Berkshire Hathaway to Buy Lloyd’s Agency

Warren Buffett’s Berkshire Hathaway Inc. agreed to buy CGNU’s Lloyd’s of London underwriting agency, allowing the billionaire investor to add to Berkshire’s global business of insuring ships for little or no cash upfront. The terms of Berkshire’s acquisition of Marlborough Underwriting Agency Ltd. weren’t disclosed. Berkshire didn’t return calls. London-based CGNU said it will take a charge of about $651 million to buy reinsurance from Berkshire to cover Marlborough claims that exceed its existing reserves. CGNU, which said it’s exiting the London property and casualty market, has about $1.73 billion in claims reserves related to Marlborough. For Buffett, the purchase expands an insurance business that includes Geico Corp., one of the biggest U.S. car insurers, and General and Cologne Re, the biggest U.S. reinsurer. It gains a sizable premium to invest and may not have to pay claims on the reinsurance for years. Analysts said Berkshire probably paid little for the agency.