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LONDON, Nov. 10, 2022 /PRNewswire/ -- Aon plc (NYSE: AON), a leading global professional services firm, today announced the expansion of the its catastrophe modeling and consultancy capabilities in Latin America with the acquisition of ERN (Evaluación de Riesgos Naturales), a Mexico-based leader in risk assessment modeling.
The acquisition aims to bring additional value to Aon's insurer clients, which face three key issues in navigating natural catastrophe and climate volatility: the increasing cost of secondary perils, the ability to understand an evolving climate, and the need to create a custom view of risk to make better business decisions. Aon is working with clients to develop their own view of risk – an important component in achieving the differentiation necessary for successful renewals outcomes in the tightening reinsurance market.
Over the past decade, Latin America experienced $64.4 billion in insured losses, predominantly driven by tropical hurricanes, followed by earthquake, drought and flooding. In response to these the challenges, the acquisition of ERN expands Aon's catastrophe modeling suite by introducing earthquake and hurricane modeling for Latin America and the Caribbean.
The transaction sees ERN joining Aon's Reinsurance Solutions business, where it will collaborate with the Impact Forecasting team, whose modeling suite enables firms to analyze the financial impacts of catastrophic events with a view to developing effective reinsurance, underwriting and exposure management strategies.
"The acquisition aligns within Aon's global position as a leader in data and analytics solutions for the re/insurance industry, our focus on catastrophe model development in Latin America, and our use of scientific research, academic collaborations and robust analytics to build innovative risk solutions for the public and private sectors," said Keith Lawler, managing director of Aon's Reinsurance Solutions in Latin America. "We are excited to welcome the ERN team as we together pursue our shared commitment in helping our insurer clients to differentiate themselves, both in their understanding of how climate change and natural catastrophes affect their businesses, and in how they communicate this view of risk to their reinsurance carriers."
Founded in 1996, ERN has developed modeling capabilities that are specific to Latin America and backed by strong expertise and research. Lawler will serve as CEO of this business and ERN founders Eduardo Reinoso and Dr. Mario Ordaz will join Aon as senior scientific advisors.
"Throughout the last 26 years, ERN has built a highly respected brand and has utilized a broad range of modeling platforms that assist clients analyzing many risks," said Dr. Ordaz. "Joining Aon can take us to the next level in terms of reach and delivery, contributing even more to reducing possible human and material losses from natural and man-made catastrophes."
The acquisition expands Aon's wider efforts to quantify natural catastrophes and climate risk globally. Aon is collaborating with leading academic institutions worldwide to better understand and apply evolving climate research, including, most recently, with the University of California, Merced and the University of California, Los Angeles to implement the latest climate change science and research into Aon's U.S. wildfire catastrophe model.
Terms of the transaction, which has closed, were not disclosed.
About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.
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About ERN
ERN is the Latin American leader in risk assessment models evaluating natural and man-made phenomena that impact people, buildings, and infrastructure. We strive to provide a solution to the needs of our clients by extending our reach through studies and projects in different parts of the world. Our avant-garde products and services are the result of an experienced team that is always committed to offering the most advanced as a result of our interest in research and technology.
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SOURCE Aon plc