Berkshire Hathaway to muscle into business insurance sector
Berkshire Hathaway is making a strong move into the business insurance sector in order to have a greater impact on how this sector operates. The company has been looking to enter into new sectors of the global insurance industry lately in order to take advantage of new opportunities that exist in developing markets around the world. In the past, the company has pushed into the business insurance sector due to certain trends, but this time is different for Berkshire Hathaway.
Company cites dropping prices as reason for move
Traditionally, Berkshire Hathaway has entered into the business insurance sector due to prices within this sector growing. The insurer notes, however, the price spikes are becoming much less common, thus the company has been forced to grow more proactive with its approach to the business insurance sector. Berkshire Hathaway notes that significant price decreases are the reasons behind the company’s push into this sector this time around.
Catastrophe bonds prove lucrative for some
Catastrophe bonds are seeing more prominent activity in some parts of the world. Investors are beginning to find that they can purchase these bonds and then sell them again and receive relatively high returns. Berkshire Hathaway is interested in getting more involved in markets where this trend has become exaggerated. The insurer believes that this will help it find some degree of financial balance in the long term.
Business insurance sector continues to evolve
Like others aspects of the insurance industry, the business insurance sector is undergoing numerous changes that are having a dramatic impact on how the sector itself operates. Some of the trends that have emerged in this sector have been positive, encouraging large companies like Berkshire Hathaway to make aggressive moves therein. Smaller companies have been experiencing some turbulence, however, due to the lack of resources they have available to them when compared to larger companies.