Insurance/Reinsurance:Aon on the move!

Implications: Is the beginning of the end for smaller insurers &/or reinsurers? Which insurance broker or reinsurer is the next likely candidate for takeover?

Analysis:

Aon is certainly one of if not the biggest player in the brokerage business. What does it really want with a Benfield?  Many suggest it is Benfield’s market share in several less tapped continents & its expertise in Southeastern, US property catastrophe.  From a process management perspective there will be many shared administrative & support sources, which will not only decrease costs, but exponentially increase revenues. Some IT functions will likely continue to be heavily outsourced and one can also likely expect a modified vendor list.  Benfield, however has a different strategic plan which one wonders whether it will mesh well with Aon.  Aon Re Global has a solid presence in Reinsurance, but many wonder whether their business model has a strong appetite for large complex catastrophic losses. Will this be another move like GE into a heavy reinsurance concentration with a quick realization the ROI just does not match? GE may not be an insurance conglomerate, but it was supposed to be able to bring good things to light!  Full integration for AON & Benfield is not until almost 2011. Some continue to say it will be a match made in heaven, while the reinsurance guru’s continue with skepticism & close look at the move in!  A careful eye should be on systems & what will be outsourced, as well as development expectations.  Companies like Willis had similar hopes, but then again so did Hastings before they were sold. There are currently many up for sale. http://www.businessnation.com/Businesses_for_Sale/Banking-Finance/Insurance/