* Deal expected to give Swiss Re a $100 mln first-quarter
* Berkshire payments may not cover future losses
* Berkshire's exposure to potential claims reduced by $450
ZURICH, March 28 Swiss Re has settled a dispute
with Berkshire Hathaway over a 2010 life reinsurance
deal and will receive a $610 million payment from U.S. tycoon
Warren Buffett's company, the Swiss reinsurer said on Thursday.
Under the original January 2010 deal, Swiss Re agreed to
transfer a U.S. life reinsurance contract to Berkshire for 1.3
billion Swiss francs ($1.36 billion), allowing it to reinvest
capital more profitably elsewhere.
That allowed Buffett's Berkshire to pocket premiums payable
under the contract, while taking responsibility for paying up to
$1.5 billion in potential claims.
Swiss Re said in a statement that Berkshire's exposure to
potential claims will be reduced to $1.05 billion from $1.5
billion and that the deal is expected to provide Swiss Re with
an initial first-quarter gain of $100 million.
The company said the effect of the agreement beyond the
first quarter would depend on the performance of the business
taken back from Berkshire as well as the business still covered
under the original deal.
"There is no assurance that the payments received from
Berkshire Hathaway will be sufficient to cover future losses,"
the Swiss group said in a statement.
Swiss Re said that, including the payments agreed in the
settlement, it had recovered a total of $815 million from
Berkshire to date.
In 2009 Buffett's Berkshire shored up the weakened Swiss Re
with a 3 billion Swiss franc investment after the Swiss group
wrote down twice that amount in toxic assets.
The group repaid the loan in 2011.
Earlier this year Swiss Re said the expiry of a quota share
agreement with Berkshire is expected to bring a significant rise
in premium income in 2013.