5 Top Trends for Risk Capital in 2025

The re/insurance industry is in a transformative cycle driven by a convergence of systemic risks reshaping market dynamics. The interplay between economic pressures, geopolitical shifts and environmental challenges creates a complex backdrop for businesses navigating their risk management strategies.

Risk financing is also evolving at an unprecedented pace, with a growing array of instruments available to support companies’ economic objectives. As interest rates are expected to decline, traditional insurer investment income will face pressure, prompting a greater emphasis on achieving underwriting profit. This shift will necessitate a focus among insurers on pricing adequacy, which will need to be delicately balanced with competitive pressures in a well-capitalized environment.

The re-election of Donald Trump as U.S. President is likely to influence the direction of geopolitical travel, with ramifications expected across multiple regions. Trump's approach to foreign policy, particularly regarding the war in Ukraine and relations with NATO, could result in significant shifts.

Given the current buyer-friendly marketplace conditions, organizations should use this moment for strategic investments and innovative risk management solutions. However, it is crucial for clients to stay informed about the key trends that will not only impact their immediate risk profile, but also influence their long-term strategies.

The five risk capital trends we believe will shape the market this year resonate with Aon’s Four Client Megatrends — trade, technology, weather and workforce — and reflect the systemic risks that businesses face today:

• Bolster Resilience Against Escalating Climate Uncertainty
• Harness AI to Navigate Emerging Cyber Risks
• Mitigate Exposure to Nuclear Verdicts with Proactive Strategies
• Address the Insurance Talent Challenge to Deliver Client Growth
• Utilize New Tools and Strategies to Make Better Decisions for Managing Risk Capital

Trend No. 1: Bolster Resilience Against Escalating Climate Uncertainty

Climate-related losses are not only climbing; they are also becoming harder to predict. Global natural disasters in 2023 resulted in above-average economic losses, totaling $380 billion. Global losses surpassed $300 billion for the eighth time in a row, coming in 22 percent higher than the long-term average, according to Aon research.

Temperature anomalies recorded around the world also resulted in 2023 being reported as the warmest year on record and were emblematic of a variety of other climate statistics that were rewritten amid a changing climate.

“In recent years, we've witnessed a systemic change in losses that are increasingly weather-related and unpredictable,” says Joe Peiser, CEO of Aon’s Commercial Risk Solutions. “While we can debate the frequency of these events, there's no debate about the escalating severity of losses.”

Extreme weather, coupled with natural economic growth, means there is significantly more value at stake. Events like the Texas freeze in 2021 and the catastrophic floods in Spain and Brazil last year illustrate this reality. As a result, there is a pressing need to close the protection gap by making insurance more available and affordable.

Bumps Ahead: Navigating Volatile Climate Impacts

Three key challenges lie ahead as the impacts of climate change result in more unpredictable weather patterns and increasing losses, compelling organizations to adapt to a new climate reality:

3 Strategies to Weather an Unpredictable Climate

As climate-related losses become more unpredictable, leaders will need to enhance risk management and risk transfer strategies, while keeping in mind longer-term approaches that will make their organizations more resilient.

Here are three ways that businesses can work with the insurance industry to navigate climate volatility:

1. Invest in adaptation.
   By partnering with the insurance industry, clients can access recommendations for specific resilience measures and investments based on their risk profile. These can include installing impact-resistant windows in on-site facilities to protect against hailstorms, reinforcing roofing if structures are in windstorm-prone areas, and implementing stormwater drainage systems as a flood prevention tool. Brokers can encourage their clients to adopt this long-term view on risk management.
2. Use data and alternative solutions for better risk management.
   Natural catastrophe and climate analytics can help companies shape decision making around the issue of weather and climate risk, enabling them to develop strategies to close the protection gap, understand regulatory changes and unlock new sources of risk capital. “Granular analytics can be used to understand climate risks at a detailed level,” says Tom Mortlock, head of climate analytics for the Asia Pacific region. “Clients should access location-level data on their property portfolios to identify and mitigate specific risks.”
   
   It’s worth considering integrated approaches that combine insurance and risk management, exploring a mix of traditional and innovative insurance solutions tailored to specific business needs. Businesses should also conduct continuous assessment and refinement of risk management strategies to ensure they are appropriately addressing evolving weather conditions.
   
