fareastwarriors Posted November 30, 2012 Share Posted November 30, 2012 Berkshire Hathaway, CaixaBank Agree to Reinsurance Deal http://professional.wsj.com/article/SB10001424127887323751104578150731361974830.html?mg=reno64-wsj Link to comment Share on other sites More sharing options...
valueinvesting101 Posted November 30, 2012 Share Posted November 30, 2012 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. Link to comment Share on other sites More sharing options...
racemize Posted November 30, 2012 Share Posted November 30, 2012 they get the cash flows from the life insurance I believe. Link to comment Share on other sites More sharing options...
gfp Posted November 30, 2012 Share Posted November 30, 2012 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 Link to comment Share on other sites More sharing options...
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