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Gregory Case, president and chief executive officer of Aon Corp., recently addressed a gathering at Lloyd's of London on the topic of the changing face of global risk. He spoke afterwards to Business Insurance Europe about his views on risk, and Aon's plans for Europe.
Q. Speaking at Lloyd's recently, you also spoke of risk as opportunity. How can risk managers encourage their companies to take advantage of upside risk?
A. The best risk leaders see risk as an opportunity first and a downside second. Before they can communicate their views across the company, they need to understand the risk profile and have a clear perspective on the opportunities and risks for the company. They can then put forward views that can help the company turn action into value. And by value I mean improving operational performance and strengthening the balance sheet.
Q. What opportunities does this new perspective on risk afford risk managers?
A. It's more a complete view than a new perspective. By having an understanding of the overall risk map, they can have an impact on the company's performance. They need to integrate this mapit is essential to addressing the question of value.
Q. How can brokers help?
A. As advisers, brokers are in a unique position: from a broad-based view, they can advise risk managers on how they think about risk, and they can give specific ideas on how they can help their firms.
Q. What are your plans for Aon in Europe?
A. Over half the company's operations are based outside the United States, and Europe is an important stronghold. When I took up my position on April 4, 2005, four days later I came to Europe. Growth in Europe and strengthening our position there on behalf of our clients is critical. Our biggest acquisitions in the last year have been in Europe. We're excited about the investment opportunity there: we were in investment mode in 2006investing in people, capability and systems. We're already in 120 countries worldwide, so for us, it's now more about strengthening our position than expanding. We've been making significant investments in the BRIC countriesBrazil, Russia, India and Chinaparticularly the last three.
Q. How closely is Aon following the ongoing European Commission inquiry into business insurance?
A. We're following it very closely. The inquiry is very important to us and to our clients. Aon has operated in a very transparent way, and we'd encourage the European Commission to take all actions necessary to help clients understand the value-for-price trade-off. We'd love to see the industry do that. Aon absolutely supports European risk managers' calls for full transparency on brokers' earnings.
Q. Of the four biggest insurance brokers, only Aon saw a dip in profits last year. Is that a concern, and how do you plan to rectify the situation?
A. Aon has been reshaping its portfoliowe've done a whole set of things including selling Aon Warranty Group for $800 million. What we're looking at is that our core operation performance was up 43%that's how we gauge performance, and we've done extremely well. We've grown organically, we've expanded the margins and we've increased our operating income.