Ajit Jain, who helped build Berkshire Hathaway into a $200 billion firm by underwriting risks that others shunned, is hunting
for insurance-premium growth that his boss Warren Buffett says may be a thing
of the past, Bloomberg says.
The funds that Berkshire holds before paying out claims may
decline after swelling to more than $70 billion last year from $39 million in
1970, Buffett said in a February letter to shareholders. The billionaire has
used the premiums, called float, for acquisitions and investments to fuel
expansion over the past four decades. According to Buffett, Jain took the
letter as a challenge.
Jain wants me to “look like an idiot,” the billionaire said
May 5, drawing laughter from an audience of thousands of shareholders at the
company’s annual meeting in Omaha, Nebraska.
Berkshire’s increasing float has mirrored its climbing stock
price during the past quarter century and been used by investors to value the
firm. Buffett’s prediction highlights the dilemma facing Jain as he seeks new
long-term liabilities.
Buffett, 81, has praised Jain for his skill in selecting
risks at the right prices. The reinsurance chief accumulated $34 billion in
float since joining Berkshire in 1985, “a feat that no CEO of any other insurer
has come close to matching,” the billionaire wrote in the letter…..
Find out more at http://www.bloomberg.com/news/2012-05-23/buffett-s-idiot-challenge-seized-by-jain-in-premium-growth-hunt.html
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