New insurance facility to offer limits of $250m per insured
Insurance broker Willis has teamed up with Berkshire Hathaway to provide additional underwriting capacity to the oil and gas industry.
Willis said the new facility, which will be underwritten by Berkshire Hathaway International Insurance Limited, has been created in response to requests from the industry for further sources of capital to meet their insurance requirements. It was implemented on 31 December.
This facility is designed to underwrite a 10% follow line, subject to an overall limit of $250m for any one insured, and will be used subject to each client’s individual agreement.
The facility is designed so that where called upon by the insured, Berkshire Hathaway will follow, or improve upon, the terms and conditions set by the leading insurers, as well as follow claims payments agreed by the leading insurer. The set-up costs and administrative charges will be borne by Berkshire Hathaway.
Berkshire Hathaway International Insurance Limited is rated AA+ by rating agency Standard & Poor’s.
Willis’ new facility closely follows the announcement that reinsurance broker Aon Benfield will manage a consortium of (re)insurers called SOSCover, which aims to deliver higher coverage limits for sudden oil spills in US waters.
Fellow reinsurance brokers Guy Carpenter and Willis Re are working alongside Aon Benfield as placement advisers to the consortium, which was originally conceptualised by Munich Re. Munich Re announced its idea for the initiative at the 2010 Monte Carlo Rendez-Vous.