Berkshire Hathaway Assurance

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Berkshire Hathaway Assurance
Private
IndustryInsurance
FoundedDecember 2007; 11 years ago (2007-12) in Omaha, Nebraska, United States
Key people
Warren Buffett
(President and CEO)
ParentBerkshire Hathaway

Berkshire Hathaway Assurance is a bond insurance company created by Berkshire Hathaway, Inc. in December 2007.[1][2][3]

History[edit]

Berkshire created this government bond insurance company in December 2007 to insure municipal and state bonds.[4][5] These type bonds are issued by local governments to finance public works projects such as schools, hospitals, roads, and sewer systems. Berkshire is not guaranteeing BHA[citation needed], thus opening itself to competition from any number of investors who could easily assemble the $5 billion capital. BHA began insurance operations in New York, with plans to move on to California, Puerto Rico, Texas, Illinois, and Florida.[6] On February 12, 2008, Warren Buffett announced a plan to add up to $5 billion in capital to BHA to enable it to provide reinsurance on municipal bonds currently guaranteed by Ambac, MBIA, and Financial Guaranty Insurance Company.[7] Buffet also announced BHA had closed its first deal to insure $50 million in debt for a 2% fee.[7] In 2014, Moody's said its credit rating was Aa1.[8][9] It also has a rating of AAA from S&P.[10]

References[edit]

  1. ^ Editorial, Reuters. "Company Profile | Reuters.com". U.S. Retrieved 20 January 2018.
  2. ^ "Berkshire Hathaway Assurance Corp: Company Profile". Bloomberg. Retrieved 20 January 2018.
  3. ^ Bajaj, Vikas (29 December 2007). "A Deal Maker With a Hot Hand Opens His Wallet". The New York Times. Retrieved 20 January 2018.
  4. ^ Crippen, Alex (22 February 2008). "Buffett's Berkshire Backs Over 100 Muni Bonds In Last Two Days". CNBC. Retrieved 20 January 2018.
  5. ^ "Buffett may build bond insurer with ING reinsurer - Dec. 28, 2007". 31 December 2007. Retrieved 20 January 2018.
  6. ^ Berkshire Hathaway to buy reinsurer, start bond insurer - MarketWatch
  7. ^ a b David Ellis (2008-02-12). "Buffett offers to help ailing bond insurers". Fortune. Archived from the original on 2011-06-05. Retrieved 2008-02-12.
  8. ^ "Moody's affirms Berkshire Hathaway Assurance Corporation's Aa1 insurance financial strength rating; outlook stable". Moodys.com. 24 January 2014. Retrieved 20 January 2018.
  9. ^ GmbH, finanzen.net. "Berkshire Hathaway Assurance Corporation -- Moody's affirms Berkshire Hathaway Assurance Corporation's Aa1 IFS rating; outlook stable". markets.businessinsider.com. Retrieved 20 January 2018.
  10. ^ Chang, Sue. "S&P rates Berkshire Hathaway Assurance Corp. 'AAA'". MarketWatch. Retrieved 20 January 2018.