   Parametric insurance has emerged as an effective alternative solution, especially in catastrophe-prone areas where market capacity is restricted and rates are climbing. Parametric uses an “if-then” model designed to complement and supplement a traditional indemnity program and better match capital to the broad nature of risk caused by natural disasters.
3. Proactively engage with insurers on long-term resilience.
   Just as organizations clearly articulate their transition strategies and resilience investments to their lenders and investors, they should also communicate these plans to their insurers to help pinpoint opportunities for more favorable pricing and coverage outcomes. Through transparency and collaboration — and with the help of their brokers — organizations can build stronger relationships with insurers by sharing how they are investing in resiliency to reduce climate risk, as well as how they are committed to reducing their carbon footprint.
   
   “Insurers take into account not just the cost benefit of insuring a particular risk, but also an organization’s approach to sustainability,” says Megan Hart, global head of analytics and collaborations for Aon’s Climate Risk Advisory. “For example, how is an organization approaching energy transition to be less reliant on carbon in the future? This benefits both the resiliency of the organization, as well as the insurer’s portfolio over the long term.”

The future of climate change will require risk management approaches that consider a broad range of exposures and potential outcomes. While volatility and complexity will be a feature of climate risk in the coming years, data-led decision making will be central to building a resilient business and workforce as climate losses and impacts deepen.

Trend No. 2: Harness AI to Navigate Emerging Cyber Risks

As artificial intelligence (AI) continues to advance at an accelerated rate, businesses across industries are increasingly integrating AI-driven solutions into their operations. While these advancements promise significant benefits, they also introduce a range of new risks, particularly in the realm of cyber security.

The rise of AI has not only led to innovative applications but has also created opportunities for malicious actors to exploit vulnerabilities.

Understanding and mitigating these risks and opportunities is crucial for organizations aiming to leverage AI's potential while ensuring robust security and governance frameworks are in place.

“Risks associated with AI and cyber threats are evolving at a rapid pace,” says Cynthia Beveridge, global chief broking officer in Aon’s Commercial Risk practice. “We must develop targeted coverage that addresses not just traditional cyber attacks, but also the technological risks arising from AI advancements. It's essential for brokers to upskill and think differently about how we advise our clients, ensuring they have the right protection in place for a myriad of potential vulnerabilities.”

The Shifting Cyber Landscape:

Evolving Risk Profiles

The digital transformation spurred by AI has led to a rapidly changing risk landscape. Traditional risk profiles, heavily focused on tangible assets such as property and equipment, are no longer sufficient. The increasing value of intangible assets, including AI algorithms and data, necessitates a shift in how risks are assessed and managed.

Key Industries Mentioning AI on Earnings Calls

Yet, many organizations are still underprepared, with a significant protection gap evident in their current insurance coverage. In fact, just 17 percent of global corporate information assets are currently covered by cyber insurance. While the integration of AI into business operations has brought about unprecedented opportunities, it has also accelerated cyber risks. “AI systems, if not properly secured, can become targets for cyber attacks, leading to data breaches, system outages and other security incidents,” says Adam Peckman, global practice leader of Aon’s Cyber Risk Consulting and head of Risk Consulting & Cyber Solutions in Asia Pacific. “The misuse of AI by malicious actors to enhance the sophistication of cyber attacks further exacerbates this challenge.”

As businesses increasingly rely on technology, the dependencies on these systems create vulnerabilities. “Accidental system outages, data poisoning and extraction attacks are some of the risks associated with technology dependencies,” says David Molony, head of Cyber Solutions in Europe, Middle East and Africa. “Organizations often struggle to keep up with the rapid pace of AI developments, leaving them inadequately protected against potential threats.”

Bifurcation Between Short-Term and Long-Tail Risks

AI introduces both immediate and long-term risks. Short-term operational risks include the misuse of AI by bad actors, such as through deepfakes or data poisoning attacks. However, long-tail risks, which may not manifest for years, pose a significant threat. These include privacy liabilities and potential litigations based on outdated laws being applied to new AI-driven activities. Organizations must be proactive in understanding and mitigating these long-term risks.

