WARREN Buffett’s Berkshire Hathaway unveiled a US$6.7 billion stake in insurer Chubb, ending months of suspense over its mystery position in a financial firm, previously kept concealed in regulatory filings.
Berkshire disclosed the holding in a filing on Wednesday (May 15), reflecting its positions at the end of the first quarter.
The conglomerate has been building the stake since 2023 but it had not previously been reported because the Securities and Exchange Commission allowed Berkshire to keep it confidential. Still, separate quarterly filings reflected that Berkshire’s equity stakes in banks, insurance and finance companies were growing, while the firm was pulling back in other industries including consumer products.
“Millions of people follow what Buffett does,” said David Kass, a finance professor at the University of Maryland’s Robert H Smith School of Business, explaining why Berkshire wants confidentiality while it amasses big positions. “Warren Buffett would be more sensitive to the issue than others.”
Chubb stock jumped in after-hours trading, adding as much as 9.9 per cent.
Buffett’s Berkshire is deeply familiar with the insurance industry, owning a range of companies including Geico and National Indemnity. The billionaire investor has called Berkshire’s property-casualty insurance operation the “core” of the conglomerate, helping generate “float” that can then be reinvested.
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The conglomerate has also invested in other businesses in the insurance industry. Berkshire owns a stake in Aon, a major broker, and has previously bet on rivals including Marsh & McLennan Cos.
Cash pile
Chubb is one of the biggest property-casualty insurers in the US and operates in 54 countries globally. Its chief executive officer, Evan Greenberg, is the son of Maurice “Hank” Greenberg, who led American International Group for many years. Evan Greenberg built Chubb through the 2016 merger of Ace and Chubb, which created a massive insurer that covers a range of risks including cyber attacks and marine shipping.
Chubb insured Baltimore’s Francis Scott Key Bridge, which collapsed when a cargo ship slammed into it in late March. It’s reportedly set to pay out US$350 million to the state of Maryland.
Buffett already revealed a few recent changes to his company’s holdings at Berkshire’s annual meeting in Omaha earlier this month. It trimmed a stake in Apple to US$135.4 billion at the end of the first quarter, as the iPhone maker faces a range of struggles including an antitrust fine, sliding sales in China and a failed car project.
The billionaire investor heaped praise on the tech giant at the meeting – which Apple CEO Tim Cook attended – and said it will remain Berkshire’s largest investment barring any dramatic changes.
The cash pile at Berkshire reached a record US$189 billion at the end of March. Buffett said at the annual meeting that it was “a fair assumption” that it will hit US$200 billion by the end of this quarter.
Funds with more than US$100 million must file disclosures about their holdings within 45 days of the end of each quarter, providing a glimpse into the holdings of secretive money managers including hedge funds and large family offices. BLOOMBERG
