Berkshire and Caixa Bank - Reinsurance Deal

[fareastwarriors]

Berkshire Hathaway, CaixaBank Agree to Reinsurance Deal

 

http://professional.wsj.com/article/SB10001424127887323751104578150731361974830.html?mg=reno64-wsj

[valueinvesting101]

What exactly Berkshire getting in return? No article mentions expected cash Berkshire is expected to receive or liability they are taking on. I am sure WEB has done good deal for Berk but I want to understand what is going on.

[racemize]

they get the cash flows from the life insurance I believe. 

[gfp]

This article explains it a bit more - it is apparently similar to an embedded value risk transfer, similar to a securitization of a life portfolio

 

http://www.artemis.bm/blog/2012/11/30/buffetts-berkshire-hathaway-bets-on-future-values-of-life-insurance/

 

which is this:

"Embedded value securitizations, in which insurers transfer all the risk from a block of business to investors, are returning after a hiatus during the financial crisis. The main benefit of these transactions is that "you're effectively releasing equity capital"

http://www.insurancenetworking.com/news/securitization-standard-poors-reserves-30529-1.html