Category: Insurance

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Insurance

Drone Insurance Anyone?

(BRK.A), (BRK.B)

Want to deliver pizzas by drone? Well, don’t discount the risk when grandma gets hit by a flying pizza. The new world of unmanned drones has brought with it a whole new world of liability, and for Berkshire Hathaway, liability coverage.

Berkshire’s General Star Management Company is now offering CGL coverage specifically designed to protect the manufacturers, distributors and operators of unmanned aircraft systems (UAS), more commonly known as “drones.” In addition, contingent coverage for unmanned aircraft systems operations conducted on behalf of the insured is available.

Protection afforded by the Casualty Division is targeted to manufacturers, distributors and operators of hobby and commercial unmanned aircraft weighing up to 55 lbs.

Operators must operate the devices within applicable FAA regulations and guidelines. “Start-up” as well as established entities are eligible for the new offering.

General Star will entertain UAS operators including but not limited to:

• Use of unmanned aircraft for research, governmental or commercial purposes
• Real estate surveyors using unmanned aircraft for aerial surveying
• Professional photographers using unmanned aircraft for commercial purposes

Primary limits of $1M/$2M/$2M/$1M are available for manufacturers, distributors and operators. Excess limits of $2M in addition to the Primary limits are also offered. Contingent liability coverage for UAS operations conducted on behalf of the insured offers primary limits of up to $2M/$4M/$4M/$2M and $10M excess of underlying primary limits.

Coverage for aircraft collision and for privacy violations arising out of UAS operation is included for manufacturers, distributors and operators. Written on an occurrence basis, the new protection contains no or nominal deductibles.

“We are pleased to provide our wholesale clients with a policy designed to address the unique hazards and exposures associated with one of today’s top emerging trends – drones,” said Liana Tufariello, Underwriter and Project Leader for General Star. “The popularity and usage of drones for commercial purposes has exploded, and this is just the type of E&S products liability opportunity we are eager to tackle.”

Cole Palmer, Vice President and Casualty Division Manager, added, “Responding to emerging trends, and creating new offerings for our wholesale clients to sell, are examples of how we help our clients grow their business. Innovative offerings on new technology devices, or taking a second look for creative alternatives on traditional exposures, will contribute to the growth goals of both our clients and General Star. Being a ”good steward” of an existing book is no longer a sustainable model in today’s competitive environment.”

© 2016 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 Insurance

Berkshire Hathaway Turns Away From Reinsurance Business

(BRK.A), (BRK.B)

Berkshire Hathaway’s long term love affair with the reinsurance continues to wane. Over the past few years, Warren Buffett, Charlie Munger and Ajit Jain all have spoken about the changes in profitability in the reinsurance market.

The latest proof comes as Berkshire Hathaway has dropped to sixth in A.M. Best’s annual special report on the global reinsurance industry.

“The reinsurance business not as good as it once was and is unlikely to get better,” Charlie Munger said at the 2015 Berkshire Hathaway annual meeting. “Money has come in, not because they want to be in reinsurance, but because it’s an uncorrelated asset class. We’re in it for the long haul.”

“What we’ve seen from Berkshire Hathaway is that they recognize that reinsurance opportunities are not where they need to be from a pricing perspective,” A.M. Best Vice President Robert DeRose said. “They have pulled capacity back from that particular aspect of the market and they are building out insurance strategies.”

DeRose stated that Berkshire Hathaway is specifically building out that capacity through Berkshire Hathaway Specialty Insurance Co. Also, Berkshire Hathaway, through its General Reinsurance Corp. franchise, has entered into a five-year agreement under which Transatlantic Reinsurance Co. will serve as its exclusive underwriter for U.S. and Canadian property/casualty treaty reinsurance business.

© 2016 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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GEICO Insurance

GEICO Ridesharing Coverage Now in Half of the U.S.

(BRK.A), (BRK.B)

Building on successful launches all across the country, GEICO now offers its low-cost ridesharing product in 24 states. The product delivers comprehensive coverage to serve Uber, Lyft, Split and other on-demand service drivers.

