Berkshire Hathaway is “alleging damages of between $0.5 and $1bn”, Swiss Re said on page 73 of the third-quarter earnings statement it issued on 8 November, adding the claim was without merit.
Swiss Re and Berkshire Hathaway were not available to comment. Berkshire’s claim against Swiss Re was first reported by the Insurance Insider newspaper. Analysts at JP Morgan said Swiss Re would be able to meet dividend forecasts even if it had to pay Berkshire.
“Swiss Re’s capital is in our view strong enough to absorb this and still have the ability to raise the normal dividend and pay a special dividend too,” they wrote.
Swiss Re has met Berkshire to discuss the claim, and failure to resolve the dispute could lead to arbitration proceedings, the reinsurer said in its earnings statement in November. Swiss Re accepted an emergency $3.3bn loan from Berkshire in 2009 after losses on derivative investments during the financial crisis. That loan has since been repaid.