Risk Financing

Risk Financing

Learn how your organization can benefit from risk financing. 

Recent years have seen the emergence of challenging insurance market conditions. Certain classes of business have experienced flat or decreased pricing and abundant capacity, while challenging, poor-performing, or out-of-appetite classes of business (for example, cyber and property) have experienced rate increases and reduced capacity. These trends have forced many organizations to reassess their risk financing strategies.

What is Risk Financing?

The core objective of a risk financing strategy is finding a balance between risk retention, risk management and risk transfer that suits an organization’s risk appetite.

How Aon Can Help

At Aon, we work with organizations to answer questions the following questions, helping them to develop and improve their strategy and optimize their Total Cost of Risk:

  • How much risk can I retain?
  • How much risk should I retain?
  • How should I finance that risk?
  • Is a captive insurance company suitable for my risk exposures?
  • How can my existing captive retain more risk or play a more central part in my risk financing strategy?

We undertake a structured evaluation of an organization’s risk tolerance/appetite and build an understanding of its ability to retain risk, which allows us to develop optimum risk financing programs. Our approach is based on modeling and analysis of financial statements, KPIs, targets, debt covenants, credit rating metrics and other approaches aimed at assessing a materiality level of financial stress.

  • Total Cost of Risk Optimization

    Using our proprietary Risk Financing Analytics, we seek to help clients balance risk retention and transfer based on their risk tolerance/appetite.

  • Capability Feasibility and Consulting

    As a leading captive manager, we help clients to understand if a captive could be a cost-efficient way to retain risk, provide strategic reviews for existing captive owners, and help clients looking to de-risk and exit their captives.

  • Legacy Risk

    Some organizations have a long history of self-insurance and can benefit from strategies that bring finality to legacy risks. We can help to streamline structures and operations, exit captives, and structure loss portfolio transfers and commutations/schemes of arrangement.

  • Alternative Risk Transfer

    We provide strategic advice for difficult-to-insure risks and can approach conventional risk exposures in alternative ways. This can include:

    • Structured (re)insurance solutions
    • Multi-year and multi-line structures
    • Parametric or alternative capacity
    • Retrospective insurance solutions


The information contained on this page and the rest of this website is subject to Aon's terms and conditions.

Article 10 Min Read

Success in a World of New and Increasingly Volatile Risks

In this interview, Greg Case, the CEO of Aon, discusses the challenges that businesses are facing due to the pandemic, cyber risks, and the impacts of climate change.

Let’s Connect

Talk to Our Team

Are you ready to learn how your organization can benefit from risk financing strategy?