Hank Greenberg has had the pulse of this business for more than 4 decades. He zigged when the market zagged. He bought reinsurance when the risk reward made sence. He bought at times when others were looking for cash flow they were saying damn underwriting profits, just give me your money.
He has been critisised for actually understanding timing, leverage, risk transfer as well as bold risk taking when the heard was running for their lives. He didn’t leak out billions and billions and billions (during the early 90’s) of losses and lost earnings for shareholders year in and year out. While doing so, most of these companies blamed society and past management for such things as; pollution woes, asbestoses, product liability, professional liability and medical malpractice. After all the winning, red ink and financial collapse many shutter up the doors or sold out a sinking ship that destroyed or crippled their successors.
He demanded underwriting profits and integrity in the underwrting process. He was more clever, nimble and plain smarter than the rest and many hated him for it and still do. Reinsurance is a finaciing mechanism intended to smooth results. It is a financial lever, it is banking, it is akin to derivitives, it is a tool to protect your company, policy holders and investors. If the SEC doesn’t know that, they don’t understand the business.
General Re and others have been offering “Finite Risk Transfer” and derivitive type transfer of risk for insurers since the late Sventies. Do the names Furguson and Milo ring a bell.
We shouldn’t expect the general publc to understnad what transpires in the mitigation and control of risk, but those of us in the business should look closely at ourselves and fight this aggression toward the control or management of risk through the financing of risk, better known as reinsurance.
When the smoke settles this circus will lead the parade to the doorstep of every sucessful, clever and not so clever insurer that used the varied mechanisims made availible by reinsurers for decades. Most industry naysayers will find they didn’t zig or zag when they should have. They didn’t have the pulse of the business. Hank surely owned that ability.
As an industry we should be looking very closly at what is going on here. It could cripple our ability to manage risk for the benefit of our companies, insureds and investors.
This is even bigger than Hank himself and that is BIG.
Mr. Buffett you cannot fool anyone. Your attorney’s discovered this 6 months after the original transaction through an audit. You along with your attorney’s have know about it since then and did nothing.
You cannot hide it from us nor do I find you a creditable witness. I see only a shallow person. You were hoping that no one would discover the past.
Your “findings” are silly and ignorant. His reputation, going back over 40 years, is one of absolute integrity. Indeed, it’s been the key to his success — people want to do deals with him because they know that he is a man of honor and honesty above all else.
I find whenever a person uses the term “silly and ignorant” they are scared to know the truth. Many times we need to ask the difficult questions even of those who have “integrity”.
Do your research and you will discover the cracks forming. Mr. Buffett has brought this upon himself.
Buy yourself a clue, Notes. This man is a acquaintance of my family and is one of the most honest businessmen out there. He has argued for more transparent accounting in business dealings not less. Do a little research before you post such ignorance.
I am witness to the fact that Mr. Buffett has literally preached integrity and honesty to all Berkshire Employees from Top to Bottom during his tenure. As Mr. Buffett has stated to Senior Management on many occasions, “It takes 20 years to build a reputation and only 20 seconds to destroy it. Do what’s right!”
I have worked for both and I would tie the words honest and integrity to WB at the top of a list of Fortune 500 execs. HG’s name would not be seen for many pages.
I knew that WB had integrity the day we were told that the retirement plan could not take on any new participants. That took guts. Look at United Airlines, selling their employees a bill of goods and destroying people’s retirements. I can’t think of another CEO who is willing to take the blame for mistakes and report it in their annual report. Most CEO’s, like many people sidestep the ultimate responsibility for their actions.
Buffett’s not perfect but he tries to do what is right.
Reading the WSJ, it appears ol’ Hank blew a gasket at a hastily prepared retirement dinner. He really sounds like he’s melting down. A proud man but he continued beyond his productive “shelf life.” He’s getting excellent advice from his attorneys to keep his mouth shut at this time. Time will tell what he knew or should have known. The shenanigans that went on at AIG and other insurers/reinsurers will continue to unfold. Pity the poor line and staff personnel who have given their all to the corporation then, have their financial futures adversely impacted by these cranky, conniving, selfish multi, multi millionaires.
Who covers AIG’s D&O Liability? …. I want to know.
Hank Greenberg has had the pulse of this business for more than 4 decades. He zigged when the market zagged. He bought reinsurance when the risk reward made sence. He bought at times when others were looking for cash flow they were saying damn underwriting profits, just give me your money.
