KCIC Consultant Mary Elizabeth Mullins contributed to this post. In my February 10 blog post “The Hunger for Float: Two New Berkshire Deals”, I noted the big surprise about both the Hartford and AIG deals – that both insurance companies will continue to handle claims and collect reinsurance. This represented a significant departure from what […]
Warren Buffett published his annual Letter to Shareholders on February 25. As in the last two years, this blog post summarizes a few observations and takeaways, though I encourage you to read the letter itself – it rarely disappoints! My observations this year are focused on three subjects in the report: How to measure Berkshire’s […]
Two new retroactive reinsurance deals involving Berkshire Hathaway were announced in January. First up, on January 3, was The Hartford Fire Insurance Company and certain of its affiliates (collectively “Hartford”), which ceded existing net asbestos and environmental (“A&E”) reserves to National Indemnity (“NICO”), a Berkshire Hathaway subsidiary. The terms of the deal are for a […]
In an interesting new development, it appears Berkshire Hathaway may reinsure some of Swiss Re’s legacy U.S. liabilities — notably asbestos, pollution and health. According to The Insurance Insider, Swiss Re is in talks with Berkshire Hathaway as part of a $1B internal restructuring of its legacy business. Such a deal would have two important consequences: […]
KCIC Senior Consultant Rachel Donze contributed to this post. In a previous post reviewing Berkshire Hathaway’s annual Letter to Shareholders, we discussed the importance of cash to the Berkshire enterprise. Such discussions inevitably focus on a main driver of that cash balance: “float”, which is generated through Berkshire’s ever-growing insurance operation. Float provides a source […]
A significant leadership shift has occurred at Berkshire Hathaway Inc. — one that may foreshadow future developments. The Wall Street Journal reported this week that Ajit Jain — already heavily tipped to be Warren Buffett’s successor — has received a higher profile in the conglomerate. He now effectively is in charge of all reinsurance operations. The added […]
Berkshire Hathaway published its 2015 Annual Report this past weekend, including the much-anticipated “Letter to Shareholders” from Mr. Buffett. This year’s letter was somewhat less newsworthy than last year’s, which was specially expanded to mark the 50th anniversary of Buffett taking charge of Berkshire Hathaway. Here are my preliminary observations: Financial Performance 1. Financially, according […]
The motto of the IRONMAN triathlon series is “Anything is Possible”. Having recently completed my first IRONMAN, I might adapt that to: “Many challenging things are possible with focus, preparation and good execution”! 2015 was an enormously important year in the life of KCIC. In fact, I think it likely that I will hereafter mentally […]
It was a privilege to participate on the panel for the plenary session “Bending the Cost Curve” at this year’s ABA Conference in Tucson. It was also a distinct pleasure to be in the midst of the warmer climate and spectacular mountain scenery of Tucson and escape the winter storm that bore down on the East […]
The Berkshire Hathaway Letter to Shareholders is always an eagerly anticipated event on the financial calendar. It was published this past weekend with Berkshire Hathaway’s 2014 Annual Report and the National Indemnity Company Annual Statement. I gave the documents an initial read last weekend, focusing on areas of the Berkshire business model most relevant to […]
