Berkshire in $1 Billion Dispute With Swiss Re
Warren Buffett's Berkshire Hathaway conglomerate is claiming up to $1 billion from re-insurer Swiss Re, in a dispute over a life insurance deal they agreed in 2010.
Berkshire is "alleging damages of between $0.5 and $1 billion", Swiss Re said on page 73 of its third-quarter earnings statement it issued on November 8, adding the claim was without merit.
Swiss Re and Berkshire Hathaway were not available to comment.
Berkshire's claim against SwissRe was first reported by the Insurance Insider newspaper on Monday.
Swiss Re shares were up 0.8 percent in early Tuesday trading, in line with a European insurance sector index.
Analysts at JP Morgan said SwissRe would be able to meet dividend forecasts, even if it had to pay Berkshire Hathaway.
"Swiss Re's capital is in our view strong enough to absorb this and still have the ability to raise the normal dividend and pay a special dividend too," they wrote in a note.
Swiss Re has met Berkshire to discuss the claim, and failure to resolve the dispute could lead to arbitration proceedings, the re-insurer said in its earnings statement in November.
Swiss Re, the world's No.2 re-insurer, accepted an emergency $3.3 billion loan from Berkshire in 2009 after it incurred heavy losses on derivative investments during the financial crisis. That loan has since been repaid.
