American International Group, Inc. (“AIG”) recently announced that it entered into a significant reinsurance agreement with a subsidiary of Berkshire Hathaway Inc. (“Berkshire”). Reportedly, that agreement “covers 80% of substantially all of AIG’s U.S. Commercial long-tail exposures for accident years 2015 and prior.” While AIG states that it “will retain sole authority to handle and
Berkshire Hathaway
The Future of Monolines?
By Ann Kramer on
Felix Salmon reads the tea leaves left by Warren Buffet and concludes that the already disastrous monoline situation is unlikely to improve any time soon. Money quote:
Given all these reasons to buy bonds rather than insure them, I do wonder what’s going to happen to the monoline market. Historically, it’s been a license to print money — but it might be a very long time before it re-emerges.
Remember, when Buffett’s Berkshire Hathaway Assurance Corp. rode in to rescue the imploding monoline municipal bond insurance market at the request of the NY Insurance Department? Now, after little more than a year in the business, Buffett wants out.Continue Reading The Future of Monolines?