The list of states include: Colorado, Illinois, Iowa, Indiana, Louisiana, Mississippi, Nebraska, New Mexico, Oklahoma, Oregon, South Dakota, Arizona, Iowa, Vermont, Wyoming, South Carolina, Georgia, Virginia, Maryland, District of Columbia, Texas, Connecticut, Pennsylvania and Ohio.

Bridging the coverage gap, GEICO’s ridesharing product combines coverage options into a single policy that protects drivers during both ridesharing and personal use when the rideshare app is on or off, with or without passengers in the vehicle. The policy addresses the needs of on-demand service drivers and eliminates the cost and confusion of having two separate policies.

“Since its first introduction to the market last year, GEICO’s ridesharing insurance solution has consistently received positive feedback from policyholders on its affordable pricing and hassle-free service,” said Othello Powell, director of commercial lines. “As we continue to monitor the unique needs of ridesharing drivers, we’re even more determined to grow our ridesharing product to serve many more drivers in many more states.”

Powell noted that many policies may limit coverage options to one specific transportation network company and may only cover a portion of the trip.

“With GEICO’s ridesharing insurance, drivers are covered regardless if they are logged into the transportation network company’s app. They also have the flexibility to work with multiple companies.”

GEICO’s ridesharing product is offered through the company’s Commercial division at a price similar to personal auto insurance.

© 2016 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 Specialty Insurance Teams with Tego to Offer Medical Indemnity Insurance in Australia

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance Company (BHSI) and Tego Insurance have entered into an exclusive underwriting agreement to provide medical indemnity insurance to medical practitioners in Australia.

“We are delighted to work with Tego to bring BHSI’s medical indemnity experience and unrivalled financial backing to the Australian market,” said Tony Bainbridge, Head of Healthcare, Australia, BHSI. “Our combined offering will bring additional choice, flexibility and financial security to Australian doctors.”

“The word Tego originates from Latin, meaning to defend and protect, and that is exactly what we focus on,” said Eric Lowenstein, Chief Executive Officer of Tego. “With a focus on superior customer service and industry-leading products – value is always top of mind.”

With BHSI’s entry into the Australian marketplace, doctors have a new choice in medical indemnity insurance, supported by a technically strong underwriting and claims handling team.

“Claims and complaints can be very stressful for practitioners. We are committed to excellence in claims handling, technical expertise and efficiency,” said Nicole Kroesche, Head of Healthcare Claims, BHSI. “Working closely with the practitioner and supporting them through a claim allows them to get back to focusing on providing quality patient care and worrying less about the claim itself.”

The introduction of innovative products to address the changes in the medical practice, and also the technology trends affecting the medical practitioner, is the goal of Tego and BHSI. As part of its underwriting process, BHSI reviews the individual characteristics of each medical practice since all practices in a particular medical specialty may not automatically pose the same level of risk. This tailored pricing approach may result in significant savings for individual practices.

© 2016 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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Insurance

Berkshire Hathaway Travel Protection Teams Up With TripInsuranceZone

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Berkshire Hathaway Travel Protection (BHTP) has teamed up with TripInsuranceZone to bring BHTP’s suite of travel insurance products to the online travel insurance comparison website TripInsuranceZone.com.

Products to be offered through the website include BHTP’s ExactCare™, which provides travelers with comprehensive travel and medical benefits that feature Primary Emergency Medical coverage (including pre-existing conditions when purchased within 15-days of the initial trip deposit).

ExactCare also offers Trip Cancellation and Interruption, Medical Evacuation and Repatriation, AD&D, and Loss and Delay benefits.

“We are thrilled the customers of TripInsuranceZone.com can now access BHTP products and standout service,” said Dean Sivley, President of Berkshire Hathaway Travel Protection.

Using TripInsuranceZone’s unique comparison engine, travelers can research, quote, compare and purchase travel insurance from most major travel insurance providers in the United States.

“BHTP is bringing a unique set of travel insurance options to our customers. AirCare takes away inconveniences customers could experience when unexpected events occur during their flights, and ExactCare provides traditional comprehensive coverage with a quick and easy claims and payment process. We are very excited to have both set of products available on the TripInsuranceZone.com,” said Mariya Frayman, President of TripInsuranceZone.

