Daddy long tail

摘要

IT IS a niche market, but a big one, and it is increasingly dominated by Warren Buffett's Berkshire Hathaway. On January 20th its reinsurance subsidiary, National Indemnity Company (nico), agreed with American International Group (aig), a big insurer, to acquire excess losses on old insurance policies. In one of the largest such "retroactive reinsurance" deals ever announced, nico will be on the hook for four-fifths of all losses above $25bn, up to $2obn, in exchange for a payment of $9.8bn now. The deal comes just a few weeks after a similar deal giving up to $1.5bn of coverage to Hartford, another American insurance giant.