Lack of Education and Awareness

One of the most critical challenges facing businesses today is the lack of awareness and understanding of AI developments and their associated risks. Many traditional risk managers are not adequately informed about the complexities of AI and its potential threats. This gap in knowledge can lead to inadequate risk management strategies and insufficient insurance coverage, leaving organizations vulnerable to emerging cyber threats.

4 Ways to Build Sustained Cyber Resilience

In the face of evolving cyber threats, organizations can effectively manage the complexities of AI and cyber risks through proactive measures, reactive strategies and comprehensive cyber insurance coverage. Modern insurance solutions are designed to address both the tangible and intangible aspects of risk, providing protection against a wide range of threats across an evolving risk profile. By providing coverage for various cyber incidents, insurance policies can help organizations recover from financial losses, legal liabilities and reputational damage.

“Additionally, insurance can incentivize businesses to adopt better security practices and invest in robust risk management strategies,” says Brent Rieth, head of Aon's Cyber Solutions in North America. “For instance, cyber insurance policies often require organizations to implement specific security measures, thereby enhancing their overall resilience.”

To effectively manage AI and cyber risks, organizations should consider the following recommendations:

1. Understand your risk profiles.
   Regularly assess and update your risk profiles to reflect the evolving technological landscape, emerging threats and trends, and the increasing value of intangible assets.
2. Revisit existing policies.
   Ensure that your current insurance policies adequately cover new and emerging risks associated with AI and cyber threats. Work with insurers to identify and address any gaps in coverage.
3. Stress test risk management programs.
   Conduct rigorous stress tests of your risk management programs and security measures to identify vulnerabilities and ensure robust protection against potential threats.
4. Partner with advisors.
   Collaborate with expert advisors and insurers to procure comprehensive cyber insurance policies that cover a wide range of incidents, including AI-related risks. Work closely with providers to ensure your policies are tailored to your specific needs and risk profiles.
   
   By following these recommendations, organizations can better navigate the challenges posed by AI and cyber risks. At the same time, they can also improve their cyber resilience to ensure they are well-protected and poised to leverage the immense benefits that technological advancements offer.

Trend No. 3: Mitigate Exposure to Nuclear Verdicts with Proactive Strategies

Rising liability loss trends, driven by a record number of social inflation-fueled nuclear verdicts, have created a complex casualty pricing environment in the U.S. Similar concerns are emerging in the UK and Europe, where class actions are a growing issue.

Short-term litigation issues are becoming primary topics in renewal conversations as underwriters adopt a cautious approach. Looking ahead, if left unchecked, nuclear verdicts will lead to escalating insurance costs, increased financial strain on insurers and discourage businesses from taking necessary risks.

• In the U.S., nuclear verdicts (those higher than $10 million) increased 27 percent in 2023 and thermonuclear verdicts (those higher than $100 million) were up 35 percent.⁴
• U.S. commercial casualty losses of $143 billion in 2023 were higher than the $118 billion in global insured catastrophe losses.⁵
• Rising verdicts have impacted U.S. liability claims, which have increased 57 percent in the past 10 years.⁶
• Social inflation contributed around 7 percent of liability claims growth in the U.S. and more than 10 percent of liability claims in the UK in 2023.⁷

5 Drivers Impacting Nuclear Verdicts

The evolving legal climate has primarily impacted commercial general liability, commercial auto and product liability lines, resulting in heightened uncertainty for reinsurers and primary markets. This places pressure on both renewal limits and rates as they try to manage potential future liabilities.

“There’s been a strong willingness of juries to punish corporates they feel view profits over people,” says Steve Hackenburg, head of Property and Casualty in North America. “Driving that is a plaintiff’s bar that has become very sophisticated in convincing those jurors to make increasingly high awards.”

A number of factors are driving the growth of nuclear verdicts, including these five:

“As an industry, we cannot stand by and allow this to continue unchecked,” says Cynthia Beveridge, global chief broking officer in Aon’s Commercial Risk practice. “We need to advocate for change, calling out these practices and pushing back against the systemic issues that lead to excessive claims. It’s crucial for our industry's sustainability and our clients' financial health.”

