DooDiligence Posted May 17, 2022 Share Posted May 17, 2022 1 hour ago, gfp said: 1st quarter NAIC filing for National Indemnity. Will post the pdfs later but traveling currently Diviértete Link to comment Share on other sites More sharing options...
Ballinvarosig Investors Posted May 17, 2022 Share Posted May 17, 2022 6 hours ago, gfp said: For the German companies Berkshire purchased in Q1, they were: Allianz, Munich Re and BASF Thanks! I had thought Allianz was the most likely one. Munich Re has really good numbers too, but Buffett sold it a few years back, which made me think he wouldn't want to get back into it. I mean how often does he sell something, only to buy back in later? BASF is one I would need to look into more. I did look at it and it looked cheap, but it was a bit lumpy and isn't really growing. Link to comment Share on other sites More sharing options...
gfp Posted May 17, 2022 Share Posted May 17, 2022 (edited) 20087.2022.P.Q1.P.O.1.4376224.pdf This is the Q1 2022 NAIC filing for National Indemnity. The screenshot I posted earlier is from page 155 I believe. There is a lot of detail to scroll through to get to anything interesting. Don't worry about the trades in American Express, this is just National Indemnity buying this stock from other Berkshire subsidiaries (not a taxable event). Page 157 shows the average price they sold most of the Verizon stock for - $52.64 / share, a loss of about a billion dollars before dividends and tax benefit. Edited May 17, 2022 by gfp Link to comment Share on other sites More sharing options...
John Hjorth Posted May 17, 2022 Share Posted May 17, 2022 (edited) Thank you very much for sharing, gfp, It's very much appreciated. Interesting stuff to dive into. - - - o 0 o - - - On another note, related to what has been posted in this topic recently, the mystery about the omission KO in the notes to the BRK 10-Q about material stock positions has been revealed in the BRK EOP 2022Q1 13F-HR. A KO stock position valued at USD 29.8 B is now considered immaterial, so that it doesn't qualify to be considered material in the notes of the BRK 10-Q, based on its value, or Mr. Hamburg has decided "the limit" to the "material"-podium to be restricted to five. Personally, I think we need to get used to things like this going forward. [Berkshire's reporting has been "cartoon-figures" for years now. - - - o 0 o - - - Best wishes for an enjoyable vacation in Spain. Edited May 17, 2022 by John Hjorth Link to comment Share on other sites More sharing options...
HeadOfLeverage Posted May 17, 2022 Share Posted May 17, 2022 Had a quick look at the German positions, they feel similar to Verizon as an alternative to cash/bonds, possibly with some tailwinds from a hardening insurance market and shortages in chemicals. Link to comment Share on other sites More sharing options...
dajidali Posted May 18, 2022 Share Posted May 18, 2022 BRK invested in Markel Buffett's Berkshire takes $620m stake in Markel - Reinsurance News Link to comment Share on other sites More sharing options...
Spekulatius Posted May 24, 2022 Share Posted May 24, 2022 (edited) On 5/17/2022 at 4:17 PM, HeadOfLeverage said: Had a quick look at the German positions, they feel similar to Verizon as an alternative to cash/bonds, possibly with some tailwinds from a hardening insurance market and shortages in chemicals. I know BASF well. The stock looks cheap and pays a nice dividend, but I think they have structural issues now as a huge consumer of natural gas and electricity. I think this business may have a permanent input cost issue, due to dependency from Russian NG. Edited May 24, 2022 by Spekulatius Link to comment Share on other sites More sharing options...
gfp Posted June 1, 2022 Share Posted June 1, 2022 Following reports that the 6/1 cat renewals were not going smoothly, there is a report that Berkshire wrote at least one large reinsurance policy for a Florida carrier (HCI). Hopefully Ajit got some more big deals done on good terms. https://www.insuranceinsider.com/article/2a65bnb78rcx9lqkk58u8/reinsurers-section/berkshire-hathaway-writes-400mn-line-on-floridian-carrier-hcis-reinsurance-treaty Link to comment Share on other sites More sharing options...
