Chaucer reduces third party limit
Lloyd's insurer Chaucer Holdings is to reduce the third party property limit on its motor policies to £20m per incident.
The change is understood to come into effect on 1 July.
Underwriting director Bob Stuchbery said the insurer had imposed the limit because reinsurers were looking to cap their third party property limit on motor policies.
"Reinsurers have already imposed caps on our fleet business and they are looking to extend these caps to other motor lines," he said.
"We feel the limits are in line with the rest of the market. We were originally asked to cap it lower but we held out for £20m."
Last month, it was revealed that motor insurers were set to mount a statistical challenge to reinsurers over unlimited third party liability cover.
It is believed that a number of motor insurers fear they will have to pull back from the market if reinsurers continue to take a hard line on the provision of unlimited third party cover.
The ABI motor committee has begun "information gathering" with UK primary insurers to find out the extent of the problem.
Swiss Re is among the major reinsurers to have announced it will stop writing unlimited third party liability cover from January 2004.
Reinsurers are nervous about providing unlimited cover for motor insurers following the Selby rail crash in February 2001.
The Selby crash was caused when a train collided with a car that had crashed through a barrier on the M62.
The total cost to insurers and reinsurers of the crash has been estimated at £50m.
Fortis was liable for the first £1.5m of this, but its reinsurers, principally Munich Re, were liable for the rest.