Growth of Nuclear Verdict Class Action Issues in Europe

Litigation issues have traditionally been an issue in the U.S., where nuclear verdicts increased more than 27 percent in 2023.¹¹ Social inflation continues to be the largest driver of U.S. liability claim growth, however, European countries, which have typically avoided adverse litigation activity, have seen a troubling increase in class actions.

According to the CMS European Class Action Report 2024, continued growth in class actions has occurred across Europe. There were 133 claims filed in 2023, with the UK, Netherlands, Germany and Portugal combining for 78 percent of those claims. In the UK, total claims in 2023 increased by 18 percent.¹²

Recent legislative changes, specifically the EU Representative Actions Directive, which allows for class actions to be heard across the EU, and a rise in litigation funding raise concerns about a potential surge in class actions.¹³

Collectively these developments are unsettling UK underwriters, with reluctance to write certain lines of business growing, and businesses increasingly seeking more capacity from the London Lloyd’s markets. As in the U.S., policy exclusions are being added for emerging risks, including PFAS chemicals.

In the UK, in April 2024 the Judicial College Guidelines 17th edition (the defacto reference for general damages valuations) announced a 22 percent climb in general damage claim costs over previous editions.¹⁴ Many factors impact rising claims settlement costs, such as significant increases in cost of care, including collective actions. This, in turn, heightens underwriter concerns.

“We expect to see that figure continue to rise in line with the Retail Price Index in subsequent years,” says Anthony Little, a claims management director in the United Kingdom. “So probably anywhere between 2.5 and 3.5 percent year-on-year until the next revision is published.”

Until recently, opt-out mass actions have not been a significant feature of the English legal system, which differs with the U.S. However, in 2015 an opt-out regime before the UK Competition Appeal Tribunal was introduced for infringements of competition law. There is an ongoing debate about whether the English legal system should make wider use of opt-out procedures.

Litigation funding, while not as developed as in the U.S., also remains a concern with insurers in the UK, especially if larger class actions emerge around issues like sports-related brain injuries.

European businesses with a significant U.S. footprint are also at increased risk from this trend. The European casualty market remains competitive for well-performing risks without U.S. exposure. However, insurers are casting a cautious eye when European multinationals have significant U.S. risks, including U.S. operations or export of goods to the U.S.

Those companies face higher premiums, less capacity and restricted coverage due to prior-year reserve deterioration and ongoing concerns related to nuclear verdicts and adverse litigation trends.

6 Strategies to Mitigate the Potential Impact of Nuclear Verdicts

With verdicts continuing to rise, the impact of social inflation is creating a cautious casualty insurance environment. Until there is robust legal reform in the U.S., insurers will continue to underwrite with vigilance in tort-exposed lines and with emerging risks, including PFAS and phthalates.

In the meantime, as litigation continues to gain momentum, insurers are seeking to address exposures through coverage clarifications, exclusions and increased retentions.

“Deductibles are higher, and companies are taking on more risk, and therefore more volatility,” says Hackenburg. “Insurers are putting up less capacity and charging more for it. It is a tough environment.”

To help mitigate risk and potential impact of nuclear verdicts, businesses are urged to employ these risk management strategies:

1. Invest in a high-quality defense counsel.
   The plaintiff’s bar is highly organized at crafting a comprehensive trial strategy to deliver a potentially large verdict. It is critical that the defense counsel is comfortable with handling high-pressure situations and skilled at managing complex legal issues to counter a strong plaintiff’s bar.
2. Do not be afraid to fight.
   Plan for the worst-case scenario threatening your business and reputation. Partner with a seasoned defense counsel and the right broker with the strategic approach to successfully navigate difficult claims.
3. Show juries that plaintiff decisions have consequences.
   This includes an impact on the company, jobs and the local economy. The affordability of insurance puts the profitability and viability of the impacted business in question, leading to larger economic issues and potentially higher costs of goods and services.
4. Invest in high-quality risk control.
   Strong risk control is essential for the business to demonstrate that it invested in thoughtful and appropriate risk management procedures to protect the business, customers and society.
5. Use data and analytics to study loss events in your industry.
   Since litigators get an early jump on all available data associated with the claim incident, organizations must plan and execute a rigorous and comprehensive litigation strategy, using data and analytics to close the gap and remove this advantage. Data can help buyers better understand loss events and trends among businesses with similar exposures. By working closely with their broker and insurer, buyers can properly plan for and mitigate potential loss events and understand their costs.
6. Be proactive about the high cost of litigation.
   Enterprises and risk management teams can be proactive by staying informed about the current strategies litigants are using to seek payouts. They can also use the wealth of data they already possess to better predict attorney involvement in claims. Tools like Aon’s LAMBDA (Litigation Analysis, Mitigation and Benchmarking of Attorneys) use AI insights to detect litigation risk, manage attorney performance and resolve claims effectively.

