Aon launches new D&O application to manage executive officer risks

Aon has launched its Directors and Officers (D&O) Risk Analyzer, a digital tool designed to help risk managers at US-listed public companies make data-driven decisions to manage executive risks.

This tool is part of a broader suite of Aon offerings that utilize data and analytics to provide clients with insights for navigating a complex risk environment.

The D&O Risk Analyzer provides real-time analytics, allowing clients to quantify potential D&O losses with insights on risk retention, risk transfer, and maximizing the value of insurance. The tool’s models can be adjusted in real time based on new client information, refining the view of risk as circumstances evolve.

Additionally, the tool includes risk exposure and loss models that help clients and brokers understand the potential impact of adverse events, ranging from minor to catastrophic. These models enable users to explore factors influencing D&O litigation and exposure, including stock volatility, liquidity issues, disputed mergers and acquisitions, and regulatory matters.

Another key feature of the D&O Risk Analyzer is its stock price drop analysis, which assesses how varying levels of stock price declines could translate into theoretical D&O losses, using historical settlement data.

The tool also offers total cost of risk (TCOR) visualizations, allowing clients to explore various insurance options, optimize coverage limits, and design insurance programs that best meet their needs. This functionality supports clients in making informed decisions and effectively communicating those decisions to stakeholders.

The D&O Risk Analyzer supports real-time loss forecasting, enabling risk managers to quantify D&O risk exposures and discuss potential scenarios with brokers. This capability enhances the focus on risk management strategies beyond expected losses, helping risk managers better communicate risk retention and transfer options to senior executives.

The launch of the D&O Risk Analyzer follows the introductions of Aon’s Property Risk Analyzer and Casualty Risk Analyzer earlier this year. These tools provide exposure visualizations and model potential losses to assist clients in evaluating their risk and insurance options.

Aon also plans to introduce additional risk analyzer tools in the coming months to offer data-driven insights on key risks.

Timothy Fletcher (pictured above), CEO of Aon’s financial services group, highlighted the increasing complexity of corporate officer risks due to factors such as rising litigation and defense costs, equity market volatility, and shifting regulatory frameworks.

Fletcher emphasized the importance of assessing D&O liability and the role of insurance in protecting public officers and board directors.

Joe Peiser, global CEO of Commercial Risk Solutions for Aon, stated that the D&O Risk Analyzer exemplifies Aon’s commitment to supporting clients in making data-informed decisions.

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