Aon has launched its Directors' and Officers' Risk Analyser in Australia for companies listed on the Australian Securities Exchange.
The tool is designed to help brokers and listed companies assess executive risk using Australian litigation and settlement data. According to Aon, the model draws on more than 30 years of local Directors' and Officers' claims, litigation and settlement information.
The launch extends a tool first developed for US-listed companies and follows Aon's earlier D&O Decoder product in Australia, which was intended to model shareholder class action exposure. The new version has been built for the local market and reflects Australian class action activity, regulatory settings and settlement practices.
Directors' and Officers' insurance covers company leaders against claims linked to decisions made in their roles. In Australia, the market has faced sustained attention as listed companies and their boards respond to class actions, regulatory investigations, and scrutiny over disclosure and governance.
The Analyser is intended to move discussions beyond peer benchmarking by helping organisations examine the scale and severity of losses specific to their own circumstances. It can also be used in discussions about insurance limits, programme structure and overall spending.
The application includes probabilistic loss forecasting, stock drop scenario modelling and total cost of risk analysis. Aon said these functions allow existing or proposed insurance arrangements to be overlaid on projected loss outcomes, giving insurance managers, Chief Financial Officers and boards a way to test how different scenarios could affect financial results.
The approach is designed to show where losses may exceed core or excess layers of cover and where an insurance programme may need further review. It also allows clients to model specific events, adverse market movements and a range of possible loss outcomes.
Julie Hamilton, National D&O Practise Group Leader for Australia at Aon, described the pressures facing company leaders in the local market.
"Boards and executives in Australia are navigating an increasingly complex risk landscape, influenced by class action activity and regulatory scrutiny," Hamilton said.
She said the tool stands out for its use of local information rather than assumptions imported from overseas markets.
"Aon's D&O Risk Analyser is differentiated by its focus on Australian data, combined with dynamic, regularly updated analytics that brokers can use with clients to support discussions around potential loss severity, stress-testing scenarios and more informed conversations about risk and insurance," Hamilton said.
Local focus
The Australian D&O insurance market has changed markedly in recent years, with insurers, brokers and listed companies paying closer attention to securities class actions and settlement costs. Participants have also faced pressure to justify how much cover to buy and how that cover is structured, especially as boards seek to balance protection with cost.
Aon positioned the new tool as a response to that shift. Rather than relying mainly on comparisons with industry peers, the Analyser is intended to let companies test their own exposure under stress and consider the trade-off between retention and risk transfer.
Alistair Clarke, Head of Specialty for Australia at Aon, said insurance buyers are under greater pressure to explain those choices internally.
"The Australian market has evolved beyond standardised approaches to program design," Clarke said.
"Insurance managers and CFOs are increasingly expected to justify decisions on limits, structure and spend. The D&O Risk Analyser is intended to support clearer, evidence-based discussions by enabling boards and management to better understand those decisions and move towards more evidence-led conversations about risk and program structure," Clarke said.
The product forms part of Aon's wider analytics offering across risk and insurance. In Australia, the emphasis for this release is on listed companies that need to assess executive exposure against local claims experience, market conditions and governance expectations.
The focus on Australian data may prove important in a market where class action patterns, court processes and settlement outcomes can differ from those in the US and UK. For boards, finance leaders and insurance managers, those differences can shape decisions on programme design and the amount of cover considered appropriate.
The tool is designed for use by Aon brokers working directly with ASX-listed clients, with the output intended to support discussions about loss severity, scenario testing and insurance structures.