longterminvestor Posted June 1, 2022 Share Posted June 1, 2022 I am a retail agent in FL. Market is really tough for Florida Property/CAT Wind. Coastal Condo placement I just heard went from $400K premium to $1.3M Premium and broker still hasn't placed the top layers for the 5/31 renewal date. I have personally seen/placed accounts with 100%-150% premium increases. Counterparties comparing this market to buying Terrorism post 9/11. Have not seen any Berkshire paper on a retail placement for large deals, they last quoted in 2013-2014 but pulled out because market was getting too soft. Excerpt from article linked below. I am not a reinsurance expert, but the "one reinsurance company" has to be GenRe and clearly they are getting their price. For context, I do know these reinsurance placements are largely on homeowners business and some residential condos. “Market reports are that most domestic carriers have placed less than 80% of their required external placements prior to the Memorial Day weekend, and many far less than that. In one case, as of early Friday: zero. The current shortfall is well over $10B of unplaced limit. Their brokers are hard pressed for solutions,” says Stonybrook, a specialist strategic advisory and investment banking firm focused exclusively on the insurance and reinsurance industry. The firm goes on to note that it’s aware of at least one large reinsurance company and one large catastrophe fund that are actively quoting new limits, albeit at unacceptable terms. https://www.reinsurancene.ws/well-over-10bn-of-unplaced-limit-at-june-1-further-downgrades-expected-stonybrook/ Link to comment Share on other sites More sharing options...
gfp Posted June 1, 2022 Share Posted June 1, 2022 Thanks for the on-the-ground color. It is really interesting. I had posted this article on Sunday over on the Joe thread - recounts a similar situation as of Sunday. Berkshire and DE Shaw are quoting but at their price. Nice to see a few large deals getting done though. One of my favorite Berkshire deals in Florida was years ago when they wrote a policy where all they had to do in the event of a super-cat above a certain size was agree up-front to buy municipal bonds from the state insurance fund. Didn't end up being a big year for storms and Berkshire didn't buy the bonds, but what a concept - instead of paying a claim you just buy muni bonds... In New Orleans, I expected some of our policies to go way up based on what is happening to other people here. Our Flood policies, which are priced by Fema under a new opaque formula for the first time this year (risk rating 2.0), went down by 25%. Our homeowners and rental property policies stayed approximately the same. I think the new standing seam roof ended up offsetting a rate rise at home and our other properties didn't have claims for Ida. We use USAA for insurance though, and most other carriers are just exiting the market. USAA seems to stick with their members or at least we hope so. Here is the Sunday blurb out of Insurance Insider - "Storm clouds gather over the Sunshine State The 1.6 renewals in Florida are proving to be the toughest in a generation. With only three days to go before the deadline for the 1 June reinsurance renewals, there is still a plethora of unplaced business in the market. As this publication reported in a deep-dive analysis piece earlier this week, the property treaty market is now in a “state of chaos” as a sense of acceptance builds that a number of placements will not get over the line in time. Late on Wednesday, Florida governor Ron DeSantis signed into law two key bills in an attempt to limit surging property loss costs. However, the response to the action has been muted. Among the concerns raised have been whether the size of the announced $2bn reinsurance fund – which will sit beneath the Florida Hurricane Catastrophe Fund and provide cedants with much-needed access to low-layer limit – is adequate. One market source described the first of the two bills – which would establish the so-called Reinsurance to Assist Policyholders (RAP) program as “sticking a Band-Aid on a broken leg”. And analysts at KBW said that they did not expect the initiative to “meaningfully impact” demand or the soaring costs of private reinsurance. In an exclusive interview with this publication, Demotech’s Joe Petrelli said the ratings agency will not lower its minimum reinsurance requirements despite the likelihood of major holes in the cat programs of a significant number of Florida carriers. He also noted that the RAP reinsurance fund does not cover tropical storms or other non-hurricane events, leaving carriers who utilise it and don’t buy low down private cover bare for those perils. Meanwhile on Friday, we reported that, for those carriers with deep enough pockets for private deals, Berkshire Hathaway (BH) and DE Shaw – often described as reinsurers of last resort – were understood to have been quoting private layers in recent days. " Link to comment Share on other sites More sharing options...
