Aon CEO says Berkshire Hathaway deal good for Lloyd's market
LONDON (Reuters) - The head of insurance broker Aon has mounted a defense of a deal signed last year with Warren Buffett's Berkshire Hathaway that some fear could weaken the Lloyd's insurance market, arguing it is good for London.
In a speech on Thursday in London's Lloyd's building, Aon Chief Executive Greg Case said the agreement, whereby the broker allocates 7.5 percent of the business it places in the market to Berkshire Hathaway in return for passing on some of the risk, benefited the centuries-old market.
Critics had feared it would sideline underwriters operating in the Lloyd's market, putting pressure on their businesses, but Case argued it was helping bring more money into the market, fuelling overall business volumes.
The volume of premiums placed by Aon clients in the market increased last year, he said.
"The premium volume placed by Aon clients in Lloyd's increased 3 percent in 2013, which is actually 5 percent if you factor out the reduction in certain lines because of trade sanction issues," he said.
"Innovation... is good for clients, is in turn good for London, is in turn good for Lloyd's," he said.
Aon recently opted to relocate its headquarters to London from Chicago and is set to move into a new skyscraper, still under construction, that looms over the modernist building that houses the Lloyd's market.
In 2013 it signed an eight year sponsorship deal with football team Manchester United (MANU.N), which Case said had boosted brand awareness around the world for the firm in a way that had left him "stunned".
(Reporting by Chris Vellacott; Editing by Toby Chopra)