Berkshire boosts liability estimate on AIG reinsurance contract

From Reuters - February 24, 2018

Feb 24 (Reuters) - Berkshire Hathaway Inc, the conglomerate run by billionaire Warren Buffett, on Saturday disclosed a $1.8 billion increase in estimated claim liabilities under a big reinsurance contract with American International Group Inc.

In its annual report, Berkshire said the increase, to $18.2 billion, was made in the fourth quarter, and was based on higher-than-expected loss payments reported by AIG.

Berkshire also boosted a related deferred charge asset by $1.7 billion, and estimated its year-end net liability under the contract was $10.7 billion.

The January 2017 contract called for Berkshires National Indemnity Co to take on many of the long-term risks in AIGs property and casualty portfolio, sometimes known as long-tail exposure, in exchange for $10.2 billion upfront.


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