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Berkshire Hathaway Reinsurance Group Charlie Munger Insurance Minority Stock Positions Stock Portfolio

Berkshire Cuts Munich Re Stake, Again

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Berkshire Hathaway continues to see the reinsurance business as a low return business and is pulling back from the sector in its own underwriting and in its ownership stake in other underwriters.

Berkshire has again cut its stake in Munich, Germany-based reinsurer Munich Re, this time from 9.7 percent to 4.6 percent. It previously cut its stake from 12 percent to just over 9 percent earlier in 2015.

Berkshire’s own reinsurance business has been less than stellar this year with Berkshire reporting$155 million in losses from storm damage on Australia’s east coast in the 2nd quarter of 2015.

Charlie Says

“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.”

Uncorrelated (also called non-correlated) asset classes are assets that move in the opposite direction of a particular asset class, thus helping investors reduce risk in exchange for lower upside performance.

Munger’s words were echoed by Ajit Jain, who is the head of Berkshire Hathaway Reinsurance. “What was a very lucrative business is no longer a very lucrative business going forward” Jain was quoted in The Wall Street Journal.

© 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 Specialty Insurance Enters Surety Market in Asia

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Berkshire Hathaway Specialty Insurance Company (BHSI) is entering the surety market in Asia, and has appointed Andrew Ho as Vice President, Head of Surety, Asia. Ho will be based out of BHSI’s Singapore office.

“Our expansion into surety is indicative of our strategy to commit where our deep expertise and top-rated financial strength will create value for our customers,” said Marc Breuil, President of Asia, BHSI. “We are pleased to have Andrew leading our newest business segment, providing quality surety underwriting and responsive local service.”

BHSI is initially focusing its surety efforts in Asia on civil contractors, general builders, engineering firms, equipment manufacturers and suppliers, and fabrication firms.

“A strong surety offering is a welcome addition to the marketplace and rounds out our broad range of coverages for construction and commercial customers in Asia,” said Marcus Portbury, Senior Vice President and Regional Head of Third Party Lines, Asia, BHSI. “We look forward to working with Andrew and our BHSI colleagues worldwide to provide local and global surety solutions, tailored to individual needs.”

Andrew joins BHSI from Standard Chartered Bank where he was Director, Trade Programmes & Credit Insurance. Prior to that, Andrew worked for more than 17 years in surety and trade credit roles at QBE, including Regional Underwriting Manager – Credit & Surety, Client Accounts

© 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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GEICO Insurance

GEICO Debuts Electronic ID Cards

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GEICO, New York’s largest auto insurer, is providing New York drivers with electronic proof of insurance on their smartphones and other electronic devices. The GEICO digital ID cards are featured through the GEICO Mobile App.

GEICO is the first insurer in the state to do so.

Earlier this year, New York’s DMV amended its regulation dealing with insurance identification cards so that now New York motorists are able to provide proof of auto liability coverage with electronic ID cards.

Since then, the state set up certification testing for insurers who want to provide the digital service.

GEICO is the first company to complete the certification process with the New York DMV in order to satisfy the state’s regulatory requirements.

“We are happy to have worked with the N.Y. DMV and others to be able to offer this added convenience to consumers in New York,” said John Pham, vice president of GEICO’s New York operations. “Electronic ID cards are another example of how we make things easier for our customers. Less paper means less hassle, and also helps the environment.”

Use of Apps Goes Back Six Years

The GEICO app first appeared in 2009 to offer policyholders with immediate access to their current insurance information. It has added features regularly since then and now customers can complete their insurance needs on their smartphones. You can make changes in coverage, report and track claims, get roadside assistance and chat directly with GEICO on the mobile app.

The latest national study on insurance mobile apps ranked the GEICO app number one in the industry for its overall functionality to meet customer needs, and Forrester Research dubbed it one of “the pocket auto insurers” in its 2015 US Mobile Auto Insurance Functionality Benchmark, released by Forrester Research Inc. on Oct. 19, 2015.

© 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 Travel Protection Jumps into Vacation Rental Insurance

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Just because you are on vacation doesn’t mean you don’t need insurance coverage according to Berkshire Hathaway’.

Berkshire Hathaway Travel Protection (BHTP) is teaming up with VacationGuard, one of the top providers of vacation rental insurance, to create customized travel insurance products for timeshares, travel clubs, resorts and vacationers.

The travel insurance products help protect property owners and vacation renters from trip cancellation, delays, injuries and accidental damage to rental units.

VacationGuard products have been approved in 45 jurisdictions, with filings pending in Massachusetts, New York, Virginia, Colorado, Oregon and Washington.

VacationGuard was one of the pioneers of developing benefits and plan designs for vacation rental insurance more than 20 years ago. The ability to align with BHTP allows VacationGuard to offer new technologies and innovative products backed by the security of one of the biggest brands in travel insurance.

“We’ve always sought a vertically integrated carrier with world-class services, and BHTP has proven themselves to be leaders in embracing innovation, technology, and a culture that will protect the brand-sensitive companies we work with,” said Brian Rock, Vice President of VacationGuard. “We are very excited for the long-term stability and innovations this will bring to our program. This further illustrates we will deliver peace-of-mind to our plan holders and business clients.”

About Berkshire Hathaway Travel Protection

In January 2014, 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.

The company launched its innovative AirCare Travel Insurance product, which 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.

© 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 Insurance National indemnity

Berkshire to Acquire Insurance Assets

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Berkshire Hathaway’s insurance unit, Tenecom Ltd, a subsidiary of National Indemnity, will acquire the non-life insurance assets of UK insurer Charles Taylor PLC.

