(Bloomberg) -- Gen Re, one of the giant reinsurance businesses at Warren Buffett’s Berkshire Hathaway Inc., said it’s exiting property-casualty operations at six smaller locations amid a global reorganization.
The reinsurer said Thursday that it plans to shutter operations in Hong Kong; Melbourne; Riga, Latvia; Seattle; St. Paul, Minnesota; and Charlotte, North Carolina. The company will continue to serve those markets out of larger offices.
“We have reviewed our entire global footprint, and with this change, we are positioning Gen Re’s property and casualty operation to address the realities of today’s markets,” Bob Jones, a president at the reinsurer, said in a statement. “We need to deliver underwriting and claims expertise in the most effective manner, while not compromising the quality of our products and promises.”
Buffett has soured some on the prospects for reinsurers, which help primary carriers spread out risk and shoulder the costliest claims. The price of coverage has slumped amid a glut of capital in the industry, and as Wall Street dreamed up other ways to provide the protection.
As a result, Omaha, Nebraska-based Berkshire has increasingly focused on building primary insurance operations. One of those businesses announced an expansion into Europe Thursday.
While Gen Re has managed to boost sales in its international life operation in recent years, property and casualty has turned down business because rates are too low to compensate for the risk assumed. Policy sales in that segment slipped 9% to $2.7 billion in 2015 from a year earlier, after adjusting for foreign currency exchange rates. Pretax underwriting profit fell 26% to $150 million.
In addition to the office closures, Gen Re said it would organize its European Treaty operation around five types of business. Teams representing those areas will now serve the entire region, according to the statement.
Please give us a Like on Facebook!
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
