Berkshire Hathaway invests additional € 40m in Dublin-based European insurance company


Warren Buffett’s Berkshire Hathaway invested an additional 40 million euros in his Dublin-based European insurance company in February to boost its capital levels, according to the accounts just filed.

The financing was provided by new shares and increased its share capital to 176 million euros. The accounts also note that the Nebraska-based parent company invested € 20 million in the Irish company in 2020, also through new shares.

This financing was to “support the faster than expected growth of the company, including the associated start-up costs”, note its financial statements.

The Dublin operation was initially capitalized to the tune of 116 million euros as part of its authorization process before its IPO in 2019, to meet “regulatory capital requirements until December 2022, including the financing of initial net start-up losses. of the new business ”.

In terms of the impact of Covid-19, all of its offices are telecommuting and the board has assessed an “exposure” of 10 million euros to the pandemic.

“The board of directors has reassessed the various risks that have been increased by the pandemic and is convinced that the company is robust enough to withstand all the impacts,” notes the directors’ report.

The gross written premiums by the company amounted to 318.4 million euros, compared to 72.7 million euros in 2019. Its average loss ratio after reinsurance was 92%, which the accounts indicate to be in conformity. expectations to.

If we take into account investment and foreign exchange losses, the company recorded a pre-tax loss of 6.3 million euros, compared to 2.7 million euros in 2019. A tax charge to the Foreign exchange of 2.1 million euros brings the total losses for the year to 8.4 million euros.

Berkshire Hathaway European Insurance obtained regulatory approval from the Central Bank of Ireland in March 2019 and began trading that month. It is involved in general insurance underwriting and operates from branches in the UK, Germany, Spain, France and Italy.

Payroll

The company’s payroll almost tripled during the year to reach 10.5 million euros. Its 62 employees earned on average just over € 169,000 last year. The remuneration of the company’s executives amounts to € 524,000.

On January 1 of this year, the company’s employees in Ireland were transferred to a group-owned service company, “allowing them to more fully support the activities of the parent company”.

In April, the company exercised a break clause in its office lease in Dublin and was finalizing a five-year lease on another property that was due to begin in May.

The accounts indicate that this year should be one of “significant growth while integrating the disciplines of underwriting and claims within the branch network”. Most of the growth is expected to come from the UK branch.

Based in Omaha, Nebraska, Berkshire Hathaway is a multinational conglomerate led by Warren Buffett (90), who is considered one of the most successful investors in the world.

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