He has been critisised for actually understanding timing, leverage, risk transfer as well as bold risk taking when the heard was running for their lives. He didn’t leak out billions and billions and billions (during the early 90’s) of losses and lost earnings for shareholders year in and year out. While doing so, most of these companies blamed society and past management for such things as; pollution woes, asbestoses, product liability, professional liability and medical malpractice. After all the winning, red ink and financial collapse many shutter up the doors or sold out a sinking ship that destroyed or crippled their successors.
He demanded underwriting profits and integrity in the underwrting process. He was more clever, nimble and plain smarter than the rest and many hated him for it and still do. Reinsurance is a finaciing mechanism intended to smooth results. It is a financial lever, it is banking, it is akin to derivitives, it is a tool to protect your company, policy holders and investors. If the SEC doesn’t know that, they don’t understand the business.
General Re and others have been offering “Finite Risk Transfer” and derivitive type transfer of risk for insurers since the late Sventies. Do the names Furguson and Milo ring a bell.
We shouldn’t expect the general publc to understnad what transpires in the mitigation and control of risk, but those of us in the business should look closely at ourselves and fight this aggression toward the control or management of risk through the financing of risk, better known as reinsurance.
When the smoke settles this circus will lead the parade to the doorstep of every sucessful, clever and not so clever insurer that used the varied mechanisims made availible by reinsurers for decades. Most industry naysayers will find they didn’t zig or zag when they should have. They didn’t have the pulse of the business. Hank surely owned that ability.
As an industry we should be looking very closly at what is going on here. It could cripple our ability to manage risk for the benefit of our companies, insureds and investors.
This is even bigger than Hank himself and that is BIG.
Mr. Buffett you cannot fool anyone. Your attorney’s discovered this 6 months after the original transaction through an audit. You along with your attorney’s have know about it since then and did nothing.
You cannot hide it from us nor do I find you a creditable witness. I see only a shallow person. You were hoping that no one would discover the past.
Your “findings” are silly and ignorant. His reputation, going back over 40 years, is one of absolute integrity. Indeed, it’s been the key to his success — people want to do deals with him because they know that he is a man of honor and honesty above all else.
Yoda out…
Yoda,
I find whenever a person uses the term “silly and ignorant” they are scared to know the truth. Many times we need to ask the difficult questions even of those who have “integrity”.
Do your research and you will discover the cracks forming. Mr. Buffett has brought this upon himself.
Buy yourself a clue, Notes. This man is a acquaintance of my family and is one of the most honest businessmen out there. He has argued for more transparent accounting in business dealings not less. Do a little research before you post such ignorance.
Notes sez: I find whenever a person uses the term “silly and ignorant” they are scared to know the truth.
Yoda responds: That’s two posts and two faulty findings. You’re batting 1.000 bud!
Yoda out…
I am witness to the fact that Mr. Buffett has literally preached integrity and honesty to all Berkshire Employees from Top to Bottom during his tenure. As Mr. Buffett has stated to Senior Management on many occasions, “It takes 20 years to build a reputation and only 20 seconds to destroy it. Do what’s right!”
Lisa,
I believe Mr. Buffett knew your grandfather… why did you not respond to Bill regarding the side letter issue???
Ummm….because I didn’t see it. Provide a link and I’ll be happy to respond to it.
I have worked for both and I would tie the words honest and integrity to WB at the top of a list of Fortune 500 execs. HG’s name would not be seen for many pages.
I knew that WB had integrity the day we were told that the retirement plan could not take on any new participants. That took guts. Look at United Airlines, selling their employees a bill of goods and destroying people’s retirements. I can’t think of another CEO who is willing to take the blame for mistakes and report it in their annual report. Most CEO’s, like many people sidestep the ultimate responsibility for their actions.
Buffett’s not perfect but he tries to do what is right.
Reading the WSJ, it appears ol’ Hank blew a gasket at a hastily prepared retirement dinner. He really sounds like he’s melting down. A proud man but he continued beyond his productive “shelf life.” He’s getting excellent advice from his attorneys to keep his mouth shut at this time. Time will tell what he knew or should have known. The shenanigans that went on at AIG and other insurers/reinsurers will continue to unfold. Pity the poor line and staff personnel who have given their all to the corporation then, have their financial futures adversely impacted by these cranky, conniving, selfish multi, multi millionaires.