Category: Berkshire Hathaway Specialty Insurance

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Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Specialty Insurance Adds Inland Marine Insurance Products to U.S. Offerings

(BRK.A), (BRK.B)


Berkshire Hathaway Specialty Insurance (BHSI) has launched a full line of Inland Marine Insurance products in the U.S., including Builder’s Risks, Contractor’s Equipment, Installation Floaters, Inland Transit, Motor Truck Cargo, Warehouse Legal Liability and miscellaneous floaters.

Originally an outgrowth of marine insurance, inland marine insurance covers property that is mobile in nature or requires unique valuation that they own or have in their care. Among the types of property that are covered are those related to construction, transportation, fine art and communications.

“Our new Inland Marine products are designed to be a strong complement to our ocean cargo and contractor’s builder’s risk coverages,” said John Evans, Vice President, Marine, BHSI. “With our comprehensive suite of products and in-house expertise, we are well positioned for the opportunities of the marine space and look forward to providing market-leading service and solutions to our customers and distribution partners.”

BHSI’s Inland Marine coverages are available on an admitted basis in all 50 states and underwritten using American Association of Insurance Services (AAIS) policy wordings.

© 2015 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.

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Berkshire Hathaway Specialty Insurance Insurance

BHSI Adds Construction Insurance to Australia Underwriting

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance Company (BHSI) has begun providing comprehensive insurance and services for the construction industry in Australia, and has named a team of executives to oversee key areas of its construction insurance business.

Berkshire Hathaway’s Boston-based BHSI first entered the Australia market in April 2015, when it began providing all lines of General Business in Australia, and established operations in Sydney.

With its just announced coverage, BHSI is offering construction property, casualty, project professional indemnity, and project cargo insurance for construction classes in Australia and pairing coverage with in-house construction claims and engineering expertise.

“We are pleased to offer the Australian construction industry a multi-line insurance solution, backed by the deep expertise and financial strength of BHSI. Our team is rich in construction insurance experience and ready to provide sound, creative capacity and meaningful risk engineering to this important sector,” said Chris Colahan, President, Australasia Region, BHSI.

BHSI’s Construction Team

Cameron Holmes, Construction Manager. Cameron comes to BHSI with 15 years of construction and engineering experience. He was most recently National Underwriting Manager, Engineering, at IAG in Sydney. Prior to that, he was Underwriting Manager, Engineering, at Munich Re in London. He was Engineering and Property Underwriter at Munich Re in Sydney and, before that, Civil Engineer & Project Manager at Sinclair Knight Merz in Sydney. He holds a bachelor’s degree in Civil Engineering from the University of Sydney, a Graduate Certificate of Insurance from Deakin University, and an MBA and a Graduate Diploma of Financial Management from the University of New England.

Rob McNab, Underwriting Manager, Construction. Rob comes to BHSI with over a decade of experience focused on construction and engineering on both the underwriting and brokerage sides of the business. He was most recently Southern Region Manager, Construction & Engineering at CGU Insurance. He was also Major Projects Executive, Construction & Specialty Risks, Australasia, at Willis Australasia. He began his career as an Engineering Underwriter at QBE Insurance Australia Limited in Melbourne. He holds a Diploma of Financial Services from the Australian & New Zealand Institute of Insurance & Finance.

Mark Thompson, Senior Underwriter, Casualty. Mark comes to BHSI with 14 years of insurance industry experience with the last 5 years focusing on the construction industry. He was most recently Senior Casualty Underwriter at AIG in Sydney. Prior to that he was a Senior Account Executive at Marsh Australia and started his career as a Claims Adjuster at Aon UK. He holds a bachelor’s degree in Financial Services from Sheffield Hallam University, an Executive Certificate in Insurance from the University of Technology, Sydney, and is a Fellow of the Australian & New Zealand Institute of Insurance and Finance.

Patrick Whyte, Risk Engineering Manager. Patrick brings to BHSI 25 years of loss control and risk engineering experience. He was most recently Senior Risk Engineer at Allianz Global Corporate & Specialty in Sydney. Before that, he was Principal Consultant at the Australian Consulting Network Pty Ltd and Managing Principal at Marsh (Australia) Pty Ltd. He holds a bachelor’s degree in Chemical Engineering from the University of New South Wales and a master’s degree in Business Administration from the Australian Graduate School of Management.

