Aon aiming to strategically draw a line under Vesttoo issue: Andersen
Aon established a $197 million reserve for legal settlement expenses related to the letter of credit (LOC) fraud at insurtech Vesttoo as an attempt to strategically draw a line under the issue, Eric Andersen, President of Aon plc said today, also highlighting that meaningful recoveries are expected to be made to reduce the overall cost to the company.
As we reported earlier today, insurance and reinsurance broking giant Aon today recognised a significant legal settlement expense reserve amounting to $197 million related to the Vesttoo fraud scandal, in its fourth-quarter of 2023 results.
Responding to a question about the Vesttoo fraud related legal reserve Aon has established, Andersen said during the firm’s earnings call just now, “I would just open by saying that, we strategically wanted to draw a line under this issue for our market partners and for ourselves, so that we were able to move forward together as partners.”
Adding, “So the effort was made to come to an agreement with each of the affected parties.”
So far, we only know of one agreement that has been made, between Aon and Porch Group.
That has a $30 million price tag attached, as well as other reinsurance trading relationship benefits. So it seems Aon must have also reached additional settlements with other trading partners, as it seeks to put the whole Vesttoo fraud issue behind it.
Andersen continued to explain that, along with its trading partners, Aon is making efforts to move forwards from this issue, while also pursuing potential recoveries that would reduce the legal settlement reserve set aside.
He explained that this is “So that we could then continue to both, one trade forward, but then also begin to work on recoveries together.”
Adding that, “We do see an opportunity for recoveries that will happen over time, as the bankruptcy process runs its way through.
“We’re confident that we’ll be able to recover, you know, a meaningful amount.”
Read all of our coverage of the alleged fraudulent or forged letter-of-credit (LOC) collateral linked to Vesttoo deals.