Charles Taylor has begun disposing of its non-life insurance assets in order to concentrate on its life insurance business, and Tenecom Ltd will acquire the business assets of both Cardrow Insurance and Beech Hill Insurance.

financial details have been released other than that Charles Taylor will receive a final dividend from Cardrow and Beech Hill when the units are liquidated.

London-based Tenecom was originally known as Yasuda Fire And Marine Insurance of Europe, before changing its name in 2001.

© 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 Specialty Insurance Offers Professional Liability and Network Security & Privacy Policies in the U.S.

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Information technology security is constantly in the news, so it’s a natural area for increased insurance coverage as consumers and businesses look to protect themselves from the damaging consequences of getting hacked. As Target Stores and other retailers have discovered, cyber fraud can bring liability for third party exposures to data security and privacy breaches.

Berkshire Hathaway Specialty Insurance (BHSI) is now offering two new policies providing cyber liability and breach response coverage with risk management resources, the Professional First™ Network Security & Privacy Policy and the Professional First™ Professional Liability and Network Security & Privacy Policy. The latter also includes customizable errors and omissions (E&O) liability coverage.

“Our experienced professional liability team is providing solutions to simplify for customers the complex work of managing professional liability and cyber exposures,” said Danielle Librizzi, Senior Vice President, Head of Professional Liability. “We are pleased to bring to market comprehensive, flexible coverage, backed by BHSI’s commitment to service and financial strength.”

The Professional First™ Professional Liability and Network Security & Privacy Policy provides E&O coverage for technology and specified miscellaneous services. Both policies include multi-faceted network security and privacy liability insurance and risk management resources, which can be tailored for professional services firms of all types, from technology enterprises, to financial institutions, to law firms.

Highlights for both policies include:

• Coverage for third party exposures resulting from data security and privacy breaches, including regulatory investigations, fines and penalties.
• Breach expense and extortion threat coverage, addressing the wide range of direct expenses an Insured incurs to effectively respond to a breach or extortion threat.
• Media liability coverage, which responds to traditional media exposures (e.g. through a company’s website) arising from electronic content.
• Business interruption coverage to pay lost income and related expenses incurred as a result of the Insured’s business’ partial or full interruption due to a network security failure.
• Online access to eRiskHub®, which provides state-of-the-market tools and resources to help policyholders understand cyber exposures, establish a breach response plan, and prepare to mitigate the impact of a breach on their organization. eRiskHub is provided via NetDiligence, a leading cyber security and e-risk assessment firm.

About Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, and homeowners insurance. It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has offices in Atlanta, Boston, Chicago, Fort Lauderdale, Houston, Los Angeles, New York, San Francisco, San Ramon, Stevens Point, Hong Kong, Melbourne, Singapore, Sydney and Toronto.

© 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 Insurance Minority Stock Positions

Berkshire Slashes Stake in Munich Re

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For the past four months, Berkshire Hathaway’s leadership has been expressing its displeasure with the state of the reinsurance market. Now, reinsurer Munich Re has reported that Berkshire has cut its stake in the company from roughly 12% down to 9%.

“It’s a business whose prospects have turned for the worse and there’s not much we can do about it,” Warren Buffett said at the 2015 Berkshire Hathaway annual meeting.

“The reinsurance business not as good as it once was and is unlikely to get better,” Charlie Munger added. “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.”

Buffett’s and Munger’s words were in line with those of Ajit Jain, who is the head of Berkshire Hathaway Reinsurance.

“What was a very lucrative business is no longer a very lucrative business going forward,” Jain said in July in The Wall Street Journal.

Berkshire originally disclosed a stake in Munich Re in January 2010, when it reported a 3.045% stake in the German reinsurer.

© 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 Specialty Insurance Adds Inland Marine Insurance Products to U.S. Offerings

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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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GEICO Insurance

GEICO Offers its Ridersharing Coverage in Two More States

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GEICO is continuing to expand the availability of its ridesharing insurance coverage, which provides insurance coverage to drivers for ridesharing services such as Uber, Lyft, Sidecar, and Carma. The two newest states for GEICO’s coverage are Connecticut and Ohio.

“Being close to New York City makes Connecticut a key market for rideshare drivers,” said Rick Hoagland, GEICO regional vice president.

New and existing drivers that have been approved to drive for Uber (UberX and UberXL), Lyft, Sidecar and other services in Ohio can also now get the insurance coverage through GEICO.

“Ohio has seen substantial growth in its rideshare market, and GEICO wants to make sure these drivers are properly insured,” said Don Robinson, GEICO regional vice president. “Our product eliminates coverage gaps for rideshare drivers and delivers a complete insurance solution at an affordable price along with GEICO’s outstanding customer service.”

“Because they use the same vehicle for personal use and to provide rides for a fee, rideshare drivers have unique insurance needs that go well beyond a traditional auto insurance policy,” said Othello Powell, director of GEICO commercial lines. “Our policyholders appreciate comprehensive coverage and peace of mind, which our new product can give them.”

Real-time ridesharing that uses an automated system to match drivers and riders has in a few short years moved from a fringe mode of transportation to a powerful alternative that has taxi and car services up in arms. Along the way, it has required new forms of liability coverage that are different than those offered to both personal and commercial drives.

GEICO first entered the market in February in Virginia, and has been selling a ridesharing product in Georgia, Virginia, Maryland, Pennsylvania, and Texas.

Replaces the Personal Auto Policy

GEICO’s ridesharing product replaces the driver’s personal auto policy and provides coverage both for personal and ridesharing use.

The coverage is billed as a Hybrid Policy that regardless of whether the driver is driving for personal needs, or is picking up a paid rider, provides coverage for liability, property damage, bodily injury, first party coverage, collision coverage, comprehensive physical damage coverage, and medical payments.

GEICO says it will offer the coverage through GEICO Commercial at a price significantly lower than taxi and commercial rates.

© 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

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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.