David Cook, Claims Manager. David comes to BHSI from Suncorp Group, where he has spent the past seven years rising through the ranks to the role of Senior Claims Specialist, handling global, corporate, and major loss claims in Brisbane and more recently in Melbourne. He holds a Diploma in Financial Services from the Australian & New Zealand Institute of Insurance and Finance.

These new team members build on BHSI’s existing capabilities in Project Professional Liability, led by Matthew Clarke and Marine Project Cargo, led by Dimitry Zilberud.

All of these newly appointed executives are based in BHSI’s office in Sydney, except for Rob McNab who will be based in BHSI’s Melbourne office.

© 2015 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.

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Berkshire Hathaway Specialty Insurance

BHSI Begins Underwriting Marine Insurance in Australia and New Zealand

(BRK.A), (BRK.B)

As Berkshire Hathaway Specialty Insurance Company (BHSI) continues to expand in Australia and New Zealand, the company has announced that it has begun underwriting Marine Insurance in both countries.

The addition of marine coverage further rounds out BHSI’s offerings in Australasia. The company recently launched property, casualty, executive & professional and healthcare lines in Australia, as well as property, casualty and financial lines in New Zealand.

BHSI appointed Dimitry Zilberud as Head of Marine, and Mark Dixon as Marine Manager.

Through its local offices in Auckland, Sydney and Melbourne, BHSI now offers Marine Cargo (Ocean and Inland), Cargo Stock Throughput (STP), Carrier Goods in Transit, Carriers Liability, and Marine Project Cargo coverage.

“We are taking a flexible approach to marine risks, and are pleased to have Dimitry and Mark aboard to provide tailored solutions for customers and brokers navigating these exposures,” said Chris Colahan, President, Australasia Region, BHSI.

Dimitry Zilberud has nearly two decades of marine underwriting experience. Dimitry was most recently the Marine Underwriting Manager, Australasia at HDI-Gerling. Before that, he served as Marine Underwriting Manager, NSW/QLD, for ACE Insurance and was the Business Development Manager at WE COX London UK.

Mark Dixon was most recently Northern Region Marine Underwriting Manager and Senior Marine Underwriter, at HDI-Gerling. Mark has also held various Marine and Distribution positions for both Brokers and Insurers, and a graduate of the Royal Australian Naval College (RANC).

Zilberud and Dixon are both based in BHSI’s office in Sydney.

© 2015 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.

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Berkshire Hathaway Specialty Insurance Insurance

New Zealand Newest Country for Berkshire Hathaway Specialty Insurance

(BRK.A), (BRK.B)




New Zealand is the latest country for Berkshire Hathaway Specialty Insurance Company (BHSI). The insurer has received its license from the Reserve Bank of New Zealand and is underwriting property and casualty insurance through its new office in Auckland. BHSI can also offer Marine Cargo coverage in New Zealand, with Australia-based Mark Dixon also having New Zealand responsibility.

“We are pleased to bring the financially strong capacity and customer-centric underwriting and claims handling of BHSI to New Zealand. We open our doors in Auckland with a highly experienced team, a broad appetite for property and casualty risks, and a commitment to providing responsive and enduring solutions to the marketplace,” said Peter Eastwood, Global President and Chief Executive Officer of BHSI.

In April, BHSI received its insurance license to provide all lines of General Business in Australia, and established operations in Sydney. Chris Colahan was named President of BHSI’s Australasia Region. Four executives from AIG were also brought on board. In June, the company added casualty and executive and professional lines for hospitals and medical practices and facilities.

Country Manager for New Zealand Cameron McLisky said “I am delighted to introduce BHSI to the New Zealand marketplace. We have assembled an excellent team and look forward to collaborating with our brokers and insureds to provide stable, flexible solutions along with the quality service that is a hallmark of BHSI operations everywhere.”

Cameron comes to BHSI with two decades of industry experience. He was most recently Regional Financial Lines Manager at AIG Asia Pacific. Before that he was Regional Offices Manager at AIG UK Ltd; Australian Financial Lines Manager at AIG Australia; and Financial Lines Manager at AIG in New Zealand. He was also Casualty Manager at Gen Re in Auckland. He holds a Bachelor of Laws (LLB) degree from the University of Canterbury in Christchurch.

© 2015 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.

