Berkshire Hathaway, owned by billionaire Warren Buffett, is investing in South Australia’s motor insurance industry.
SA state government treasurer Rob Lucas says Berkshire Hathaway’s Reinsurance Division will take over management of the Motor Accident Commission’s ‘back book’ of Compulsory Third Party (CTP) vehicle insurance claims.
The assets and liabilities from MAC will be transferred to Berkshire Hathaway’s National Indemnity Company, which means the government no longer has the responsibility of managing MAC’s liabilities.
“This is a significant coup for South Australia.
“Berkshire Hathaway’s reinsurance arm, National Indemnity Company, is the only reinsurance company in the world with the same AA+ credit rating as South Australia, offering SA policy claimants security over future claims, as well as excellent value for taxpayers who no longer bear the risk of movements in investments and claims outcomes.”
“Part of the arrangement will see $300 million of the reinsurance premium retained in South Australia – with at least $100 million retained for five years – for local funds management.”
Buffett says he is looking forward to the potential of growing his business in South Australia.
“We are thrilled to have agreed terms with South Australia to reinsure their auto liabilities, and we would love to find more opportunities to do business there.’’
MAC ceased writing new CTP insurance policies from July 1, 2016 but has remained responsible for managing a ‘back book’ of claims issued up to and including June 30, 2016.
