OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has placed the financial strength ratings (FSR) and issuer credit
ratings (ICR) of the domestic and international property/casualty and
life/health subsidiaries of Berkshire Hathaway Inc. (BRK) (Omaha, NE) [NYSE:
BRK.A and BRK.B] under review with negative implications. Concurrently, A.M.
Best has placed the FSRs of A++ (Superior) and ICRs of "aaa" of National
Indemnity Group (National Indemnity) (Omaha, NE) and Government Employers Group
(GEICO) (Chevy Chase, MD) and their members under review with negative
implications. In addition, A.M. Best has placed the FSRs of A++ (Superior) and
ICRs of "aa+" of General Re Group (Gen Re) (Delaware) and its members under
review with negative implications. (Please see link below for a detailed listing
of the companies and ratings.)
These ratings actions follow the recent announcement that BRKintends to acquire
for $100 per share in cash and common stock the remaining outstanding shares of
Burlington Northern Santa Fe Corporation (BNSF)[NYSE: BNI],which would increase
BRK`s holdings to 100%. This transaction is valued at $44 billion and includes
the assumption of $10 billion of BNSF debt.
The placing of the ratings under review reflects A.M. Best concerns regarding
the utilization of BRK`s insurance and reinsurance operations as a funding
source for this transaction.
Additionally, A.M. Best is concerned with the liquidity and concentration risk
pertaining to a single large investment as a substantial portion of BRK`s
portfolio, since the majority of BRK`s equity investments are held at the
insurance and reinsurance entities. A.M. Best will assess the under review
status over the near term as more details regarding the capitalization and
liquidity of the insurance and reinsurance operations is presented by
management.
For a complete listing of Berkshire Hathaway Inc.`s domestic and international
property/casualty and life/health subsidiaries, FSRs, ICRs and debt ratings,
please visit www.ambest.com/press/110603berkshirehathaway.pdf.
The principal methodologies used in determining these ratings, including any
additional methodologies and factors that may have been considered, can be found
at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating
organization dedicated to serving the financial and health care service
industries, including insurance companies, banks, hospitals and health care
system providers. For more information, visit www.ambest.com.
A.M. Best Company
Analysts
Devin Inskeep, 908-439-2200, ext. 5449
devin.inskeep@ambest.com
or
Robert DeRose, 908-439-2200, ext. 5453
robert.derose@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
Copyright Business Wire 2009
