Berkshire Hathaway has joined with Torus's existing backers First Reserve and Corsair to inject an estimated $80mn-$100mn into the global specialty insurer.According to broking sources, Berkshire's investment represents one part of a strategic relationship between the two businesses.
It is understood that Berkshire Hathaway will take an additional share of Torus's reinsurance spend in areas including aviation and offshore energy as part of the deal.
“We are delighted that Berkshire Hathaway has invested in Torus,” Torus Group CEO Clive Tobin said in a statement. “This is part of an expanding relationship with one of the most respected companies in our industry.”
Mr. Tobin said the investment affirmed the specialty insurer and reinsurer's global development goal.
Torus has substantially repositioned its business in the past two years. In September 2011, Torus said it would acquire Lloyd's of London syndicate 1301, which underwrites direct and facultative property, accident and health business. In December 2011, Torus acquired the renewal rights to CV Starr & Co.'s continental European business. Torus also sold its renewal rights of its property catastrophe reinsurance book of business and entered the U.S. surety market during 2011.
The investment in Torus enables Berkshire to extend its reach and increase premium volume, said Meyer Shields, Baltimore-based director at Stifel Nicolaus & Co.
“If Berkshire can get access to more premium volumes and they are expected to be profitable, then they have an interest in pursuing that,” Mr. Shields said. “For them, it less a strategic move than just a good opportunity.”