Until effective and meaningful tort reform is enacted, your broker and insurer are in the best position within this environment to help develop mitigation and risk transfer strategies that will result in better risk decisions and build resilience.

Trend No. 4: Address the Insurance Talent Challenge to Deliver Client Growth

The competition for talent is intensifying across all industries, and the insurance sector is no exception. Insurance companies are seeking professionals with the capabilities to navigate the complexities of the modern risk environment.

According to the Aon Global Risk Management Survey, failure to attract and retain top talent is the second biggest risk facing insurance organizations globally. Consequently, insurers and brokers are prioritizing their people strategies to build teams with expertise in emerging risk areas as they recognize talent acquisition will be crucial for fostering innovation and maintaining competitiveness in a rapidly evolving market.

The Impact of Talent Supply on Business Performance

“The insurance industry is facing a significant talent crisis,” states Cynthia Beveridge, Aon’s global chief broking officer in Commercial Risk. “Many potential entrants do not fully comprehend the value and complexity of our work, often associating it with outdated stereotypes. We must make the industry more appealing by highlighting the exciting advancements in analytics, risk management and client engagement. Attracting and retaining talent is not merely about filling positions; it is about supporting the next generation of professionals who can adeptly navigate this dynamic environment.”

The workforce deficits and skills gaps within the insurance industry can have substantial implications for insureds and clients. These gaps can result in a disconnect between the evolving risk landscape and the industry's capacity to underwrite and manage risks effectively. Insureds may find that products do not adequately address their needs, particularly concerning emerging risks like cyber threats and climate change. Clients may experience delays in claim processing due to a lack of expertise in complex risk assessment, leading to financial strain and dissatisfaction. Moreover, an inability to innovate in line with market developments can prompt clients to seek alternative risk management solutions outside the traditional insurance sector.

Aware of the growth opportunity the right talent could create, Rupert Moore, CEO of Aon’s Reinsurance Solutions in the United Kingdom, shares, “The more we can be the experts in emerging areas, the better. That means being at the forefront of the science around climate technology risk, for example, and how you truly understand cyber risk. Geopolitical risk is also continually evolving as different governments come to power. The more insight we can bring to these, the better we’ll be able to understand them, and therefore attract capital to solve for them.”

To effectively address the talent challenge, it is essential to understand the specific skills and expertise required to excel in this dynamic environment. By creating the right workforce mix, organizations can better position themselves to deliver their growth ambition.

Different Skills and New Ways of Working

The impact of emergent risks associated with climate, cyber, renewables and political uncertainty is driving the need for closer teaming across multiple stakeholders with different skills. Representing the interest of the customer in complex, multifaced risks will require the need for closer collaboration between brokers, actuaries, pricing teams and underwriters and highly skilled relationship and service management. Balancing technical and behavioral skills will also be key.

As the sector transitions, we observe the need for three distinct pools of talent, including:

1. Insurance Practitioners: Experienced technical people in insurance who understand how the business works today and have an open mind to explore the impact of transformative trends and their insurance implications. 
2. Industry Futurists: Experts who understand where the world is heading across specific emergent risks (e.g., mobility, cyber and climate) who are progressive, challenging and interested in enabling the sector to deliver its purposeful ambition.
3. Change Orchestrators: Change and transformation practitioners who understand the insurance sector and can facilitate collaboration between practitioners and futurists, bring out the best in people, challenge strategy and enable delivery.

Integrating a broad mix of skill sets and personalities is not easy, as highlighted by the industry’s experience of integrating data analytics into underwriting.  It is important to carefully orchestrate the integration of individual stakeholder groups — each with potentially different mindsets and ways of working — to encourage teamwork, spark innovation, leverage opportunities and embrace change.

