With a $7 billion deal in the works to take over Lloyd's Equitas operation, Berkshire Hathaway is gambling that the move will be profitable in the long term because of its expertise with asbestos claims, according to a brokerage expert. The move, which analysts greeted positively, will see Equitas–Lloyd's runoff operation for asbestos and other long-term exposures–buying $7 billion in reinsurance from the Berkshire subsidiary National Indemnity Company, which will run its operations.
Besides providing the reinsurance for all Equitas' liabilities, National Indemnity will take on the staff and operations of Equitas and conduct the runoff of Equitas' liabilities.
Paul Little, executive vice president and chief brokerage officer of Holborn Corporation, a reinsurance brokerage, said Berkshire has substantial background in the area of asbestos claims. In 2001 it purchased Johns Manville, a major manufacturer of asbestos products before asbestos injury claims soared out of control.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