gfp Posted June 1, 2022 Share Posted June 1, 2022 BNSF was able to borrow $1B for 30 years at 4.5% - still an extremely attractive environment for high quality corporate borrowers. This was priced yesterday - https://www.sec.gov/Archives/edgar/data/934612/000119312522164076/d358107dfwp.htm Link to comment Share on other sites More sharing options...
gfp Posted June 8, 2022 Share Posted June 8, 2022 Some here might be interested in the minutiae of National Indemnity's business - this lawsuit was recently filed by NICO against 7 reinsurers for not paying their share of an asbestos settlement NICO agreed to with the state of Montana arising from policies written by NICO in 1973-75 (after Berkshire bought NICO but before Ajit was hired). NICO settled with Montana in April 2022 for $157 million to resolve the matter (some of this had already been paid) and sent a bill to each of the 7 reinsurers who basically indicated they weren't paying. Page 6 and 7 of the lawsuit show the figures. NICO has billed the reinsurance companies (many of them successors to the original companies) a total of $104.5m. show_temp.pl-11.pdf Link to comment Share on other sites More sharing options...
alpha Posted June 8, 2022 Share Posted June 8, 2022 Howard Buffet is meeting with President Zelensky in Ukraine - Link to comment Share on other sites More sharing options...
DooDiligence Posted June 8, 2022 Share Posted June 8, 2022 3 hours ago, alpha said: Howard Buffet is meeting with President Zelensky in Ukraine - My first thought was holy fuck, they're gonna open a Nebraska Furniture Mart. Then I started reading this. www.thehowardgbuffettfoundation.org/wp-content/uploads/2021/05/2019-2020-AR.pdf I like the way he addresses US migrant workers. This is a TL/DR but you can scan for keywords. Howard might be a serious guy. Link to comment Share on other sites More sharing options...
cubsfan Posted June 8, 2022 Share Posted June 8, 2022 10 hours ago, gfp said: Some here might be interested in the minutiae of National Indemnity's business - this lawsuit was recently filed by NICO against 7 reinsurers for not paying their share of an asbestos settlement NICO agreed to with the state of Montana arising from policies written by NICO in 1973-75 (after Berkshire bought NICO but before Ajit was hired). NICO settled with Montana in April 2022 for $157 million to resolve the matter (some of this had already been paid) and sent a bill to each of the 7 reinsurers who basically indicated they weren't paying. Page 6 and 7 of the lawsuit show the figures. NICO has billed the reinsurance companies (many of them successors to the original companies) a total of $104.5m. show_temp.pl-11.pdf 107.22 kB · 14 downloads Damn - that is what you call Long tail... Link to comment Share on other sites More sharing options...
Munger_Disciple Posted June 9, 2022 Share Posted June 9, 2022 Alleghany shareholders approve the deal with Berkshire: https://finance.yahoo.com/news/alleghany-corporation-stockholders-approve-acquisition-151300741.html Link to comment Share on other sites More sharing options...
Cigarbutt Posted June 10, 2022 Share Posted June 10, 2022 On 6/8/2022 at 8:23 AM, gfp said: Some here might be interested in the minutiae of National Indemnity's business - this lawsuit was recently filed by NICO against 7 reinsurers for not paying their share of an asbestos settlement NICO agreed to with the state of Montana arising from policies written by NICO in 1973-75 (after Berkshire bought NICO but before Ajit was hired). NICO settled with Montana in April 2022 for $157 million to resolve the matter (some of this had already been paid) and sent a bill to each of the 7 reinsurers who basically indicated they weren't paying. Page 6 and 7 of the lawsuit show the figures. NICO has billed the reinsurance companies (many of them successors to the original companies) a total of $104.5m. show_temp.pl-11.pdf 107.22 kB · 22 downloads Interesting. Thank you for sharing here. The largest reinsurer on the hook is TIG, an FFH's subsidiary.. ----- Anything can happen but it's likely that National Indemnity will get paid by reinsurers. NICO has already paid 16.1M in 2009 (with the intention to recuperate the sum). The final amount due went from 43.6M in 2011 to 97.8M in 2019 to 157.2M last April. That's what they mean by 'social' inflation.. Montana obtained policies from NICO during 1973-5 and started to receive asbestos-related lawsuits in the early 2000s and first notified NICO in 2002. NICO (opinion) appropriately denied coverage because Montana knew about toxic levels of asbestos since 1942 and, in 21 different occasions after inspections over the years, failed to take action. The strategy NICO used was to argue that Montana had failed to share this info when the policies were contracted, that it should only be responsible for the years during the policies were written on a pro-rata basis coverage (and not on a cumulative basis) and chose a specific definition of "occurrence" that was reasonable and limited $ coverage. The courts, as the issues moved up, decided that NICO had failed to assist Montana in its defense against litigants (potential link with the reinsurers' refusal to pay) and was