Aon is a global insurance brokerage and professional services firm with approximately 50,000 employees across 120 countries that offers a wide array of risk mitigation products and structured solutions. Aon’s Litigation Risk Group focuses on de-risking adverse outcomes in active and potential future litigation for corporate, private equity, hedge fund, law firm, and litigation finance clients through the use of insurance.
Aon has spearheaded the rapid development of this insurance market over the past five years with pioneering solutions like judgment preservation insurance, insurance-backed judgment monetization, and portfolio-based “principal protection” coverage for funders and plaintiff-side law firms. Aon’s Litigation Risk Group is the dominant market leader in the litigation and contingent risk space, having placed nearly $5 billion in total limits over just the last several years, including over $1 billion in limits in 2023 alone.
Website: https://www.aon.com/m-and-a-transaction/transactionsolutions/litigationsolutions.jsp
Founded: 1982
HQ: London (Global) and Chicago (US), with Aon’s Litigation Risk Group being based in New York
About Aon’s Litigation Risk Group:
Aon’s Litigation Risk Group works with a wide variety of clients across all industries and sectors of the economy, but the fastest-growing appetite for insurance solutions by far comes from litigation funders and other similar investors in litigation-related assets.
Aon helps these clients protect their downside in litigation-related investments in many different circumstances, whether protecting a judgment they have obtained in a case in which they invested at inception, wrapping a loan they are making to a plaintiff-side law firm with principal protection insurance, or insuring an entire portfolio of uncorrelated investments in cases at different stages of the litigation lifecycle.
Aon has fostered strong partnerships with dozens of insurance markets to bring our clients the most creative bespoke insurance solutions for the most complex litigation-related risks on the best possible coverage terms. As the Director of Underwriting for a well-established litigation funder on whose behalf Aon has placed over $70 million in limits across a number of different investments put it: “We have worked with the Aon’s Litigation Risk Group on a number of insurance policies over the years, and I can say unequivocally that they are second to none. Besides being fantastic to work with, the team was also able to leverage their litigation know-how and strong relationships with insurers to obtain favorable terms for each of our policies. Even when we had to file a claim on a policy, they jumped on it right away, handling it quickly and professionally without any need to involve a separate claims team. We have been very happy with our partnership.”
Points of Differentiation:
Innovation – Aon is a leader in terms of pushing the limits of what litigation and contingent risk insurance policies can do. While this area of the insurance industry got its start on the defense side in the context of M&A transactions, where what is now refered to as “adverse judgment insurance” or “AJI” was used to ring-fence litigation risks that were getting in the way of an acquisition, they were the first to place insurance on plaintiff-side judgments, which led to Aon coining the term “judgment preservation insurance” or “JPI,” which is now used industry-wide and beyond.
Aon was also the first to have the insight that once a judgment is insured, so long as the defendant is sufficiently creditworthy, the combination of “judgment plus JPI policy” can serve as collateral for a loan that can be made on more attractive terms than would be available without insurance. Aon was among the first broker in the insurance industry to facilitate loans against this combination of “judgment plus insurance,” a solution they named “insurance-backed judgment monetization,” and which has now also become widespread and provided a significant boost to the broader litigation and contingent risk insurance industry. Their team prides itself on finding new and unique uses for insurance to help our clients achieve their goals, and excels at using insurance capital to solve complex litigation-related issues.
Pre-Underwriting – Aon’s team of former litigators has earned a reputation for submitting to insurers only the highest quality risks, after thoroughly analyzing their merits before submission to insurers.
As one of the leading insurers in the litigation and contingent risk insurance space, Ambridge Partners, put it: “We’re always happy to receive contingent risk submissions from the Aon team. The deals are always pre-vetted and well-presented, and it’s clear that they’ve asked themselves ‘What would I want to see as an underwriter?’ – and then provide exactly that. It makes Aon’s deals very attractive easy for us to consider.”
And per Alston & Bird litigation partner Steve Penaro, “As outside counsel working with underwriters in the contingent risk space, when we see a contingent risk submission from Aon, we immediately know that is has been thoroughly vetted and the issues meticulously scrutinized. And, once the underwriting process begins, Aon actively partners with us to ensure all relevant information is readily available and all questions have been answered allowing for a smooth close. From the initial submission to the binding of the policy, Aon is there every step of the way.”
Given the explosive growth in this space, Aon values their underwriters’ scarce time, and enjoys a competitive advantage knowing that underwriters move Aon submissions to the top of their piles.
Relationships with Insurers – Aon is not only a market leader in terms of litigation and contingent risk insurance, but also other lines of insurance written by the same carriers such as representations and warranties and tax insurance.
As one lawyer we have worked with on policies for two different clients put it: “The Aon team did a magnificent job in placing adverse judgment insurance for one of my clients and judgment protection insurance for another. They have deep contacts with the insurance market, and it was apparent to me that insurers trust their expertise and judgment. I have not hesitated to recommend them to other attorneys.”
Given the volume of business that Aon does in the broader transaction solutions insurance market, they maintain deep relationships with insurers, and that benefits their clients by helping them deliver the best possible coverage terms, pricing, and claims service.
Key Metrics:
Aon’s Litigation Risk Group has placed billions of dollars in limits on litigation and contingent risks in the last several years, including ten separate insurance programs that each provided more than $100 million in coverage limits and four that provided at least $500 million in coverage limits.
