$1.6bn of asbestos claims taken over for $2bn fee
Warren Buffett's Berkshire Hathaway will take over asbestos and environmental pollution risks held by CNA Financial in exchange for a $2bn fee, Reuters reports.
Berkshire's National Indemnity will take over $1.6bn of net liabilities retroactive to 1 January and handle claims, CNA said. The accord has a $4bn limit and gives National Indemnity the right to collect $200m of receivables.
Buffett "understands insurance risks well, and can use the 'float' from the $2bn to boost investment returns, perhaps before any claims would need to be paid," said Brian Schneider, a senior director at Fitch Ratings. "For CNA, transferring risk gives it more certainty."
Loss for CNA
CNA said it expected to incur a $375m after-tax loss when the Berkshire transaction closes later this quarter. Chief executive Thomas Motamed said in a statement that the transaction would "effectively eliminate a significant source of uncertainty" for the Chicago-based company.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
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