Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.B) agreed to backstop as much as $6.5 billion of Liberty Mutual Holding Co.’s obligations tied to asbestos and workers’ compensation policies.
Liberty Mutual said in a statement today that it paid Omaha, Nebraska-based Berkshire’s National Indemnity Co. about $3 billion for the coverage.
Berkshire has taken on asbestos risk form insurers including CNA Financial Corp. and American International Group Inc. The deals give Buffett, 83, more funds to invest. The ceding companies limit their risk from policies sold years ago and simplify their operations.
“This agreement further strengthens our financial position as it eliminates a substantial source of uncertainty in these liabilities and allows us to focus on execution in our core businesses,” said David H. Long, chief executive officer of Boston-based Liberty Mutual, said in the statement.
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