Irish government-owned medical insurer Vhi Healthcare has extended its reinsurance accord with Berkshire Hathaway’s Berkshire Hathaway Reinsurance Group.
Vhi Healthcare has submitted an application for authorization to the Central Bank of Ireland.
“Putting in place a long-term reinsurance arrangement and demonstrating that the business was sustainable in the long term was critical in making our submission to the central bank,” explained Vhi Chief Executive Officer John O’Dwyer.
Follow-Up to One-Year Deal
The accord follows a one-year deal in July 2013 that provided reinsurance on half of Vhi Healthcare’s policies.
O’Dwyer pointed to the company’s improving financials and noted that “Vhi Healthcare continued to perform well in a challenging market in 2013.”
He also noted the new accord keeps taxpayers from having to put €200m into the company and will keep down premium hikes for the insurer’s over million customers.
Eliminates EU Reserves Problems
The new reinsurance accord with Berkshire Hathaway should forestall fines from the EU over the failure of Vhi to put up sufficient reserves.
© 2014 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.