In a recent article, global broker Aon has highlighted that the continued growth of alternative capital sources is enabling more efficient risk management by bringing solutions closer with underlying risks.
Aon suggests that risk buyers can more readily access these alternative capital sources through a risk capital strategy approach, which can help diversify exposures and enhance resilience, allowing businesses to make the most of favourable market conditions.
Moreover, a risk capital strategy combines traditional risk transfer with alternatives such as reinsurance, structured solutions, parametrics, captives, and insurance-linked securities.
These alternative risk transfer methods provide companies with direct access to capital, enabling cost savings and tailored risk management that balances risk transfer, retention and alternative solutions.
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