therefore responsible for damages. The late 2021 Montana Supreme Court decision was particularly acute against NICO vs its arguments as the decisions from lower courts were maintained and even expanded and the "occurrence" definition was remanded to lower courts for factual and technical evaluation but with guidance. Ouch. A major guide for the contractual relationship between the insurer and the reinsurer is the follow-the-fortunes doctrine which is related to the follow-the-settlements doctrine. Basically, unless fraud, bad faith or obvious behavior only to maximize reinsurance recovery is present, the right to 'discovery' is limited and reinsurers are expected to defer to the reinsured parties for both claims handling and allocation of damages and settlements. In this case, NICO chose a reasonable strategy that did not work out and the allocation/settlement scheme has been pretty much imposed on them by the courts. TIG and the rest will likely have to pay, with interest. Clearwater, another FFH's sub involved in toxic runoff helped to build case law: Lexington Ins. Co. v. Clearwater Ins. Co. (Mass. Sup. Ct. July 26, 2011). Follow-the-fortunes and follow-the-settlements binds a reinsurer to post-settlement allocations absent gross negligence or bad faith on the part of the cedent. Link to comment Share on other sites More sharing options...
gfp Posted June 10, 2022 Share Posted June 10, 2022 Thanks for the detailed run down. You may be interested in (or entertained by) this case if you haven't already seen it. Seems possible that it is another case of denying coverage and having it look like you chose not to defend your insured in court and then having the whole thing blow up on you without ever having the opportunity to defend your interests in court. https://www.courts.mo.gov/file.jsp?id=187183 Cliffs notes: A couple get intimate in a GEICO insured vehicle. One catches HPV from the other. GEICO told to pay $5.2 million. The HPV-giving party knew they had HPV because they were previously told that their throat cancer tumor tested positive for HPV. GEICO denies claim. The intimate couple appears to be working together (likely fraud imo), went to arbitration, were awarded a ton of money and GEICO is told to pay it. Of course they also offered to settle within the policy liability limits earlier ($1m), which I understand to have the effect of effectively eliminating the policy liability limit once GEICO declines to accept the settlement offer within the policy limits. The linked case is GEICO's appeal (which they lost). Link to comment Share on other sites More sharing options...
Cigarbutt Posted June 10, 2022 Share Posted June 10, 2022 12 minutes ago, gfp said: Thanks for the detailed run down. You may be interested in (or entertained by) this case if you haven't already seen it. Seems possible that it is another case of denying coverage and having it look like you chose not to defend your insured in court and then having the whole thing blow up on you without ever having the opportunity to defend your interests in court. https://www.courts.mo.gov/file.jsp?id=187183 Cliffs notes: A couple get intimate in a GEICO insured vehicle. One catches HPV from the other. GEICO told to pay $5.2 million. The HPV-giving party knew they had HPV because they were previously told that their throat cancer tumor tested positive for HPV. GEICO denies claim. The intimate couple appears to be working together (likely fraud imo), went to arbitration, were awarded a ton of money and GEICO is told to pay it. Of course they also offered to settle within the policy liability limits earlier ($1m), which I understand to have the effect of effectively eliminating the policy liability limit once GEICO declines to accept the settlement offer within the policy limits. The linked case is GEICO's appeal (which they lost). Funny you mention that. Just a few minutes ago, i read this (from a specialized legal publication medium, MSN), saw a potential link with social inflation and decided not to put it here to avoid thread derailment. Geico may have to pay $5.2 million to woman who claims she contracted STD in a car insured by the company (msn.com) ----- There is something broken in the US legal system but am confident it's more a relative low in your typical but unusual cycles. ----- Personal note For about 20 years, as a peripheral and marginal sideline activity, i provided expert testimony and participated in administrative decisions. The typical case meant to appear in court and find out, on the spot, who would be responsible for the hearing and decision. That designation was often the determinant factor in the outcome, sometimes almost irrespective of underlying merit and forced parties to settle immediately, before appearing. This meant for me full payment and release, allowing time to prepare for the next case and this single day honorarium equivalent was almost enough to bring the family (to Spain a few times) on vacation for a few weeks. In this Montana specific case, i'd say NICO had to to play a similar strategy: If you can't beat them, join them (and share the bill). ----- Back to relevant news. Link to comment Share on other sites More sharing options...