Effective Strategies for Attracting and Retaining Talent

Learning from other sectors, insurers can accelerate their progress on the people agenda and leapfrog forward:

Why Talent Matters: 4 Key Benefits for Clients

As the insurance industry faces a significant talent challenge, it’s important that clients recognize the far-reaching implications and potential benefits this issue presents:

1. A Drive to Innovate: A skilled and diverse workforce in the insurance industry is crucial for creating innovative solutions to emerging risks, ensuring clients don’t face outdated products.
2. Efficiency and Expertise: Talent shortages can result in delays and a lack of expertise in risk assessments, directly affecting clients' financial outcomes and overall satisfaction. 
3. Adoption of Best Practices: Clients can enhance their own talent strategies by promoting purpose-driven work and continuous learning to attract and retain skilled professionals. 
4. Collaborative Solutions: Aligning talent development with organizational goals enables clients to strengthen their resilience against emerging risks and better prepare for the future.

By understanding the importance of the talent challenge, clients can proactively engage in strategies that not only benefit their organizations, but also ensure a more robust insurance ecosystem that meets their needs.

Trend No. 5: Utilize New Tools and Strategies to Make Better Decisions for Managing Risk Capital

Every company operates within its own economic ecosphere, navigating an increasing number of systemic risks that can threaten stability and growth. As an increasing focus on national interests starts to fragment the interconnectedness of global markets and supply chains start to fray, the need for effective risk management strategies has never been more pressing.

The traditional insurance model, which primarily focuses on hard assets, has struggled to adapt to the evolving business environment characterized by intangible assets, such as brand value, intellectual property, supply chain networks and customer relationships. This shift has prompted a reevaluation of risk transfer mechanisms, leading to the exploration of innovative solutions that can enhance resilience.

Closing the Protection Gap?

Calendar year insured loss as percent of GDP

Historically, the integration of supply chains became a hallmark of modern business, fostering collaboration and efficiency across various sectors. However, as we look back over the past few decades, a noteworthy trend emerges: Since 1987, insured losses as a percentage of GDP have been declining. This decline reflects a growing recognition that conventional risk transfer methods may not adequately address the unique challenges posed by today's business realities. The emergence of new risk transfer products and capital market capacity offers an opportunity to bridge the protection and innovation gap developed within the insurance industry.

Businesses are increasingly turning to alternative risk tools, such as parametric insurance and captive insurance companies. Parametric insurance provides a rapid payout based on predefined triggers, allowing businesses to quickly access funds when specific risk thresholds are met, thus enhancing their ability to respond to unexpected events. Captives, on the other hand, enable companies to retain risks within their own controlled environment, fostering a more tailored approach to risk management that aligns with their unique operational needs.

The driving forces behind this shift are multifaceted. A significant driver is the sheer inflation of risk and the insurance business, which has resulted in increased capital availability and heightened interest from various risk takers. While capital markets have engaged with insurance for decades, their participation has primarily focused on modeled risks, such as earthquakes and windstorms. This interest stems from their desire for investment instruments that are not correlated with other investment risks, providing both diversification and yield opportunities, particularly in a low-interest-rate environment.

However, as the ability to model a broader range of risks — such as wildfires, floods and hail — improves, more investors are becoming interested in the insurance sector. This expanding list of modelable perils can attract investment from capital markets that do not wish to become traditional insurers but are keen to leverage these new opportunities for yield. By embracing these advancements, companies can enhance their risk management strategies and better position themselves to navigate future uncertainties.

Moreover, the COVID-19 pandemic served as a pivotal moment for businesses worldwide, compelling them to reassess their often inherently optimistic attitudes toward risk. It underscored the fragility of interconnected supply chains and highlighted the importance of robust risk management strategies. As a result, the insurance industry has become more adept at articulating businesses' exposures, as well as fostering a greater awareness of external volatility and the significance of systemic risk.

By harnessing data analytics, predictive modeling and other advanced techniques, companies can better understand their risk profiles and tailor insurance solutions to their specific needs. This data-driven approach enhances the ability to identify potential vulnerabilities and develop strategies that drive resilience within their economic ecospheres.

