THE BIG PAYBACK
AIG’s Bailout Repayments
($ billion)
$182.3
ORIGINAL
GOVERNMENT SUPPORT
$24.8
Primarily from AIA IPO, ALICO sale
$25
Primarily from sales of Star, Edison,
Nan Shan, ALICO and AIA
$20.3
from result of January 2011
recapitalization deal
$19.5
from proceeds from underlying
assets in Maiden Lane II
$15.3
from proceeds from underlying
assets in Maiden Lane III
$11.8
from sale of 407 million shares
$20.9
unused or expired balances
$44.7
OUTSTANDING BALANCE
*Treasury holds $35.7 billion in AIG stock.
FRBNY holds $9 billion interest in MLII | Source: AIG
E AMERICAN INTERNATIONAL GROUP’S remaining
debt to the U.S. government is about $45 billion after
paying an additional $1.5 billion to the U.S. Treasury
Department late last month—about a year ahead of
schedule. AIG says it used about $161 billion of the
$182 billion made available in a government bailout to prevent the company’s collapse in 2008. The
Treasury’s ownership of the insurance conglomerate
has been reduced to 70 percent.
BERKSHIRE HATHAWAY’S INFLUENCE
ON 2011 U.S. REINSURANCE INDUSTRY RESULTS
($ millions)
REINSURANCE
ASSOCIATION
OF AMERICA
GROUP
BERKSHIRE HATHAWAY COS.
GenRe
National
Indemnity
TOTAL
Berkshire
Hathaway
Group
Gross-Written
Premium
Net-Written Premium
Net-Underwriting
Gain (Loss)
Net-Investment
Income
Consolidated
Industry Surplus
Combined Ratio
$39,344
$26,390
($2,155)
$8,341
$108,412
107.2
$1,171
$1,162
$178
$432
$9,160
85.9
$5,617
$5,047
($739)
$5,456
$69,578
113.6
$6,788
$6,209
($561)
$5,888
$78,738
107.9
Source: Reinsurance Association of America/CR Market Strategies
E AS EARLY RESULTS FOR 2011 come in, the performance numbers for U.S. reinsurers
aren’t terrible, despite heavy claim activity throughout the year. The numbers, however,
were largely buoyed by one player’s results: Berkshire Hathaway. Reinsurance Association
of America companies produced net after-tax income of $6.6 billion for 2011—and much
of that figure came from the Berkshire Group, which reported $5.12 billion. Berkshire also
accounted for close to 71 percent of total investment income for the RAA group and represents almost 73 percent of total RAA capacity, measured by surplus.
TEXAS WORKERS’ COMPENSATION
Market Share (%)
1 Texas Mutual Insurance Co.
2 Liberty Mutual
3 Hartford Financial Services
4 Travelers Cos. Inc.
5 American International Group
6 Zurich Insurance Group Ltd.
7 ACE Ltd.
8 CNA Financial Corp.
9 Service Lloyds Insurance Co.
10 Chubb Corp.
2011
33.76
9. 24
7.44
7.43
6.92
5.73
3.43
2.60
2.23
1.96
2010
30.98
9.99
8.02
7.91
7.73
6. 25
2.15
2.61
2.26
2.07
Source: SNL Financial
E WITH WALMART—one of Texas’ largest private employers—dropping out of the state’s
Workers’ Compensation system in March, Texas’ unique approach to Workers’ Comp is
receiving renewed attention from both critics and supporters, according to The New York
Times and the Texas Tribune. Texas is the only state that allows employers of any size to
decline to carry state-regulated Workers’ Comp coverage, allowing businesses to develop
their own injury-benefit programs that critics say offer workers fewer benefits.