gfp Posted June 10, 2022 Share Posted June 10, 2022 Bloomberg is running an article today saying that big tech companies (Google, Meta & Microsoft) are opposing MidAmerican's proposed $3.9 Billion "Wind PRIME" project (2042 megawatts of wind + 50 megawatts of solar). MidAmerican is asking state regulators for approval and an 11.25% guaranteed return. https://www.midamericanenergy.com/newsroom/2022-wind-prime-announcement bloomberg article (some paywall) https://www.bloomberg.com/news/articles/2022-06-10/it-s-warren-buffett-versus-big-tech-in-iowa-s-latest-wind-farm-debate?srnd=premium#xj4y7vzkg Link to comment Share on other sites More sharing options...
Spekulatius Posted June 10, 2022 Share Posted June 10, 2022 (edited) 3 hours ago, Cigarbutt said: Funny you mention that. Just a few minutes ago, i read this (from a specialized legal publication medium, MSN), saw a potential link with social inflation and decided not to put it here to avoid thread derailment. Geico may have to pay $5.2 million to woman who claims she contracted STD in a car insured by the company (msn.com) ----- There is something broken in the US legal system but am confident it's more a relative low in your typical but unusual cycles. ----- Personal note For about 20 years, as a peripheral and marginal sideline activity, i provided expert testimony and participated in administrative decisions. The typical case meant to appear in court and find out, on the spot, who would be responsible for the hearing and decision. That designation was often the determinant factor in the outcome, sometimes almost irrespective of underlying merit and forced parties to settle immediately, before appearing. This meant for me full payment and release, allowing time to prepare for the next case and this single day honorarium equivalent was almost enough to bring the family (to Spain a few times) on vacation for a few weeks. In this Montana specific case, i'd say NICO had to to play a similar strategy: If you can't beat them, join them (and share the bill). ----- Back to relevant news. Seems like the same method could be applied to lay off child rearing expenses to an insurer. Edited June 10, 2022 by Spekulatius Link to comment Share on other sites More sharing options...
gfp Posted June 10, 2022 Share Posted June 10, 2022 Microsoft has joined Google and Facebook to participate in a group potentially opposing MidAmerican's proposed $3.9B Wind PRIME wind+solar project in Iowa. MidAmerican is seeking approval and would like an 11.25% regulated return. https://finance.yahoo.com/news/warren-buffett-versus-big-tech-130015233.html Link to comment Share on other sites More sharing options...
gfp Posted June 10, 2022 Share Posted June 10, 2022 This is the CEO of soon-to-be-consolidated-subsidiary Pilot Corporation talking about Union Pacific's demands that Pilot reduce their rail shipments by up to 50% on some routes. Pilot distributes 20% of the diesel and 30% of the diesel exhaust fluid (DEF) in the country. Much of this is shipped by rail. I wonder what Union Pacific's side of this story is? Link to comment Share on other sites More sharing options...
Cigarbutt Posted June 10, 2022 Share Posted June 10, 2022 50 minutes ago, Spekulatius said: Seems like the same method could be applied to lay off child rearing expenses to an insurer. The meaning (message?) is not clear. Can you elaborate? Link to comment Share on other sites More sharing options...
LC Posted June 10, 2022 Share Posted June 10, 2022 30 minutes ago, Cigarbutt said: The meaning (message?) is not clear. Can you elaborate? "I got pregnant in a Geico insured car, now Geico you've got 18 years of support to pay..." Link to comment Share on other sites More sharing options...
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