Aon has urged reinsurers to seize opportunities and not shy away from risk despite challenging market conditions that have included an increase in the frequency and severity of losses.

“In order for us to continue to operate as a fluid re/insurance marketplace on behalf of clients, we have to ensure that both buyers and sellers of risk can come together to conclude a transaction,” Aon Reinsurance Solutions CEO Andy Marcell says in a LinkedIn post.

“This requires effort and understanding on both sides in order to reach a mutually agreeable outcome.”

Industry participants and analysts have forecast a tough January renewal period, with Fitch Ratings last week flagging rate increases of “well over 10%”, higher retentions, reduced limits and a movement to named perils coverage from all perils.

Mr Marcell says the renewals present a time to move towards, not away from risk, and to strengthen business relationships.

“We recognise the challenges many reinsurers face; however, those reinsurers that seize opportunity will be remembered as economic enablers for years to come,” he says.

“We need to be part of the risk management conversation; be the solution, as if we shy away from taking risk, we ourselves risk losing relevance as clients identify alternative, sustainable and consistent options to manage their exposures.”

Mr Marcell has also urged reinsurers to provide “sufficient governance time” for quotes to be reviewed and accepted by clients, who are looking for their capital providers to offer a level of uncertainty in an uncertain environment.

“In modern times, most innovation would simply not have occurred were it not for the ability for communities and commerce to effectively mitigate risk via re/insurance,” he says.

“As an industry, it is therefore our responsibility to continue to provide access to risk transfer solutions that keep pace with evolving societal demands, and that are backed by appropriate and stable levels of capital.”