Bryon Ehrhart was appointed CEO of Aon Benfield Americas, a reinsurance arm of London-based Aon P.L.C., in September. Based in Chicago, he joined Aon in 1994 and has held various roles at the brokerage. He also has served as an advisory board member for the Katie School of Insurance at Illinois State University. He recently spoke with Business Insurance Senior Editor Sarah Veysey about his plans for the unit and reinsurance market conditions.

Q: What lessons are you bringing from your previous roles within Aon to your current position?

A: There are certainly lessons around innovation. Aon Benfield has always been innovative, but the pace of innovation needs to increase to match the pace of new capital flows that will find a place in the reinsurance business. The value proposition of reinsurance has improved, and it will continue to become an even more accretive source of underwriting capital.

Q: How will your background in the investment banking, catastrophe bond and sidecar activities help you in your current position?

A: Reinsurers will more often engage in capital management techniques that will involve the capital markets. Reinsurers have already begun taking a more active role in sponsoring catastrophe bonds and sidecars to lower their cost of underwriting capital. They will also begin managing insurance-linked securities and collateralized reinsurance funds. These activities will improve the value proposition of reinsurance and lower the cost of our clients' underwriting capital.

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Q: How can buyers of reinsurance reap the benefits of plentiful capacity from a variety of sources?

A: Until about February of 2013, reinsurers saw nontraditional capital as competitive. But now they are seeing it as a way to improve their value proposition to clients. Reinsureds had to, in the past, do things like catastrophe bonds by themselves. But as traditional reinsurers start to incorporate the new value from new capital, it can be really helpful to reinsurance buyers.

Q: How has the reinsurance industry changed during your career?

A: It has changed at an accelerating pace. The changes were mild when I started in the business at Aon in 1994. Quite a lot of the business then was with direct markets.

But over those 20 years, clients have really seen the value in advocacy and want to explore the creativity of the entire market. The traditional reinsurance business is transforming with alternative capital.

Q: What are your ambitions for Aon Benfield Americas?

A: Aon Benfield needs to continue to lead innovations that benefit our clients. The transitions that are occurring in the market are unprecedented, and our clients have the opportunity to think very differently about how they manage peak and nonpeak risks. It's a changing time for our clients.