Along with coverage, BHTP provides travelers with access to advanced mobile and claims technology that allows BHTP to process and pay a traveler’s claim within seconds once it has been reviewed and approved. Travelers simply upload all necessary documentation to start a claim, and then set-up their preferred method of electronic payment in their profile. This process can be done online at BHTP.com or by downloading their mobile application available for Android and iOS devices.

“Waiting weeks, or even days, for travelers to receive payments for travel emergencies and mishaps is a thing of the past. We’ve developed our claims processing to pay travelers quickly, so they can access those funds while they are still on their trip,” Dean said.

© 2016 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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GEICO Insurance

GEICO Expansion in Western New York State to Bring 600 Jobs

(BRK.A), (BRK.B)

New York governor Andrew M. Cuomo and GEICO Chairman and CEO Tony Nicely have jointly announced that insurer GEICO plans to expand it regional operations office in Western New York with an additional facility at 150 Crosspoint Parkway, Getzville, New York.

With this expansion, GEICO expects to add more than 600 new jobs in Western New York over the next six years. The company will also invest nearly $11 million to fit out and equip its current and additional offices to accommodate the new jobs.

“GEICO is immensely delighted to bring new career opportunities to the Greater Buffalo area,” said Tony Nicely. “We consider our associates to be one of our greatest assets. That’s why it’s important for us to continue to seek out and add highly talented individuals to our GEICO family.”

According to GEICO, the expansion brings new opportunities for careers in sales, customer service and claims service.

“It’s certainly an exciting time for GEICO and the Western New York area,” said Pionne Corbin, regional vice president. “We look forward to continuing to grow and better serve our associates, policyholders, and the local community.”

GEICO (Government Employees Insurance Company) is owned by Berkshire Hathaway, and is the second-largest private passenger auto insurance company in the United States. The company provided coverage for more than 14 million private passenger customers, insuring more than 23 million vehicles (auto & cycle).

© 2016 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 Insurance Warren Buffett

Warren Buffett’s Greatest Insurance Investment

(BRK.A), (BRK.B)

What was Warren Buffett’s greatest insurance investment? Was it the purchase of GEICO? How about National Indemnity?

According to Buffett, it was none of those. It was the hiring of Ajit Jain.

In an interview with Best’s Review, Warren Buffett says he made one of his best investments when he chose Ajit Jain to run his reinsurance business nearly 30 years ago. Jain, who is considered one of the front-runners to succeed Buffett as the head of Berkshire Hathaway, is one of the insurance leaders profiled in the July issue.

Jain was hired by Buffett in 1986, and at the time he was 35-years-old and had little experience in the reinsurance business.

Today, Jain is one of Buffett’s most trusted managers, having built Berkshire Hathaway Reinsurance Group into a reinsurance insurance powerhouse with $44 billion in float.

In April, he was given additional duties overseeing Gen Re after CEO Tad Montross retired.

Sounds like a good investment indeed.

© 2016 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 Expands Directors and Officers Insurance Coverage in Asia Markets

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance Company (BHSI) is expanding its Executive & Professional Lines capabilities with the introduction of Executive First Public Offering of Securities Insurance (POSI) and Executive First Side A Difference In Conditions (DIC) Liability Insurance in Asia.

“We are pleased to put BHSI’s financial strength to work to give directors and officers the utmost security as they assume directorships and embark on public offerings in uncertain times,” said Patrick Ko, Head of Directors and Officers, BHSI in Hong Kong. “With our POSI, companies and directors and officers can be confident that they are well protected against liabilities associated with capital raising transactions and public security offerings.
In addition, our Excess Side A DIC coverage provides additional peace of mind for individual directors and officers who can find their personal assets at risk due to their respective board positions.”

“BHSI can provide the large-scale capacity these exposures often demand – up to USD $100 million,” said Emily Poh, Head of Executive & Professional Lines, BHSI in Singapore. “In addition, directors and officers can rest assured that their policies reside with an insurer that has both the financial strength and the long-term commitment to see them through any claims ahead.”

