Management Consulting

In the context of escalating geopolitical tensions, particularly due to the ongoing conflicts in Ukraine and Gaza, businesses are facing significant challenges related to war-related risks. Aon identified that many companies were unaware of the increasing risks associated with property loss and business interruption due to acts of war and terrorism. The Aon Global Risk Management Survey of 2023 highlighted that political risk is a growing concern, ranking 16th among current risks and 11th as a future risk, indicating a heightened awareness among businesses regarding the potential impact of geopolitical volatility. To address these niche issues, Aon developed tailored solutions for clients in the transport and logistics sector, particularly those affected by the scarcity of war insurance coverage. The company leveraged its Marine Lloyd’s of London facility to provide immediate insurance cover for various types of marine cargo, ensuring that clients could secure competitively priced standalone war and strikes perils coverage. This facility is backed by multi-lead blue-chip insurers, offering a financial stability that is crucial in a volatile market. Aon’s unique offering allows for the binding of war and strikes policies within 24 hours, which is essential for businesses needing quick solutions in a tight insurance market. The results of Aon's intervention were significant. For instance, Aon coordinated a comprehensive $50 million reinsurance facility in Ukraine, collaborating with the DFC and the Ukraine Ministry for Development of Economy and Trade to support the issuance of on-the-ground war risk policies. Additionally, Aon facilitated an extra $300 million in war risk insurance specifically tailored for Ukraine's healthcare and agriculture sectors. These initiatives not only provided immediate financial protection but also helped stabilize operations for businesses in high-risk areas, demonstrating Aon's commitment to addressing the unique challenges posed by geopolitical instability.