Editorial Briefing
Warren Buffett has stepped down as chairman of Berkshire Hathaway, effective 18 September, after holding the role since 1965. His son Howard Buffett, a Berkshire director for 33 years, takes the chair. Warren becomes chairman emeritus and stays on the board, and Greg Abel continues as chief executive. In his letter to shareholders, Buffett wrote: “Father Time always wins. He has, however, been generous with me.”

Why It Matters
Through National Indemnity, Berkshire has been one of the largest buyers of retroactive risk the legacy market has had, from Equitas to Hartford’s A&E book. Buffett described the new arrangement this way: “Greg runs the company; Howard will guard its culture and values.” For cedants with long-dated Berkshire covers, the new chairman’s job is to protect the culture that shaped how those deals were written.

JDCC View
The timing is striking. In the same week Buffett handed over the chair, NICO commuted one of its best-known retroactive covers with Hartford (see Stop Press). A single commutation doesn’t mean Berkshire is leaving legacy business behind, but it’s worth watching how the next generation treats a business built on taking other people’s long-tail problems.

Editorial Briefing
The Bermuda Monetary Authority has published a consultation paper on the first phase of a resolution regime for failing insurers. It would cover domestic insurers, international groups for which the BMA is group supervisor, and potentially other commercial insurers whose failure could threaten financial stability. The BMA itself would act as resolution authority, with decision-making kept separate from its supervisory role. Responses are due by 15 December 2026.

Why It Matters
The regime’s four aims are protecting policyholders, preserving financial stability, safeguarding client assets and minimising public spending. The BMA will weigh these case by case rather than in a fixed order. The specific resolution powers and how they would work will come in later consultations, so this is the framework, not the full set of tools. It builds on the recovery planning rules the BMA introduced in 2024.

JDCC View
For the legacy market, resolution is where many run-off books come from. The long clean-up after Bermuda-domiciled R&Q, still being worked through (see Page 1), shows what happens without a clear framework. Watch the next consultation for portfolio transfer and run-off powers, because that’s where the legacy market could become part of the solution.

Editorial Briefing
Insurers and reinsurers in Asia Pacific are being urged to move their political violence and terrorism (PVT) models beyond historical loss data. Matt Harris, Global Head of Partnerships and Distribution at Synthetik Insurance Technologies, says geopolitical tension, civil unrest and rapid infrastructure development are changing the region’s PVT risk faster than past losses can show.

Why It Matters
Models built on historical losses assume the future will look like the past. In a region where exposures and threats are both growing quickly, that assumption can leave risk underpriced and reserves too thin.

JDCC View
Today’s pricing assumptions become tomorrow’s reserve adequacy question. If PVT books across the region are written on backward-looking models, the adverse development may surface years from now, when the business is already legacy.

Editorial Briefing
Hartford has commuted the asbestos and environmental adverse development cover it bought from Berkshire Hathaway’s National Indemnity in 2016. It received $1.12 billion in cash on 25 September, and the deal settles a confidential arbitration between the two.

Why It Matters
Commutations of adverse development covers are rare, especially at this size and with an arbitration settled as part of the deal. Hartford expects a $497 million pre-tax gain in the third quarter, with no effect on core earnings.

JDCC View
Hartford gets finality, and Berkshire exits a long-tail exposure and a dispute at the same time. Other cedants holding long-dated retroactive covers will be looking at what went wrong here. Full story: 6120.