*from www.bloomberg.com, May 3, 2013 (To view original article click here.)
Take Away #1: Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (BRK/A), is planning an expansion in commercial insurance after hiring four executives from American International Group Inc. (AIG).
Key Facts and Figures:
- “We would like to get into the commercial-insurance business very big time,” Buffett said yesterday.
- “We hired them because they’re very good at the commercial insurance business,” said Buffett.
- Peter Eastwood, CEO of AIG’s property-casualty operation in the Americas, was among executives joining Berkshire, along with other managers with commercial-insurance experience.
- AIG named executives this week to fill some posts after the insurer’s shares dropped 3.3% on April 26, as the departures were reported.
- Berkshire has units that provide auto coverage and reinsurance and hasn’t played a big role in providing business policies, Buffett said.
Take Away #2: Buffett, who’s also Berkshire’s CEO said he didn’t poach the executives from New York-based AIG.
Key Facts and Figures:
- “They came to us, they’ve called,” Buffett said.
- “In fact some of them have called for a long time, so we did not initiate any of that,” said Buffett.
- Robert Schimek was promoted by AIG to lead the Americas property-casualty unit.
- Alexander Baugh took over the global casualty business, replacing David Fields, who left with Eastwood.
Take Away #3: AIG has been scaling back from some capital-intensive coverage, as CEO Robert Benmosche seeks to boost profits after repaying a U.S. bailout.
Key Facts and Figures:
- AIG agreed to pay Omaha-based Berkshire $1.65 billion in 2011 to assume risk tied to asbestos policies, in a deal that gave Buffett funds to invest.
- AIG has “a strong bench of seasoned property-casualty experts with deep product and global expertise,” Peter Hancock, CEO of AIG’s property-casualty business said.
- The insurer “will continue to win on merits in every market where we choose to compete,” said Hancock.
Take Away #4: The executive defections prompted the first question on a conference call AIG held today to discuss first-quarter results.
Key Facts and Figures:
- Benmosche responded that AIG retained 94% of the top performers among the insurer’s senior management last year.
- “I know you want to focus on four people in the property- casualty business,” Benmosche said.
- “We’re going to lose people to competitors from time to time,” said Benmosche.
*To view original article from www.bloomberg.com click here.