Warren Buffett's Berkshire Hathaway Inc. is seeking up to $1 billion from Swiss Re AG in a dispute over a book of The dispute, first discussed by Mr. Buffett at Berkshire's annual meeting in May, centers around a group of term-life policies sold in the U.S. before 2004 and backed by Swiss Re. Mr. Buffett's company agreed to co-insure the policies in 2010, but by the end of 2011, Berkshire had recorded a pre-tax underwriting loss of $642 million on the contract.
Mr. Buffett and a representative from Swiss Re didn't immediately respond to requests for comment.
Berkshire has said that its early mortality assumptions for the policies were too optimistic. At the annual meeting, Mr. Buffett mentioned Berkshire had the ability to push Swiss Re to "re-price" the business, but warned that pushing for more premiums could result in "controversy."
Swiss Re said in a statement of its third-quarter earnings in early November that Berkshire had "served notice" under their co-insurance agreement about "specific and general allegations" concerning their co-insurance agreement. Berkshire was seeking damages between $500 million and $1 billion, the earnings statement said.
Swiss Re said in its earnings report that it was exchanging "proposals to resolve the dispute" with Berkshire, and that the disagreement could go to arbitration. Swiss Re said it believed Berkshire's claims "are without merit."