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Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Increases Asia Presence with Minority Stake in IAG

(BRK.A), (BRK.B)




On the heels of Berkshire Hathaway’s recent move into the Australian insurance market, the company has announced that it has purchased a minority stake Australian insurer Insurance Australia Group Limited (IAG).

Berkshire has agreed to pay A$500 million (US$387.8 million) for 3.7% of IAG.

In addition to the ownership stake, Berkshire will receive 20% of IAG’s premiums and in exchange will pay 20% of its claims over the next 10 years, a move that right off the bat will bring Berkshire $1.78 billion of premium annually.

“Our strategic partnership with IAG will help fast-track our entry into this region,” Warren Buffett said. “We have worked with IAG for more than 15 years and over that time we’ve developed a good understanding and respect for their people.”

IAG is the parent company of a general insurance group with operations in Australia, New Zealand, Thailand and Vietnam. The company employs more than 15,000 people.

IAG’s brands include NRMA Insurance, CGU, SGIO, SGIC, Swann, WFI and Lumley Insurance (Australia); NZI, State, AMI and Lumley Insurance (New Zealand); Safety and NZI (Thailand); and AAA Assurance (Vietnam). IAG also has interests in general insurance joint ventures in Malaysia, India and China.

Standard & Poor’s has assigned a ‘Very Strong’ Insurer Financial Strength Rating of ‘AA-’ to IAG’s core operating subsidiaries.

Berkshire Hathaway Specialty Insurance Company (BHSI) recently received its insurance license to provide all lines of General Business in Australia, and established operations in Sydney. Chris Colahan was named President of BHSI’s Australasia Region, and four executives from American International Group are also on board.

Non-Dilution Rights

Under a waiver granted by the Australian Securities Exchange, IAG has agreed to give non-dilution rights to Berkshire, granting the company the right to buy shares at the same price as other investors if there is an issuance of securities.

(This article has been updated with new information since it was published.)

© 2015 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.

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Berkshire Hathaway Reinsurance Group Berkshire Hathaway Specialty Insurance Warren Buffett

Warren Buffett Downplays Global Warming’s Impact on Insurers

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Despite nonstop alarm bells from the media about the future costs of global warming, Warren Buffett downplayed its impact on Berkshire Hathaway’s insurance units during his 5-hour question and answer period at the Berkshire Hathaway annual meeting on May 2, 2015.

It’s not that Buffett thinks that climate change isn’t real, it’s just that its long term impacts are not an immediate concern in the insurance business because prices reset annually, and can always be adjusted upward after a bad year.

“We set it one year at a time. I find nothing on a yearly basis that makes me change my prices,” Buffett noted.

No 50-Year Policies

“That doesn’t mean it isn’t a threat to humanity and isn’t terribly important,” he added. “If I was writing a 50-year windstorm policy in Florida…”

What is of more immediate impact to insurers is the quality of the policyholders. It’s something that insurance companies can’t ignore just to rack great sales figures.

“You insure “Marvin the Torch,” you are going to have a lot more risk than global warming,” Buffett explained. “That building’s going to go!”

© 2015 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.

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Acquisitions Berkshire Hathaway Reinsurance Group Berkshire Hathaway Specialty Insurance

Buffett Quells Talk of Big Insurance Takeovers

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As Berkshire continues to expand its insurance empire, including just last week adding a new Australasia Region to Berkshire Hathaway Specialty Insurance, rumors have swelled that the company might be ready to put some of its $30 billion in cash to work through a major insurance company acquisition.

At the Berkshire Hathaway annual meeting on May 2, Buffett dismissed such speculation. He noted that it is “almost certain that we will not take over a large commercial insurance company.”

A SIFI?

Berkshire’s continued growth in the insurance industry, which in addition to Berkshire Hathaway Specialty Insurance includes GEICO, National Indemnity, and Berkshire Hathaway Reinsurance Group, has brought questions as to whether Berkshire is now a Systematically Important Financial Institution (SIFI).

“There is no reason, in logic or in terms of what we’ve heard, to think that Berkshire would be designated as a SIFI,” Buffett noted. “I do not think Berkshire comes within miles of qualifying as a SIFI.”

While Berkshire Hathaway continues to build its own insurance companies, including bringing on board four former AIG executives for its new Australia-based unit, Buffett notes that insurance is only about 30-percent of Berkshire’s total business, with business units, such as BNSF Railway, being much larger.

