A new capacity deal being provided on the Lloyd’s market by US insurance giant Berkshire Hathaway has already been accessed by Aon Australia.

Berkshire Hathaway has given Aon’s managing general agency at Lloyd’s delegated authority to grant cover on its behalf, providing a 7.5% layer of most Aon retail insurance risks that are transacted through Lloyd’s.

The arrangement is known as a sidecar, and has caused heated debate among Lloyd’s brokers and underwriters. Australia is Lloyd’s third-largest market.

Aon Risk Services Australia MD of Broking and Chief Broking Officer Pacific James Baum told insuranceNEWS.com.au the local arm of the global broker has already accessed the sidecar.

While he will not say how much business Aon Australia expects to put through the new facility, he says clients could benefit from lower premiums.

“It certainly would not disadvantage them from a pricing standpoint, and it definitely won’t cost them more,” he said. 

Willis Group is understood to be close to finalising a sidecar arrangement that will be even larger than the Aon facility.

London market sources say it will affect up to 20% of the specialty insurance Willis transacts through Lloyd’s syndicates. The Willis book includes marine, energy, aviation, construction and property and casualty portfolios.

Willis Australia has declined to discuss the plans for its facility, which is to be known as Global 360. A spokesman told insuranceNEWS.com.au it will be in a better position to comment after June 30. 

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