Higher than expected claims from AIG impacted a reinsurance deal with Warren Buffett’s Berkshire Hathaway
Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett (pictured), revealed a charge for higher than expected claims under a reinsurance contract with AIG.
The $1.8bn (£1.3bn) increase in estimated claim liabilities to $18.2bn in the fourth quarter of last year was disclosed in Berkshire Hathaway’s annual report, published on Saturday.
It said the increase was based on higher than expected payments reported by AIG.
Under the contract, Berkshire’s National Indemnity Co took on some of AIG’s risks, in exchange for a $10.2bn upfront payment. The contract covered 80% of AIG’s losses over $25bn, with a maximum liability of $20bn.