'.

Answer

CEO Justin Cohen confirmed property growth is manageable within existing reinsurance contracts due to a limited CAT strategy and geospatial spread. He stated account size bands haven't changed meaningfully and provided the utility investment income as less than $100,000 net in core NII. Cohen clarified 'improved economics' refers to the holistic benefit of scale in brokerage, enhancing the bottom line through commission and expense ratios.

Matthew Heimermann from Citi asked for specifics on which business lines Aspen currently views as not being price adequate. He also inquired about how recent global geopolitical tensions are impacting the loss outlook for Aspen's political risk portfolio.

Answer

Christian Dunleavy, Group President & CEO of Aspen Bermuda, identified primary casualty and D&O as lines that still require significant rate improvement. He also noted that non-cat property is on the 'brink' of price adequacy. Regarding political risk, he stated that while recent global events require careful monitoring, they have not yet resulted in significant loss activity for the company's well-diversified portfolio in that area.

Matthew Heimermann from Citi asked for clarification on which business lines Aspen considers not to be price adequate and questioned if recent geopolitical tensions are affecting loss perceptions in the political risk portfolio.

Answer

Christian Dunleavy, Group President & CEO of Aspen Bermuda Limited, identified primary casualty and D&O as lines that still require rate improvement. He also noted that property non-cat is 'on the brink' of price adequacy. Regarding political risk, he stated that while events like attacks on ships require careful monitoring, they have not yet resulted in significant market losses, and Aspen's diversified portfolio in this area has performed well over time.

Matthew Heimermann from Citi asked for clarification on which specific business lines Aspen does not consider to be price adequate, and whether recent geopolitical tensions have altered the loss content or risk perception within its political risk portfolio.

Answer

Christian Dunleavy, Group President & CEO of Aspen Bermuda, identified primary casualty and D&O as lines that still require significant rate improvement. He also noted that property non-cat is on the 'brink' of price adequacy. Regarding political risk, he stated that while events like attacks on ships have occurred, they have not yet led to significant loss activity for the market, and Aspen's diversified book in this area continues to perform well.

Matthew Heimermann from Citi asked for identification of business lines that Aspen does not currently consider to be price adequate. He also inquired whether recent geopolitical tensions have altered loss content or risk perception within Aspen's political risk portfolio.

Answer

Christian Dunleavy, Group President & CEO of Aspen Bermuda Limited, identified primary casualty as a line that still requires more rate increases to be considered price adequate. He also noted that property non-cat is 'on the brink' and D&O needs more work. Regarding political risk, he acknowledged that while events like attacks on ships require careful monitoring, the diversified nature of the portfolio, which includes credit and terror risk, helps balance overall exposure.