Willis Group Holdings Plc, the third-largest insurance broker by market value, agreed to allocate as much as 25 percent of premiums from the London corporate specialist market to pre-selected insurers.
Underwriters in the group include Warren Buffett’s Berkshire Hathaway Inc., People’s Insurance Company (Group) of China Ltd. and Hiscox Ltd., said Colleen McCarthy, a spokeswoman for the London-based broker. She said Willis plans to make an announcement tomorrow about the program, reported earlier by the Financial Times.
Brokers have signed agreements with underwriters in recent years to ensure capacity for clients. In return, insurers get access to premiums from risks that meet their criteria while avoiding costs typically associated with underwriting.
Aon Plc, the second-largest broker, announced a similar deal with Omaha, Neb.-based Berkshire in March to shoulder risks from the Lloyd’s of London market. Berkshire agreed to provide Willis’s clients additional coverage for oil drilling following BP Plc’s 2010 spill in the Gulf of Mexico.
Willis climbed 1.5 percent to $45.89 at 3:10 p.m. in New York. Marsh & McLennan Cos. is the largest insurance broker.
(Editors: Dan Reichl, Dan Kraut)