Commercial insurance proves attractive for Berkshire Hathaway
Berkshire Hathaway, a multinational conglomerate with strong ties to the insurance industry, has somewhat ambitious plans to expand its commercial insurance business in the coming years. The company has remained somewhat stagnant with its commercial lines for some time, biding its time and hoping to ride out some of the turbulence that has been common throughout the insurance industry recently. The company recently acquired four new executives from the American International Group (AIG), and now plans to put more focus on its commercial insurance lines with the help of their expertise.
Buffett has high hopes for commercial insurance
Warren Buffett, the current CEO of Berkshire Hathaway, claims that commercial insurance will become a significant factor for the company. Buffett also suggests that Berkshire Hathaway will become a formidable force in this sector due to the measures it will take in the coming months. The CEO claims that AIG executives had been approaching the company for several years, but timing had prevented Berkshire Hathaway from putting more force behind its presence in the commercial insurance sector.
Company to build its own businesses
Notably, Berkshire Hathaway plans to build new commercial insurance businesses from the ground up, rather than purchase these businesses outright. Buffett notes that the company had been looking for commercial insurance businesses it could purchase at the “right price,” but such businesses did not exist in the current market. Thus, the company is keen to build these businesses itself and may be able to tailor these businesses to the needs of their particular markets.
Buffett believes the time is right for commercial insurance businesses
Commercial insurance has been showing strong promising growth in recent years despite some turbulence. This growth has made this sector more attractive to Berkshire Hathaway, which has been somewhat averse to commercial lines in the past. Buffett believes that the time is right to expand the company’s commercial insurance businesses as market trends appear to be favorable.