In a press release Thursday, Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) announced that "Berkshire Hathaway Specialty Insurance, its recently formed commercial property casualty insurance group, has commenced operations, underwriting property, casualty, professional and executive liability insurance and programs for customers in the U.S."
Meanwhile, Berkshire CEO Warren Buffett offered the following words:
It's official: We are moving into commercial insurance in a substantial way, and we are here to stay. With our proven underwriting discipline and financial strength, along with a stellar management team, Berkshire Hathaway Specialty Insurance is a welcome solution for customers seeking large-scale property and casualty capacity for the long term.
The release goes on to say that the policies are being underwritten on the non-admitted paper of National Fire & Marine Insurance Company, which is one of Berkshire's existing excess and surplus insurance companies, and itself a subsidiary of Berkshire's National Indemnity Group.
Of course, this shouldn't exactly come as much of a surprise. Remember, the folks at Berkshire raised some eyebrows in April when they snagged four senior executives from American International Group, including Peter Eastwood, the head of AIG's domestic property-casualty operations. The other three hires included AIG's Lexington unit president, David Bresnahan, former AIG president of property-casualty operations in Latin America and the Caribbean, Sanjay Godhwani, and AIG's president of risk finance, David Fields.
Sure enough, according to the announcement, here's the current executive line-up for Berkshire Hathaway Specialty Insurance:
- Peter Eastwood, president
- David Bresnahan, executive vice president -- casualty, health, professional and executive liability
- Sanjay Godhwani, executive vice president -- property and programs
- David Fields, executive vice president -- underwriting, actuarial, finance and reinsurance
- David Crowe, senior vice president -- claims
As for the last name on that list, David Crowe, his LinkedIn page unsurprisingly lists his most recent employer as Chartis -- an AIG subsidiary -- where he served as the global head of commercial property claims.
Foolish final thoughts
In the end, as I noted back in April, Berkshire shareholders should be ecstatic with this move considering Eastwood has already mentioned their first task is to penetrate the $25 billion U.S. excess and surplus market, of which Berkshire currently holds just 1.6%. Compare that to AIG's enviable 20% market share, and it's easy to see why Warren Buffett couldn't help to better position his company to even the playing field.