Reinsurer in $1bn dispute with Berkshire Hathaway
Warren Buffett’s Berkshire Hathaway is claiming as much as $1 billion in damages from Swiss Re, the reinsurer it propped up during the financial crisis with an emergency capital injection.
Swiss Re quietly disclosed in its 104-page earnings report last month that Berkshire was making various allegations that the reinsurer said were “without merit”. The dispute relates to losses Berkshire has endured in its deal to provide what Swiss Re described as retrocession – in effect, reinsurance for reinsurance – to the Zurich-based company’s US life and health arm. Berkshire last year sustained a $642m pre-tax underwriting loss arising from the arrangement.
Swiss Re is Europe’s sixth biggest insurance group by market capitalisation.
– Copyright The Financial Times Limited 2012