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Berkshire Hathaway Specialty Insurance Insurance

Berkshire Hathaway Specialty Insurance Enters Surety Market in Asia

(BRK.A), (BRK.B)

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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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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Berkshire Hathaway Specialty Insurance

BHSI Offers Directors & Officers Liability Insurance to Asia

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance Company (BHSI) has begun selling Executive First™ Directors & Officers (D&O) Liability and Professional First™ Professional Indemnity Insurance policies in Asia.

Designed for commercial and financial firms, Executive First D&O Liability Insurance provides coverage for companies, directors, officers and executives facing securities litigation and regulatory investigations. Additional Side A protection is available for individual directors and officers.

Professional First Professional Indemnity Insurance provides professional services firms with comprehensive protection. The policy also has options to extend coverage to independent contractors and consultants and to automatically reinstate exhausted limits.

“With the launch of these two primary policies, we look forward to bringing BHSI’s exceptional local executive and professional lines expertise and customer-centric underwriting across Asia,” said Marc Breuil, President of Asia, BHSI. “Our customers and brokers can look forward to new products coming soon — all backed by BHSI’s financial strength.”

© 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.

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Acquisitions Insurance

Berkshire Completes PLICO Acquisition

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Berkshire Hathaway’s MedPro Group (MedPro) has announced the completion of its acquisition of Oklahoma City-based PLICO, which serves approximately 2,200 healthcare providers in Oklahoma, and is the largest healthcare liability insurer in Oklahoma.

The company notes that the transaction process – from signing to closing – took less than 60 days, and that the PLICO and MedPro teams have already begun working cohesively to serve Oklahoma healthcare providers.

PLICO’s principal operations will remain in Oklahoma City. Carl Hook, M.D., will remain as CEO while also serving as Chair of PLICO’s Advisory Board, and long-time PLICO executive Sherry Hayworth will serve as President.

Founded in 1979, PLICO is the largest healthcare liability insurer in Oklahoma, and has annualized gross written premiums of about $30 million, and had a statutory surplus of over $60 million at year-end of 2014.

The “bolt-on” acquisition is only the second acquisition for MedPro since Berkshire Hathaway acquired it a decade ago.

PLICO is not currently rated by leading insurance rater, A.M. Best, but is expected to apply for financial strength ratings and be positioned to offer additional products and services.

Prior to the PLICO acquisition, Berkshire’s MedPro had $874 million in annual premiums and more than 140,000 customers.

© 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

Berkshire Rises in Reinsurance Ranks Even as Business Softens

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Berkshire has jumped ahead of SCOR SE into fourth place among the top 50 insurers in A. M. Best’s Global Reinsurance Segment Review.

Ahead of Berkshire are Munich Reinsurance Company, Swiss Re Ltd., and Hannover Rueckversicherung AG, in that order.

Lloyd’s of London’s international casualty reinsurance market dropped from fourth place to sixth. The rankings are based on premiums written in 2014.

Berkshire’s gross written premiums rose from $12.776 billion in 2013 to $14.919 billion in 2014.

Profits Harder to Come By

Through its Berkshire Hathaway Reinsurance Group, Berkshire provides reinsurance to Suncorp and Insurance Australia Group, and in the 2nd quarter of 2015 reported $155 million in losses from April and May storm damage on Australia’s east coast.

Buffett, Munger and Jain Cool on Reinsurance

Storms or no storms, Berkshire is not generating the profits it used to from reinsurance.

“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.”

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

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.

Buffett’s and 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 early July in The Wall Street Journal.

Remaining Disciplined

Traditionally Berkshire has been a disciplined underwriter. Warren Buffett has always stressed that it is better to write fewer premiums in a given year than to give in to chasing short-term revenues that lead to long-term losses.

A recent survey of the Lloyd’s Market Association’s reinsurers found that 95% of survey respondents indicated a relaxation of reinsurance contract terms and conditions in the international casualty market. Additionally, 39% felt the loosening of contract terms was having a material impact on the amount of underwriter’s exposure.

Hopefully, Berkshire will remain disciplined and not fall into that trap.

© 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.