Is Aon losing its GRIP?

In Germany ill will is growing over the attempts of large brokers to generate additional streams of income.

Market sources revealed that Aon has been asked by Deutsche Bank not to store data about its risks anymore in the broker’s international information system, the Global Risk Insight Platform (GRIP). At this stage only a small number of other companies have made similar demands.

While Aon confirmed this was the case Deutsche Bank did not want to comment. The story emerged at the DVS risk management conference in Munich, where 590 risk and insurance professionals gathered to discuss issues in the German market.

Using the GRIP system Aon collects information about all types of risks and the insurance offered in various markets. The database offers a detailed overview of market trends and the broker can then sell this information to industrial insurers for a high fee. The data is passed on anonymously.

Insurers can use the data to do such things as test their competitors appetite for certain risks.

Allianz Global Corporate and Specialty, Talanx, Axa and Zurich are all understood to have been engaged with over the use of the data, according to Herbert Fromme a German financial journalist who investigated the styory on behalf of StrategicRISK.

Some risk managers are extremely resistant to the idea that the GRIP information should be sold onto insurers, mainly on anti-competitive grounds. They believe the information shared between client and broker is confidential and should be treated as such.

Cost pressures on the big brokers, however, are so huge that they are looking at all possibilities to generate new income.

Speaking at the DVS conference on the morning after StrategicRISK broke this story Aon’s chief executive Greg Case defended GRIP. He said the system was “overwhelmingly driven by client needs” and helped improve the risk transfer process. But if any risk manager wanted to remove their data from the system Aon would do so, he added.

In the same keynote speech, Case also defended Aon’s decision to resume taking contingent commissions-a move that has annoyed some insurers (who pay them) and risk managers (who see them as a conflict of interest). Case said Aon is fully transparent with all its clients about the payments it receives.