Businesses today face unprecedented volatility and complexity driven by profound transitions – or megatrends – across Trade, Technology, Weather and Workforce. In this episode, Aon President Eric Andersen speaks with Aon’s Lambros Lambrou, CEO of Human Capital, and Andy Marcell, CEO of Risk Capital, about the megatrends highlighted in Aon’s 2024 Client Trends Report and opportunities for business leaders to take action on interconnected risk and people issues.
Additional Resources:
Aon’s 2024 Client Trends Report
Aon Unveils Client Trends Report Highlighting Interconnected Risk And People Issues
Aon’s 2023/2024 Global Risk Management Survey
Special Edition: Aon CEO Greg Case on 2024 and Evolving to Serve Clients
Tweetables:
Intro:
Hi everyone, and welcome to the award-winning “On Aon” podcast, where we dive into some of the most pressing topics that businesses and organizations around the world are facing. Today we hear a special conversation with Lambros Lambrou and Andy Marcell on Aon’s 2024 Client Trends Report. Now, please welcome this episode’s host, Aon’s President, Eric Andersen.
Eric Anderson:
Hello, my name is Eric Anderson and I'm the President here at Aon. In today's special On Aon episode, we're looking at a new report we released this week. From global supply chain risk to climate insecurity, organizations face challenges and complexities on a scale rarely seen before. As we talk with clients about the road ahead, we have identified four big trends that will shape the next few years, and they are trade, technology, weather, and workforce.
In this report, which you can find on our website, Aon's Leaders in Risk Capital and Human Capital talk about how they're working with clients to tackle these challenges head-on and what they see as the biggest opportunities in trade technology, weather, and workforce over the next three years. With me today to discuss in greater detail is Lambros Lambrou, CEO of Human Capital Solutions, and Andy Marcell, CEO of Risk Capital Solutions. Thank you both for joining me here today.
Lambros Lambrou:
Thank you for having me here today, Eric.
Andy Marcell:
Thank you, Eric. Glad to be here.
Eric Anderson:
It's great to have you. In our discussion, we're going to walk through several big questions and they are: What are the themes? How are organizations addressing these challenges? What solutions can we provide? Let's get ourselves started. First, let's talk through some of these themes. Andy, why don't you kick us off?
Andy Marcell:
Thanks, Eric. First, the first theme we have is trade, which is, of course, central to how we all do business, which has been thrown into sharp relief recently with the pandemic and also with geopolitical disturbances around the world. There's a focus on how sustainable is globalization, where there's a retreat to sort of regional behaviors, and more important is the interconnectivity of industry around the world and how we navigate that on behalf of our clients. Secondly, the theme is technology, which is accelerating at an unprecedented pace, pushing the boundaries of digitization, particularly in light of the developments with artificial intelligence and what that means for growth, how you position your workforce, and navigate the complexities of that emerging technology.
Eric Anderson:
Hey, Lambros, why don't you give us a little bit about the other two themes?
Lambros Lambrou:
Yeah, definitely. Thanks, Eric, so thirdly, changing weather is absolutely forcing organizations to manage climate risk in an increasingly holistic way. Whether it's from closing the protection gap and ensuring the health and safety of workers in the face of extreme weather to understanding regulatory changes and leveraging emerging green technologies. Then, finally, as the workforce emerged from the pandemic, employers began addressing well-being needs very differently. In the coming years, attracting and retaining talent will require rethinking the entire employee experience, from motivating and sustaining teams to differentiating an organization from competitors and building a sustainable working life.
Eric Anderson:
Yeah, these are huge challenges, and I know just from discussions that we're having with our clients and other organizations, they need new strategies to help address them, which is I think exactly how we're thinking and how we're trying to navigate and approach these topics. These four interconnected megatrends, how we bring risk capital, how we bring human capital capabilities to clients to help sort of get their mind around it and really take positive action steps is such a big deal. It kind of takes me to our next question, which is, how are clients thinking about it? How are they starting to address these megatrends through Risk Capital and the Human Capital lens that may have not been apparent a few years ago? Maybe, Lambros, let me start with you on that one.
Lambros Lambrou:
Yeah, thanks Eric. I guess when I think about the results in our megatrends report, seeing attracting and retaining talent rise to the number four global risk that companies face was extremely telling in how thinking has evolved on traditional risk topics. I guess with that backdrop, we're actively addressing people risks with our clients in a much more connected way across Human Capital and Risk Capital. By way of example, whether it's using talent assessments to identify employee groups with elevated cyber risk or using captives to reduce pension-related exposures or optimized benefit spends or deploying parametrics to create resilience bonds that protect employees from natural disasters.
Eric Anderson:
Hey, Andy, how about you? Anything to add?
Andy Marcell:
Yeah, I think clients recognize that risk and human issues are intrinsically linked, and the solutions to some of the biggest challenges we see today require a holistic approach. Talent is increasingly showing up when we think about risk. In fact, the failure to attract and retain top talent ranked number four in Aon's latest Global Risk Management Survey, the highest ranking since we launched the survey. It is very apparent that C-suite decision-making will need to be informed by both risk and human analytics as we look to protect their people and grow their businesses.
Eric Anderson:
Let's turn now inside of Aon and how we're looking at accelerating solutions for clients in the face of these four trends. Maybe Andy, I'll start with you. From a risk capital standpoint, looking at these trends of trade, technology, weather, workforce, how is risk capital thinking about approaching our clients?
Andy Marcell:
We also see an opportunity to create new pathways to alternative sources of capital, creating maximum tension around capacity and terms and conditions for our global client placements. We can bring additional sources of capital from areas like pension funds and sovereign wealth to create more capital solutions for our global clients. In terms of client solutions and need, there is a clear desire to raise understanding of the protection gap with only 31 percent of losses from natural catastrophes insured in 2023. Organizations need to ensure they're adequately covered as they work closely with insurers to identify opportunities to enter new markets.
Eric Anderson:
Thanks, Andy. Hey, Lambros, how about from the human capital side?
Lambros Lambrou:
Yeah, thanks, Eric. On the human capital side, we see the power of our connected health, wealth, and talent expertise creating additional value in three primary ways. The first is actionable people analytics, the second, newly-connected people solutions, and then finally, linking risk capital and human capital. Perhaps I'll share a couple of examples. Today, more than 10,000 client organizations provide Aon with extensive workforce data. We recently used our data sets to proactively work with several large multinational organizations with a large and younger female population.
In our conversations, we discussed how improving access to fertility benefits and enhancing family leave and caregiving policies could create massive competitive advantages and improve long-term retention rates. In another example, our human capital team partnered with healthcare systems and client companies in Europe where national healthcare systems are struggling to keep up with rising demand for services due to shifting demographics and inadequate staffing levels. Our connected approach allowed us to rethink their talent strategies and fill coverage gaps through expanded use of voluntary benefits, like private health insurance.
Eric Anderson:
I'd like to thank Lambros and Andy for joining us here today, and to find out more and to read the report, please go to aon.com. That's our show for today. Thank you all for listening, and in the next few months we'll have more special episodes looking at each of these four themes in depth. Until next time.
Outro:
Thanks for tuning in to the latest episode of “On Aon” with our episode host, Eric Andersen, and today’s experts, Lambros Lambrou and Andy Marcell, for a discussion on Aon’s 2024 Client Trends Report. If you enjoyed this episode, don’t forget to subscribe wherever you get your podcasts, and stay tuned for our next conversation featuring industry experts bringing you the latest on topics, including climate risk, workforce wellbeing, ESG trends, and much more. Be sure to check out our show notes and visit our website at Aon dot com to learn more about Aon.