BHSI’s new POSI provides coverage for the company (including companies listed on U.S. exchanges), its directors and officers, controlling and selling shareholders, and offering underwriters in litigation arising from a capital raising event, such as an Initial Public Offering (IPO).

BHSI’s Excess Side A DIC coverage is designed for individual directors and officers, including those serving on the boards of U.S. listed public companies. If the company cannot indemnify individuals, the coverage is intended to apply when their underlying D&O Liability Insurance policy cannot respond because its limits have been exhausted or a DIC event occurs.

© 2016 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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Insurance National indemnity

Berkshire Acquires Medical Liability Mutual Insurance Company

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If there is one thing Warren Buffett likes more than anything else it’s probably insurance float, and Berkshire Hathaway just acquired billions more of it.

Berkshire has announced that Medical Liability Mutual Insurance Company (“MLMIC”), the largest underwriter of medical professional liability insurance in New York, has entered into a definitive agreement, pending regulatory and policyholder approval, to be acquired by Berkshire’s National Indemnity Company, following the completion of the conversion of MLMIC to a stock company from a mutual company.

National Indemnity Company is a subsidiary of Berkshire Hathaway Inc., one of the world’s leading insurance organizations.

The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions and regulatory approvals.

“Good things are worth waiting for,” said Berkshire Hathaway CEO Warren Buffett. “MLMIC is a gem of a company that has protected New York’s physicians, mid-level providers, hospitals and dentists like no other for over 40 years. We welcome the chance to add them to the Berkshire Hathaway family and enhance their capacity to serve these and other policyholders for many years to come.”

“We are delighted to partner with such a fine organization. MLMIC has always had strong standing and stability within the challenging New York insurance market, and the arrangement with Berkshire Hathaway will bring policyholders further peace of mind, knowing MLMIC will be able to offer an even higher level of financial security. In addition, MLMIC will be able to expand its offerings, with more customized policy limits, risk-sharing features and services to groups, facilities and other large accounts,” said MLMIC President Robert Menotti, MD.

In a letter to policyholders, Menotti said, “Berkshire Hathaway values our operations, board, staff and endorsed partners. Most importantly, Berkshire Hathaway is committed to MLMIC’s future success and its ongoing dedication to serving policyholders.”

More Float for Berkshire

As of Dec. 31, 2015, MLMIC had a policyholder surplus of $1.8 billion giving Berkshire more of the insurance float that has played a key part in the conglomerate’s growth.

© 2016 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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Insurance

Gen Re Acquires Mortality Assessment Technology and Synthesis Analysis Patent License

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Gen Re, the Berkshire Hathaway-owned global life/health reinsurer, has acquired from BioSignia the Mortality Assessment Technology (MAT) and an exclusive worldwide license for “Synthesis Analysis,” a patented statistical methodology to build prediction models. By obtaining this cutting-edge technology, Gen Re seeks to deliver highly competitive reinsurance programs for the life and health insurance markets.

MAT has been available to the individual life insurance market since 2011 and has been used by carriers to support their underwriting processes. Within the reinsurance market these technologies will be first of their kind offerings.

Gen Re’s Vice President, Chief of Decision Analytics, Guizhou Hu, M.D., Ph.D., developed MAT and was the inventor of “Synthesis Analysis” in his prior role at BioSignia. He forecasts exciting possibilities for using these proprietary tools in the life and health insurance markets. “Using the unique statistical approach – Synthesis Analysis – MAT serves to better differentiate an individual’s mortality and more confidently classify the customer’s risk profile,” says Hu.

“Our aim is to improve the profitability of our client’s business,” says Gen Re’s James Greenwood, Senior Vice President, Individual Products. “Gen Re has been long respected in the industry for our innovations in underwriting substandard and elderly risks and recently has focused much of our decision analytics work in developing our new facultative programs – PURFac and Second Look. MAT will further improve our offerings and help our customers become more competitive in the market through increased placement rates.”

© 2016 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.