Aon arranges new five year insurance deal for BAE Systems
BAE Systems, the global defence, security and aerospace company, has signed a five year insurance deal through its insurance broker Aon and with its partner insurers. This insurance programme is aligned to the company’s five year business planning and budgeting cycle and ensures long term cost certainty at a time when premiums are predicted to increase in 2009.
BAE Systems is the first private sector business to adopt Aon’s aligned long term programme (ALTP) – an insurance package that supports an organisation’s long term financial planning. The deal was initially pioneered in March 2008 for regulated business Network Rail to fit in with their regulatory period from 2009-14.
The insurance programme for BAE Systems provides certainty of cover and pricing for property and general liability risks with significant capacity for catastrophes, including earthquake and windstorm, which traditionally renew on an annual basis.
In conjunction with Aon, BAE Systems has focused on building partnerships with insurers, enabling underwriters to become more familiar with the company’s financial strategies and in turn allowing the company to negotiate the best cover and price.
Trevor Young, Aon’s strategic account broker for BAE Systems, said: “BAE Systems deserves credit for its commitment to nurturing insurer relationships to meet the wider business goals. The deal is key to supporting the company’s defined financial strategy and is a quantum step away from the annual burden of the renewal process. The placement of the insurance programme also comes at an opportune time as we enter a difficult market cycle that could see premium increases.”
Paul McDonald, Director of Insurable Risk Services at BAE Systems commented: “Our partnership evolution with insurers and Aon means we’ve achieved absolute cost and capacity certainty, removing volatility in our insurance programme. This is critical for our businesses given the long-term nature of our contracts.”
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