That's one way to address overcapacity in the industry.
Pity for Warren though. As we said in "Reinsurance Industry Approaches Record Levels" (BRK-B; BRK-A):
This is just a bookmark for a piece I had promised and not delivered, divining the insurance industry's thinking on global warming.
I put Berkshire in the title because in addition to being the world's third largest reinsurer they recently upped their stake in #1 ranked* Munich Re to 7.99%.
Berkshire Hathaway also owns 3% of Swiss Re and has 3Billion Swiss francs worth of some yummy 12% notes, convertible at 25CHF i.e. 120Mil. shares, current outstanding 354Mil.; last trade 52.35 CHF....
*Munich Re and Swiss Re have swapped the #1 ranking the last few years. We'll have the final 2009 tally by June.From Bloomberg:
Swiss Reinsurance Co. may spend as much as $3.5 billion on share buybacks and dividends to return excess capital to shareholders, said Chief Financial Officer George Quinn.
The world’s second-biggest reinsurer, which has about $10 billion of excess capital, plans to use $1.5 billion to $3.5 billion “for share buybacks, dividends and other business opportunities,” Quinn said today in an interview in Monaco. Swiss Re rose the most in more than three months in Zurich trading.
Swiss Re plans to repay $3.5 billion to Warren Buffett’s Berkshire Hathaway Inc. from March next year after the investor injected $3 billion of capital to plug writedowns related to the financial crisis last year. The company aims to hold between $3 billion and $5 billion of reserves above the amount required by Standard & Poor’s Ratings Services for an AA rating, leaving the remainder available for buybacks and dividends, Quinn said.
“We have too much capital at the moment,” he said. “After we’ve redeemed Berkshire we’ll think of other forms of capital repatriation such as buybacks for ordinary shareholders.”...MORE