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Wanted: Detailed Explanation of the Swiss Re retrocession


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Would anyone care to give a detailed explanation of the retrocession deal between Swiss Re?


So BRK gave Swiss Re: 1.3 billion for which BRK will assume the reinsurance of a block of term life policies.  Presumably the original insurer will be paying BRK annually on the insurance.  Now, Swiss will have freed up 300mm in capital.  For Swiss this business does not meet its hurdle rate, obviously for BRK it does.


Would any insurance experts care to expound?

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Smells like the equitas deal to me. Increases float for BRK and frees up the reserves for Swiss Re. Looks like a win-win situation for both.



Yup.  "Swiss Re will reinsure a closed block of yearly renewable term life insurance, written before 2004, with Berkshire Hathaway Life Insurance Corporation of Omaha Nebraska."

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