Warren Buffett is still interested in “shooting elephants” but is not interested in issuing Berkshire Hathaway shares to fund acquisitions. Read this article for a brief review of Mr. Buffett’s recent comments and to view a CNBC interview.
Swiss Re has projected claims costs of $1.2 billion net of retrocession and before taxes due to the disasters in Japan. The company emphasizes that a great deal of uncertainty remains due to the difficult situations that still exist in the hard hit areas of Japan. Read this article for more details.
Berkshire has wrapped up a major victory with repayment of the Swiss Re convertible perpetual capital instrument which provided critical funding for Swiss Re in early 2009 at a time when the company was reeling from heavy investment portfolio losses in 2008 and had an urgent need to shore up its capital position. Read this article for more details.
In a surprising development, Swiss Re has reached an agreement with Berkshire Hathaway to repurchase the CHF 3 billion convertible preferred security which represented a large injection of cash into Swiss Re at a time when the company was at risk of a ratings downgrade. We discussed the terms of the investment shortly after the deal was finalized in March 2009. Read this article for more details and analysis.
Initial reports regarding the Deepwater Horizon disaster indicated that BP was self insured for the costs of the massive cleanup efforts that will likely be required for years to come. While BP claims to be willing to pay for all “legitimate claims”, it is already inevitable that the economic fallout will extend far beyond BP’s shareholders. Read this article for more details.