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CEO of Berkshire's Gen Re to retire; Jain's role grows
[NEW YORK] General Re, one of Berkshire Hathaway Inc's largest insurance units, said chief executive officer Tad Montross is retiring, in a move that will expand the role of Ajit Jain, long viewed as a potential successor to Warren Buffett at Berkshire's helm.
Mr Montross, 60, will step down by year end, after serving as Gen Re's chairman and CEO since 2008, a spokeswoman for the Stamford, Connecticut-based reinsurer said.
His successor has not been named, but will report to Mr Jain, the spokeswoman said. Mr Montross, in contrast, reports to Mr Buffett.
The change adds to the duties of Mr Jain, 64, who has expanded the Berkshire reinsurance unit he oversees, Berkshire Hathaway Reinsurance Group, even as General Re has curbed underwriting amid increased competition.
Mr Montross' retirement was previously reported by The Insurance Insider.
General Re was beset by underwriting problems for years after Mr Buffett bought it in 1998 for roughly US$16 billion.
It has performed better in recent years, and Mr Buffett said in his annual shareholder letter in February it was now a "gem". Reinsurers provide protection for traditional insurers.
Berkshire owns some 90 businesses including energy companies, food and clothing companies, and a railroad, and well over US$100 billion in common stocks.
It generates power to invest and make acquisitions from "float", or the amount of insurance premiums collected before claims are paid.
General Re contributed US$18.6 billion of float to Berkshire's overall US$87.7 billion total as of year end, while Berkshire Hathaway Reinsurance contributed US$44.1 billion. A majority of the remainder came from the auto insurer Geico.
Mr Buffett's successor as Berkshire's CEO remains a mystery, though the 85-year-old has said the board of his Omaha, Nebraska-based conglomerate has internal candidates.
Investors also widely consider Greg Abel, 53, a potential successor. He leads the company's Berkshire Hathaway Energy unit, and last July joined the board of Kraft Heinz Co, the food company in which Berkshire owns a 26.8 per cent stake.
In his own letter to Berkshire shareholders last year, vice chairman Charlie Munger called Mr Jain and Mr Abel "world-leading".