The insurance and transportation units helped propel Berkshire’s 2015 first quarter earnings up almost 10% over first quarter 2014, with lower fuel costs for BNSF a particular factor.

© 2015 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.

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Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Adds Australia to Growing List of Countries

(BRK.A), (BRK.B)

Australia is the latest country for Berkshire Hathaway’s Boston-based Berkshire Hathaway Specialty Insurance Company (BHSI). The company received its insurance license to provide all lines of General Business in Australia, and established operations in Sydney.

Wasting no time, BHSI has already started providing property, casualty, financial lines and marine cargo insurance in Australia.

Chris Colahan was named President of BHSI’s Australasia Region, and four executives from American International Group are also on board.

“BHSI is committed to expanding into geographic markets and lines of business where we can provide financially strong, highly responsive underwriting solutions and market leading service. Our move into Australia reflects this strategy. Under Chris’s leadership, we’ve already built a stellar underwriting, claims, and functional team to serve the needs of the Australian market,” said Peter Eastwood, President of BHSI.

Chris Colahan joins BHSI from RSA Insurance Group, where he was most recently Chief Executive Officer, Asia, and before that, Chief Executive Officer, Hong Kong. He was also previously Country Manager, Singapore Retail, and Regional Manager, Strategy and Change, Asia and the Middle East, at RSA. He began his career in Australia at Westpac Banking Corporation.

In addition to its Australian platform, BHSI has established operations in the United States, Canada, Singapore and Hong Kong. The company is pursuing its insurance license in New Zealand.

© 2015 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.

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Acquisitions Berkadia Berkshire Hathaway Automotive Berkshire Hathaway Energy Berkshire Hathaway Specialty Insurance BH Media Lubrizol Marmon Group

2014 Berkshire Hathaway Acquisitions You Didn’t Hear About

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2014 was a busy year for Berkshire Hathaway, with over $5 billion in acquisitions both directly by Berkshire Hathaway and through its companies. I’m sure you heard about the purchase of Procter & Gamble’s Duracell battery division, but did you know that other acquisitions made Berkshire the leader in beverage dispensing, and got Berkshire into automobile retailing for the first time? Here is a list of some of the other lesser-known acquisitions. Did you miss any of them?

Marmon Retail & End User Technologies Acquires Cornelius, Inc.
Date: January 2014
What it is: Cornelius, Inc. is the world’s leading supplier of beverage dispensing and cooling equipment. They manufacture and market a broad line of beverage dispense solutions for soft drink, beer, ice, juice, tea, and frozen as well as a complete line of accessories.

Berkshire Hathaway Specialty Insurance Acquires MyAssist, Inc. from Noel Group
Date: January 2014
What it is: MyAssist is a technology-driven, cloud-based personal assistance solution that leverages advanced technologies to give customers a customized, personal experience. MyAssist provides Mercedes-Benz and Ford with live-agent personal-assistance and telematics service using “location-aware technology” from Verizon Communications Inc.

MiTek Acquires Ellis & Watts Global Industries
Date: April 2014
What it is: Ellis & Watts is the recognized leader in the engineering, design, and fabrication of highly customized HVAC and other products sold into the nuclear, military, and other industrial end markets.

EXSIF Worldwide, Inc. Buy’s OCS
Date: April 2014
What it is: OCS Limited is a tank rental and chemical supply company based in Aberdeen, United Kingdom. OCS operates in the offshore oil and gas sector, serving clients in the North Sea.

Berkshire Hathaway Acquires Van Tuyl Group
Date: April 2014
What it is: Van Tuyl Group is the nation’s largest privately-owned auto dealership group, which ranks fifth among all U.S. auto dealership groups.

Berkshire Hathaway Energy Acquires AltaLink
Date: May 2014
What it is: AltaLink owns 12,000 kilometers of transmission lines and 280 substations that bring electricity to 3 million customers in Alberta, Canada.

Berkadia Acquires Keystone Commercial Capital
Date: May 2014
What it is: Keystone Capital is a full-service commercial mortgage banking company headquartered in Phoenix that services more than $2 billion in commercial real estate loans.

BH Media Acquires Catamaran Group
Date: September 2014
What it is: Catamaran Group publishes 12 weekly papers, with circulations ranging from 7,000 up to 15,000, serving the southern New Jersey shore area. While the individual circulations are small, the combined circulations exceed 111,000.

