Buffett’s Berkshire Hathaway reinsures variable annuity risks, bets against longevity
February 7, 2013 by Admin
Making the news today is another large and interesting reinsurance transaction involving Warren Buffett’s Berkshire Hathaway Inc. which sees the firm taking on variable annuity risks and as a result assume some exposure to mortality and longevity risks. In a reinsurance deal worth $2.2 billion, Berkshire Hathaway will reinsure the risks associated with $4 billion of future claims for two of health insurer Cigna Corp’s run-off variable annuity businesses. Under the terms of the transaction which was announced late yesterday, Buffett’s Berkshire Hathaway Life Insurance Co. of Nebraska will reinsure Cigna’s run-off Guaranteed Minimum Death Benefits or VADBe, and Guaranteed Minimum Income Benefits or GMIB businesses, effective Monday, 4th February. Click here to read…