LONDON, Oct 23 (Reuters) - The global insurance group Willis Group has signed up three partners to a scheme that automatically allocates them a slice of business written in speciality areas such as energy or aviation.
London-based insurer Hiscox, People’s Insurance Company of China (PICC) and Warren Buffett’s Berkshire Hathaway are the first participants in the “Global 360” scheme, Willis said on Wednesday, adding that it was in discussions with other potential members.
Complex policies are usually signed in London’s insurance market according to terms set by a lead underwriter who takes on the largest single proportion of the risk while the remainder is divided between other insurers willing to come in on the deal.
The new scheme functions by automatically allocating the ‘bottom 20 percent’ of any risk to the insurers who have signed up, adding insurance capacity to areas that can be difficult to insure.
“By providing a door though which additional capital can access portfolios of risk, our clients will benefit from increased price competition and faster placements and claims agreement,” said Steve Hearn, Willis’s deputy chief executive.