Berkshire Hathaway Reveals Secret Minority Stake in Insurer Chubb - Latest Global News

Berkshire Hathaway Reveals Secret Minority Stake in Insurer Chubb

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Berkshire Hathaway has quietly built a $6.7 billion position in New York-listed Chubb, one of the world’s largest insurance companies, underscoring Warren Buffett’s continued interest in financial services, according to regulatory filings released Wednesday.

Buffett’s conglomerate had acquired a large minority stake in Chubb since last year, but regulators allowed Berkshire to keep the position confidential. The filing reflected the company’s ownership interest in Chubb as of March 31. The insurance group has a market capitalization of more than $100 billion.

Chubb shares shot up more than 9 percent in after-hours trading.

Berkshire’s cash holdings have grown this year as Buffett has reduced his holdings in stocks like Apple that have boosted his portfolio in the past. Its cash balance reached a record $189 billion in the first quarter.

U.S. institutional investment managers managing more than $100 million are required to report their holdings in regulatory filings. However, you can request “confidential treatment” to omit certain positions.

Berkshire sought this exemption for at least one of its shares last year in regulatory filings that have since been amended to include its stake in Chubb.

Chubb, which offers products such as home, auto and liability insurance, has grown into one of the largest insurance companies in the world. Led by CEO Evan Greenberg, the company employs around 40,000 people.

In recent years, betting on insurance has come with its own risks. Chubb, for example, is one of the insurers responsible for the Key Bridge collapse in Baltimore in March.

The company is expected to send a $350 million payment to the U.S. state of Maryland within weeks, although the company will ultimately only be responsible for a portion of that payout.

Berkshire, which recently held its annual meeting, has been selling more than buying recently as Buffett has struggled to find worthwhile investments while the S&P 500 index continues to hit new highs on strong economic data.

The revelation of Berkshire’s stake in Chubb comes as the conglomerate prepares for a post-Buffett era. At the company’s annual meeting earlier this month, Buffett laid out a broad role for Greg Abel, who will make the final decision on the company’s investments.

Buffett, known as the Oracle of Omaha, has long been an investor in the financial services sector, including owning auto insurer Geico and holding stakes in global payments provider Mastercard and Bank of America.

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