Leading reinsurance broker believes demand will rise next year

Aon Benfield chairman Grahame Chilton has said he’s “thrilled” to be back at the company he helped found, following the management overhaul in April that replaced chief executive Andrew Appel with Dominic Christian and Mike Bungert.

Chilton said Aon’s group chief executive, Greg Case, had made a brave decision in replacing Appel, now Aon Corporation’s chief operating officer. Speaking to Insurance Times sister Global Reinsurance at the Reinsurance Rendez-Vous in Monte Carlo, he said: “Andrew Appel did a fantastic job [at integrating Aon and Benfield following the acquisition in 2008]. He was not steeped in one firm or another and he made sure we took the best people and focused on our customers.

“The decision taken to let the practitioners of those businesses run that model was a really tough decision and a really brave one. I would not have hung around if I felt we had got it wrong.”

Chilton, who ran Benfield before the sale to Aon, has retained his role as vice-chairman of Aon Corporation, a role he took on after the sale. He said: “I'm thrilled to be back as chair of Aon Benfield. I never really went away. It’s a business I have been in for 25 or 30 years and I try to help in any way I can. Am I actively trading? No. But there are not many things I’ve not seen or done at some stage and people find that helpful.”

Chilton, a renowned reinsurance broker, said he was optimistic Solvency II would drive an increase in demand for reinsurance from next year. “A lot of people are working out that the markets do not reward volatility,” he said. “I think it’s good news.”

He also said the drive towards diversification of risk was giving brokers an advantage over direct reinsurers.

“More and more people are concerned about the concentration of risk, and in many areas where it has been difficult for the broker to gain traction over direct reinsurers, people want a choice. There are areas where I am now seeing opportunities.”

Asked about smaller reinsurance brokers’ plans to challenge the top three, Chilton said: “If we [Benfield] as a board decided it was in shareholders’ interests to sell to Aon, I don't understand why anyone a quarter of our size would determine they want to do otherwise. I don't think it's in the customers’ or the buyers’ interests.”