Lubrizol Acquires Warwick Chemicals
Date: November 2014
What it is: Warwick Chemicals is a leading global developer, producer and supplier of stain removal technology with hygiene benefits. Headquartered in Mostyn, North Wales, Warwick Chemicals has strong positions with global and regional detergent producers. Their products are an essential element in laundry detergent powders and automatic dishwashing products used across five continents and in more than 50 countries.

Lubrizol Acquires Engineered Chemistry and Integrity Industries
Date: December 2014
What it is: Engineered Chemistry supplies additives and fluids for a range of oilfield activities, including cementing, drilling, flow assurance and fracturing. It offers chemistry expertise to solve problems throughout the oil and gas drilling process. The business consists of a core manufacturing and research organization which supports a global field distribution network. Engineered Chemistry was built through a series of acquisitions over the past 12 years and is headquartered in Houston, TX. It operates 10 sites located predominantly in North America. Integrity Industries manufactures drilling fluid systems, including diesel, mineral oil and synthetic oil based fluids. The company supplies these drilling fluid systems to retail drilling fluid companies along with technical support.

Berkshire Hathaway Acquires Charter Brokerage
Date: December 2014
What it is: Charter Brokerage is a leading global trade services company providing complete customs, import, export, drawback and related services.

There you have it!

Bolt-On Acquisitions Continue to Power Berkshire’s Growth

© 2015 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.

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Berkshire Hathaway Specialty Insurance

Berkshire’s AirCare Travel Insurance is Money in the Bank

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Missed your connecting flight? Sitting on the tarmac unable to take off? Berkshire Hathaway has made a big bet that you’re your travel delays, delayed and lost luggage, and missed connections are money in the bank—yours and theirs.

This past January Berkshire Hathaway Specialty Insurance acquired the assets of the Noel Group’s MyAssist and Insure America in order to move into an area of travel insurance that is different than traditional trip cancellation policies. This insurance focusses on the little inconveniences that bedevil air travel.

Money in the Bank

The innovative AirCare Travel Insurance product is sold for only $25 a domestic flight, and its key feature is real-time monitoring of your flight status and direct deposits into your bank account.

Berkshire Hathaway Specialty Insurance promises that their AirCare Travel Insurance will “start rebooking a missed connection automatically. Help replace lost luggage quickly. Even save you a seat in the VIP Lounge.”

All that sounds nice, but it’s the money in the bank that is the big hook. No paperwork, no submitting receipts or claim forms, the real-time monitoring means that while you are working on rebooking your flight a deposit of $50 is hitting your bank account if the departing or connecting flight takes place two or more hours after the originally scheduled flight. The money only goes up from there. You receive $500 for flight delay that causes a missed connection, and $1,000 if you sit on the tarmac for more than two hours.

Lost and delayed baggage pay-outs include $500 for misplaced luggage that is delayed by more than 12 hours, and $1,000 for bags that are lost or stolen.

In addition to direct EFT deposits, travelers can get the more traditional check in the mail, and another innovation enables travelers to get their funds deposited into their PayPal account in lieu of a bank account.

Weather or Not to Buy Insurance

The convenience of AirCare Travel Insurance is that it can be purchased through a mobile app and charged to a credit card even as you sit in the airport. Purchase rules only require that it only be an hour or more before your scheduled departure and that there not be an active weather warning in effect. This means that as long as the airport is open you can place your bet on your flight being delayed.

Ramping Up Big Time

The new Berkshire Hathaway Travel Protection unit is headed by Noel Group’s John Noel, the man who became a leader in modern travel insurance when in 1985 he launched Travel Guard insurance from his basement home office.

Currently the company has 150 employees at its headquarters in Stevens Point, Wisconsin, and they are looking to hire 2,000 employees in anticipation of strong demand for the new insurance product.

How big is the Market?

The market is huge. John Noel points to the 660 million domestic air travel segments a year, and the 30-percent of all travelers that currently purchase a travel insurance policy, as an indicator of the potential market. That market will even grow larger as an anticipated expansion covering international travel is added on. It’s a total market that currently has no competition, is not covered by travel riders provided by homeowner’s or auto policies, and even if others enter it Berkshire Hathaway Specialty Insurance has positioned itself to be the market leader.

Sounds like money in the bank.

© 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.