Berkshire Hathaway Rtgs Afrmd by S&P After Anncmnt General Reinsurance Corp.NEW YORK--(BUSINESS WIRE)--June 23, 1998--Standard & Poor's today affirmed its triple-'A' financial strength ratings for the members of the Berkshire Hathaway Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) is a conglomerate holding company headquartered in Omaha, Nebraska, U.S., that oversees and manages a number of subsidiary companies. Insurance Group, following the company's decision to acquire General Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Corp. (Gen Re). Berkshire Hathaway Inc.'s triple-'A' counterparty credit and senior debt ratings also were affirmed. Also, the financial strength ratings of Gen Re and Cologne Reinsurance Co., as well as the senior debt rating of Gen Re, were affirmed at the triple-'A' level. In addition, the triple-'A' counterparty credit rating of General Re Financial Products Corp. (GRFP GRFP Graduate Research Fellowship Program ) was affirmed. The acquisition, valued at $22 billion, is significantly larger than historical standards would indicate for Berkshire Hathaway. It does, however, conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the basic criteria outlined by Warren Buffett Warren Buffett Known as "the Oracle of Omaha," Buffett is Chairman of Berkshire Hathaway and arguably the greatest investor of all time. His wealth fluctuates with the performance of the market, but for the last few years he has been reported to be worth over $30 billion, making . The acquisition will create an insurance group with nearly $40 billion in GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). capital and $11.4 billion in net premiums written as of Dec. 31, 1997. Thecombination creates the world's largest reinsurance group in terms of capital and the second largest in terms of net premiums written. The acquisition is not expected to have a material impact on Gen Re's operations, as there is little overlap between the two insurance groups. Prospectively, Standard & Poor's believes that the combination will result in greater risk retention by Gen Re and a more aggressive investment policy. Gen Re and National Indemnity will continue to operate on a parallel basis within the Berkshire Family. Going forward, Standard & Poor's expects National Indemnity to continue to be opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. while Gen Re uses its strong production capabilities and brand name to aggressively expand overseas. GRFP is a subsidiary of Gen Re, established in 1990 to provide derivative and other risk management products. GRFP will also benefit from the increased capital base and financial flexibility this acquisition will provide, Standard & Poor's said. Copyright 1998, Standard & Poor's Rating Services
CONTACT: Vandana Sharma, New York (1) 212-208-8924
Donald S Watson, New York (1) 212-208-8446
Patricia E McWeeney, New York (1) 212-208-1981
For more information on criteria or subscriptions:
http://www.ratings.standardpoor.com
|
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion