Aon Benfield Fac, the facultative division of Aon Benfield, the world’s premier reinsurance intermediary and capital advisor, has finalized the first ever capital markets transaction to cover facultative risks.
The groundbreaking two and a half year program, Fac Pool Re, will transfer large complex global property and catastrophe facultative risk from its clients’ portfolios into the capital markets.
Pooling risk in this way allows Aon Benfield clients to access individual account facultative capacity that may have been unavailable on a standalone basis. The contracts have been transferred into the capital markets in conjunction with Execution Limited.
Hannover Re has allocated approximately USD5m to the transaction, and in addition will assume any losses that exceed the USD60m capacity of the program.
Elliot Richardson, Chief Executive Officer of Aon Benfield Fac, said: “Fac Pool Re is a world first, and its success will give both clients and investors confidence, and pave the way for further transactions of this type. This program is accessible only to Aon Benfield clients, and we are proud to offer them such an innovative route to capacity in this exciting and dynamic market.”
Paul Summers, Managing Director UK of Aon Benfield Fac, added: “This transaction is unique. It has helped to provide additional capacity in a burgeoning facultative market where supply does not currently meet demand. With this transaction Aon Benfield has helped to bridge the gap to the benefit of our clients.”
Fac Pool Re will be placed on a quota share basis with two risk tranches.
