Aon Benfield fills motor retro gap

Aon Benfield has plugged a hole in retrocession cover for reinsurers writing motor business in the UK market, Insurance Times has learned.

At the beginning of this year, Bermuda-based reinsurance group PartnerRe withdrew from the UK market in motor retrocession – effectively reinsurance for reinsurers.

In its review of the 1 January renewals, Aon Benfield cited the withdrawal of unlimited motor retrocession capacity “by a significant reinsurer” as one of the factors pushing up UK motor reinsurance prices.

The retrocession business in question was written by Paris Re, which PartnerRe bought last year. Paris Re was formed from business originally written by AXA Re, which was transferred into a new company in 2006. PartnerRe was concerned about the accumulation of risk resulting from the combination of Paris Re’s motor retrocession book with its own existing reinsurance business, and so sought an exit.

“Exposure to periodical payment orders did play a role but the main driver of the decision to withdraw was the accumulation of risk,” PartnerRe’s head of global property and casualty, Alain Flandrin said.

However, a spokesman for Hannover Re said that Aon had found a replacement provider for the departing company.