Banking, finance, and taxes
Warren Buffett Helping AIG Unit (AIG, BRK-A)
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There was an announcement this morning from Lexington Insurance Company, a unit of American International Group (NYSE: AIG). The unit has said that effective September 15, 2008 it has arranged a Contingent Property Reinsurance cover from the Berkshire Hathaway Inc. (NYSE: BRK-A) unit called National Indemnity Company for Lexington’s Real Estate Portfolio, as well as policies having limits of $250 million or greater, policies with home/foreign exposure and the property sections of most of Lexington’s homeowners book. It noted that this reinsurance provides coverage under the same policy terms and conditions as issued by Lexington. In the event of a covered loss, Berkshire stands behind Lexington.
According to the release, it has $4.8 billion in policyholder surplusand “A” or higher financial strength ratings from rating agencies andnotes that Lexington is the largest U.S.-based surplus lines insurer.
Warren Buffett has said in recent days that he is interested in certain units or operations of AIG that might be up for grabs. Maybe vultures really do pick the easiest and sweetest meat from the carcass first. AIG shares are up 2% at $3.09 today.
Want to see everything else Mr. Buffett has been doing?
Jon C. Ogg
September 26, 2008
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