Aon has outlined ways for insurers to achieve top performance across market cycles after identifying traits shown by the most successful companies.

The broker has drawn on research analysing the performance from 2013 to last year of 120 reinsurers and insurers with nearly $US2 trillion ($3.1 trillion) in gross written premium.

Aon says top performers sustain growth and underwriting profits even as rating indexes decrease, while insurers in the bottom quartile grow faster than the market during soft phases of the cycle, to the detriment of underwriting profits.

“In the insurance industry, resilience isn’t about surviving one phase of the cycle – it’s about outperforming through them all,” Aon’s report says. “Insurers must deliver profitable growth and strategic relevance whether the market is softening or hardening.”

The global broker says insurers must redefine their growth strategies and ensure capital structures are aligned, invest in data-driven decision-making, understand client and distribution channel needs and rethink talent strategies for the next cycle.

“Insurers must move beyond market generalities and be forensic about rate adequacy, insurability and loss cost trends.”

Aon notes AI and analytics are transforming how insurers detect fraud, engage clients and model loss costs, but many still struggle to connect insights with business decisions, especially in day-to-day underwriting.

Last year, the 120 insurers delivered a 14.7% return on average equity, up 6 percentage points on the 10-year average to 2023.

Segments with the best combined operating ratios have the most globally diversified portfolios in both insurance and reinsurance, and are the most specialised, including Lloyd’s/Bermuda companies and specialty primary insurers.

Aon strategy and technology group CEO Sherif Zakhary says insurers must pivot from being product suppliers to “performance partners” that are proactive, insightful and attuned to client needs across geographies and sectors.

“Legacy operating models, rigid capital structures and siloed distribution strategies are holding some insurers back,” Mr Zakhary said.