Berkshire Hathaway will reinsure AIG’s property insurance subsidiary.
AIG has secured a deal with Berkshire Hathaway to reinsure its property insurance subsidiary Lexington.
An announcement from AIG said that Berkshire Hathaway's National Indemnity Company will provide contingent property reinsurance cover for Lexington's property portfolio. However, no details of the transaction have yet been disclosed.
The deal is considered significant because it could help AIG's subsidiary retain business with major companies who require a top-band rating from their insurer. AIG's credit rating was cut to a single-A when its problems were announced, prompting some brokers to raise concerns over the placement of business. Meanwhile, Berkshire Hathaway has a triple-A rating.