Published:
A.M. Best Places Ratings of Berkshire Hathaway Inc.'s Subsidiaries Under Review with Negative Implications
OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has placed the financial strength ratings (FSR) and
issuer credit ratings (ICR) of the domestic and international
property/casualty and life/health subsidiaries of Berkshire Hathaway
Inc. (BRK) (Omaha, NE) [NYSE: BRK.A and BRK.B] under review with
negative implications. Concurrently, A.M. Best has placed the FSRs of
A++ (Superior) and ICRs of "aaa" of National Indemnity Group (National
Indemnity) (Omaha, NE) and Government Employers Group (GEICO)
(Chevy Chase, MD) and their members under review with negative
implications. In addition, A.M. Best has placed the FSRs of A++
(Superior) and ICRs of "aa+" of General Re Group (Gen Re)
(Delaware) and its members under review with negative implications.
(Please see link below for a detailed listing of the companies and
ratings.)
These ratings actions follow the recent announcement that BRK intends
to acquire for $100 per share in cash and common stock the remaining
outstanding shares of Burlington Northern Santa Fe Corporation (BNSF) [NYSE:
BNI], which would increase BRK's holdings to 100%. This
transaction is valued at $44 billion and includes the assumption of $10
billion of BNSF debt.
The placing of the ratings under review reflects A.M. Best concerns
regarding the utilization of BRK's insurance and reinsurance operations
as a funding source for this transaction.
Additionally, A.M. Best is concerned with the liquidity and
concentration risk pertaining to a single large investment as a
substantial portion of BRK's portfolio, since the majority of BRK's
equity investments are held at the insurance and reinsurance entities.
A.M. Best will assess the under review status over the near term as more
details regarding the capitalization and liquidity of the insurance and
reinsurance operations is presented by management.
For a complete listing of Berkshire Hathaway Inc.'s domestic and
international property/casualty and life/health subsidiaries, FSRs, ICRs
and debt ratings, please visit www.ambest.com/press/110603berkshirehathaway.pdf.
The principal methodologies used in determining these ratings, including
any additional methodologies and factors that may have been considered,
can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals and
health care system providers. For more information, visit www.ambest.com.
A.M. Best Company
Analysts
Devin Inskeep, 908-439-2200, ext.
5449
devin.inskeep@ambest.com
or
Robert
DeRose, 908-439-2200, ext. 5453
robert.derose@ambest.com
or
Public
Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
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