The policies placed by Aon have arisen in a variety of procedural contexts and run the gamut in terms of subject matter and types of claims – commercial litigation, breach of contract, patent infringement, trade secret misappropriation, and antitrust, just to name a few. Aon has placed adverse judgment insurance on the defense side and judgment preservation insurance on the plaintiff side, including pre-trial, pre-judgment insurance for litigation funders to protect the value created by important evidentiary rulings that were the subject of interlocutory appeals.
Aon has also placed principal protection insurance on several hundred million dollars that have been invested into early stage, pre-complaint patent litigations across multiple unique patent families. They have procured insurance for defendants who have lost significant damages verdicts at trial against the risk that an appellate court will not reverse, and have insured against adverse outcomes related to regulatory processes. Put simply, as long as their team has access to sufficient underwritable information about the litigation risk to be insured, there are few limits on the kinds of cases or procedural postures that Aon can insure.
Jurisdictions and Sectors Served:
Aon’s Litigation Risk Group has insurance broking teams not only in the United States, but also in the United Kingdom (which can insure risks across much of EMEA), Bermuda, and Southeast Asia, which enables them to deliver to our clients truly global solutions across myriad jurisdictions.
While the core of Aon’s business remains insuring the outcome of judicial proceedings in the United States, they understand where to go to find appetite to insure litigation in other domestic courts, as well as insuring the outcome of international arbitration proceedings.
Key Stakeholders:
Stephen Davidson is a Managing Director and both the Head of Aon’s Litigation Risk Group and Head of Claims for Aon’s broader Transaction Solutions team. As Head of the LRG, Stephen works with clients and insurance markets on the development of litigation and contingent risk insurance. As Head of Claims, Stephen manages transaction liability claims – which includes not only litigation and contingent risk insurance claims but also representation and warranty and tax insurance claims – and has overseen and helped negotiate the favorable resolution of hundreds of such claims in North America and around the world. Prior to joining Aon in 2016, Stephen was a commercial litigation partner in DLA Piper’s New York office, and he began his career at Schulte Roth & Zabel LLP, where he worked as a litigation associate for several years.
Stephen Kyriacou is a Managing Director and Senior Lawyer in Aon’s Litigation Risk Group, and was the first insurance industry hire dedicated solely to the litigation and contingent risk insurance market, which he has been working to develop and grow since 2019. Stephen has twice received the designation of “Power Broker” from Risk & Insurance Magazine (in 2022 and 2023), which called him “a pioneer in judgment preservation insurance,” and is the only litigation and contingent risk insurance broker to have been so recognized. While Stephen places insurance across all of Aon’s solution lines, he specializes in single-case judgment preservation insurance and adverse judgment insurance placements. Prior to joining Aon, Stephen spent close to a decade as a complex commercial litigator at Boies, Schiller & Flexner, where he amassed significant trial, appellate, and arbitration experience representing both plaintiffs and defendants in the U.S. and abroad across a wide array of practice areas, and clerked in the U.S. District Court for the District of Columbia.
Ed Conlon is a Managing Director in Aon’s Litigation Risk Group, and is the team’s resident insurance industry veteran, having been in the industry for over 15 years and having placed litigation and contingent risk insurance since 2015, when the market for such insurance was still in its embryonic stages. While Ed brokes across all of Aon’s litigation and contingent insurance lines, he focuses primarily on developing cutting edge bespoke portfolio-based coverage structures for law firms, litigation funders, and other investors in litigation. Ed also leverages his deep, battle-tested relationships across the broader insurance industry to bring new carriers into the growing litigation and contingent risk insurance market and to maximize limits and optimize coverage terms on Aon policies. Prior to his current role, Ed led Aon’s Financial Institutions Group and, before that, was a complex commercial litigator and ran a complex commercial claims desk at AIG.
David Hodges is a Vice President and joined Aon’s Litigation Risk Group in 2021. David brokes across all of Aon’s litigation and contingent insurance lines, and focuses primarily on single-case judgment preservation and adverse judgment insurance placements. Prior to joining Aon, David was a complex commercial litigator at Boies, Schiller & Flexner and Lankler Siffert & Wohl, and was also a law clerk for federal judges on the Second Circuit and D.C. District Court.
Bill Baker is a Managing Director in Aon’s Litigation Risk Group and joined the team in early 2020. Bill leads the team’s work on structured solutions, including loans that are collateralized by judgment preservation insurance policies and other financing solutions that are customized to meet the unique capital needs of our clients. Prior to joining Aon, Bill was an investment banker at various firms throughout a 15-year career, after which time he worked in private equity and corporate roles, including strategy, corporate development, and investor relations.
Mike Kenny is a Director in Aon’s Litigation Risk Group and joined the team in 2021. Mike is responsible for the team’s structured finance solutions, including premium finance and judgment monetization. Mike works with clients to structure bespoke credit transactions, allowing them to leverage the combination of their judgments and insurance to access the capital markets and obtain liquidity. Mike uses his industry relationships and a broad network of investors to help clients find the best deal terms and structure for their specific needs. Mike is also a licensed investment banker with Aon Securities. Prior to joining Aon, Mike was an investment banker at BTIG, where he focused on M&A, public and private financing, and strategic advisory for software industry clients.