The evolution of risk management in the insurance industry reflects a broader trend toward recognizing the complexities of modern business. “We are now much more aware of external volatility and systemic risk,” notes Joe Peiser, CEO of Commercial Risk Solutions. “By leveraging new tools and strategies, businesses can enhance their decision-making capabilities and forge a path toward greater resilience in uncertainty. The future of insurance lies in its ability to adapt and innovate, ensuring that clients are equipped to thrive in a dynamic economic ecosphere.”

As we move forward, the insurance industry is clearly evolving to meet the changing demands of its clients. The rise of better decision-making tools and a growing understanding of systemic risks are paving the way for innovative risk transfer solutions that can help businesses navigate uncertainty. By embracing parametric, captives, and other alternative risk and financing strategies, companies can build a more resilient foundation that protects their assets and supports sustainable growth in 2025 and beyond.

3 Actions for Clients in 2025 and Beyond

In the rapidly evolving landscape, it is crucial for clients to adopt proactive strategies to navigate emerging challenges and opportunities. By focusing on these areas, companies can better prepare for and adapt to the dynamic environment, ensuring sustained success and growth:

1. Invest in resilience and adaptation.
   Implement comprehensive risk management strategies that focus on enhancing resilience against climate impacts, evolving litigation and cyber threats. This includes investing in technology, training and infrastructure that can withstand and adapt to changing conditions.
2. Use data-driven decision making.
   Use advanced analytics and decision-making tools to better understand your risk landscape. Regularly assess your risk profiles and insurance coverage to ensure they align with emerging trends, including AI developments and social inflation, allowing for more informed risk transfer strategies.
3. Engage proactively with your risk management partners.
   Create strong relationships with your insurance partners by actively discussing your long-term resilience plans and risk management needs. Collaborate on innovative solutions that address systemic risks and the talent crisis, ensuring that both your organization and the insurance industry can thrive in a rapidly changing environment.

Aon’s Thought Leaders

Joe Peiser
CEO, Commercial Risk Solutions

Cynthia Beveridge
Global Chief Broking Officer, Commercial Risk

Louisa Blain
Partner, Human Capital Insurance, United Kingdom

Aileen Chalmers
Claims Service Director, United Kingdom

Emma Crookes
Global Insurance Vertical Leader, United Kingdom

Steve Hackenburg
Head of Property and Casualty, North America

Craig Halliday
Technical Claims Manager, United Kingdom

Megan Hart
Global Head, Analytics and Collaborations, Climate Risk Advisory

Liz Henderson
Global Head, Climate Risk Advisory

Anthony Little
Claims Management Director, United Kingdom

David Molony
Head of Cyber Solutions, Europe, Middle East and Africa

Tom Mortlock
Head of Climate Analytics, Asia Pacific

Adam Peckman
Global Practice Leader of Cyber Risk Consulting, Head of Risk Consulting & Cyber Solutions, Asia Pacific

Brent Rieth
Head of Cyber Solutions, North America

Maggie You
Partner, Head of People Advisory, Talent Solutions, Asia Pacific

¹ Aon 2024 Climate and Catastrophe Insights Report
² Climate Change Impacts on Crop Yields, Nature Reviews Earth & Environment
³ Solar Farm Hail Damage: The Perfect Storm, JD Supra
⁴ Liability Loss Trends and Claims Insights, Allianz Commercial
⁵ Nuclear Verdicts Drive Rising US Liability Claims, Risk & Insurance
⁶ Social inflation and legal system abuse likely to take center stage in renewals discussions, Insurance Insider
⁷ Sigma, Litigation Costs Drive Claims Inflation: Indexing Liability Loss Trends, Swiss Re Institute
⁸ ‘An Era of Heightened Risk:’ Class Action Onslaught Shows No Signs of Abating, Law.com
⁹ Q2 2024: Global Insurance Market Overview, Aon
¹⁰ Nuclear Verdicts Drive Rising US Liability Claims, Risk & Insurance
¹¹ Liability Loss Trends and Claims Insights, Allianz Commercial
¹² CMS European Class Action Report 2024, CMS
¹³ Representative Actions Directive, European Commission
¹⁴ Judicial College Guidelines, 17th Edition, RMP