Aon has set up a business unit offering advice on capital efficiency in the present operating climate, where returns are low and margins under pressure.

The Capital Advisory operation, part of Aon’s Reinsurance Solutions business, is targeted at insurers, reinsurers, Lloyd’s syndicates and captives.

“There is no single move, no silver bullet, that will restore insurers’ profitability overnight,” Head of Capital Advisory Eric Paire said.

“It is all about fine-tuning and optimising the various components of [profit and loss] and the balance sheet for increased operating and financial margins, and an enhanced capital mix, while reducing volatility and allocated capital for a lower cost of capital.”