Insurance Industry News from ProgramBusiness.comBerkshire Enters Med-Mal
A unit of Warren Buffett's Berkshire Hathaway Inc. has agreed to buy General Electric Co.'s Medical Protective Corp. unit, a malpractice insurer for doctors and dentists, for $825 million, its biggest purchase in nearly two years. Berkshire's National Indemnity Co. unit expects to complete the purchase from GE Insurance Solutions by June 30.
The purchase expands Omaha, Nebraska-based Berkshire's stable of insurance-related businesses, which include reinsurer General Re and auto insurer Geico. In a statement, Buffett called Medical Protective "the gold standard in protecting and defending the assets and reputations of healthcare providers." He said it has a strong track record even in difficult markets.
Berkshire ended 2004 with $43.4 billion of cash. Buffett at the annual meeting repeated his lament that he could not find enough assets worth buying. Fairfield, Connecticut-based GE said the sale is its latest step to reduce its exposure to the insurance sector.
106 year old Medical Protective, which is based in Fort Wayne, Indiana, underwrote $737 million in gross premiums last year and serves 75,000 doctors and dentists. Chief Executive Tim Kenesey and his management team will remain in place and the company's main operations will stay in Fort Wayne.
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