Aon's CEO Greg Case says the Lloyd's market should not reactnegatively to its co-insurance agreement with Berkshire Hathawayand indicated it could bring positive development to the Lloyd'smarket.

Aon Risk Solutions announced an agreement with BerkshireHathaway International Insurance Ltd. in March to provide sidecarcapacity to retail insurance clients across all industry segments.The deal brings highly rated paper to all eligible business placedby Aon Risk Solutions where the Lloyd's market participates. Themove, according to reports, opens up more than 7 percent of Aon'splacements at Lloyd's to Berkshire Hathaway, upsetting themarket.

During a conference call discussing the insurance broker's 1Qresults, Case says the move is a client solution and that “clientreaction from the announcement has actually been quite positive.”He says that for clients having trouble obtaining coverage, thisagreement provides capacity “that just wasn't there before.”

For Lloyd's, Case says, “We actually provide some positivemomentum into the Lloyd's marketplace overall, and we're going tocontinue to discuss it with them,” adding that Lloyd's is a veryimportant partner and the discussions will continue. He notes thatAon is roughly 23 percent of Lloyd's business overall, and hebelieves, the single largest partner. He emphasizes that theprogram's sole focus is to benefit Aon's customers.

“From our standpoint, we see this as a net positive overall,”says Case.

Aon, headquartered in London, says 1Q net income grew 9 percentto $272 million on revenues of $2.9 billion, an increase of $74million or 3 percent. The broker reports gains in all segments ofits business with commissions and fees in its insurance division up4 percent to $1.96 billion and organic growth up 3 percent. In itshuman resource division, revenues increased 1 percent to $954million.

The insurance results reflect retention rates of more than 90percent on average and new business generation of approximately$240 million across the firm's retail business and regions.

In reinsurance, organic growth was 1 percent, down from 5percent for the same period last year. Case says record capacitylevels have cedents retaining more risk “driving an unfavorablemarket impact in the quarter.” The segment saw growth in consultingservices and facultative placements, as well as capturing newbusiness.

Aon's human resource business is still suffering the adverseeffects of the economic downturn, but Case says there is optimismfor improvement in this area as clients are renewing “their focuson talent, retention, development and engagement to preparethemselves for renewed long-term growth.”