Berkshire’s National Indemnity Stake in Munich Re Exceeds 5%

February 23, 2010

Munich Re has released a statement that “National Indemnity Company, Omaha, USA, informed us in accordance with Section 21, para. 1 of the German Securities Trading Act (WpHG) that its share of the voting rights in our company had exceeded the threshold of 5 percent on 11 February 2010 and amounted to 5.097 percent (10,062,586 voting rights) as at this date. Of this, 1.583 percent (3,125,300 voting rights) is attributable to it in accordance with Section 22, para. 1 sentence 1 item 1 of the WpHG.”

At the end of January Munich Re posted a similar notice that Berkshire Hathaway’s stake in the world’s largest reinsurer had exceeded the three percent threshold [See IJ web site –
https://www.insurancejournal.com/news/international/2010/01/27/106899.htm ].

As Berkshire is the parent of National Indemnity, the question arises as to whether these shareholdings are in effect the same. Asked to clarify the situation, National Indemnity replied: “We do not comment on investment holdings beyond that which is required by regulation.”

Whatever the form of the holdings, it appears that Berkshire Hathaway has increased its stake in Munich Re significantly in less than a month. That’s strong evidence that Chairman Warren Buffett has a great deal of confidence in the P/C reinsurance industry.

In addition to its stake in Munich Re, Berkshire’s General Re is the third largest global reinsurer. The company also has stakes in Swiss Re, the second largest, as well as interests in the Lloyd’s reinsurance market, which is the fourth largest.

Source: Munich Re – www.munichre.com

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