Berkshire Hathaway invests in IAG, gets quota share reinsurance deal
Wednesday, 06 17 2015, Category: Insurance and Reinsurance, Country: World
Warren Buffett’s Berkshire Hathaway has signaled its appetite for Australian and Asian expansion with the signing of a 10 year partnership deal with Australian insurer IAG, involving an equity stake and a 20% quota share reinsurance arrangement.
Under the terms of the deal Berkshire Hathaway will make a $500m equity investment in Australian primary insurer IAG, amounting to approximately 3.7% of its expanded capital.
At the same time the arrangement includes a 10 year quota share reinsurance arrangement, which will see Berkshire Hathaway receive 20% of IAG’s consolidated gross written premiums across its consolidated insurance business, while paying 20% of its claims.