Independent Insurance's former chief executive Michael Bright personally brokered the failed insurer's core reinsurance programme, Insurance Times has found, in a move described as unusual by insurance experts.
Last week, Insurance Times reported that Aon had “provided certain actual and technical support to Independent”, but denied it had provided brokerage services or received any commission from Independent's “core programme of reinsurance”.
This week, a source close to Bright said Aon had broked Independent's excess of loss reinsurance.
However, Bright himself dealt directly with the reinsurers, including GE Capital's subsidiary Ireco, on the core reinsurance programme. Aon's Terry Masters acted as a consultant in these deals, which started in 1997 and were renewed in consecutive years.
“It's very uncommon. It involves a lot of travel, meetings, negotiations – that's what you pay your broker for,” the source said.
GE Capital refused to comment.
Aon Re confirmed it broked Independent's excess of loss cover for “several years”.
Insurance analysts agreed it was highly unusual for a UK chief executive to take a personal hand in reinsurance deals. HSBC's David Hudson said companies that did not use brokers usually had a reinsurance team lead by the finance director.
He said one reason for cutting out the broker was to reduce costs.
Standard & Poor's Dominic Skeet said it was the first time he had heard of a chief executive being solely responsible for broking a reinsurance programme.
