According to The Australian Financial Review today, Berkshire Hathaway Specialty Insurance is expected to shake up the commercial insurance market as it seeks to lure large corporate clients after opening the doors of its Sydney office on Monday.
The new Australian boss of Berkshire Hathaway Specialty Insurance, Chris Colahan, says BHSI will be "playing in the large corporate segment" of Australia's insurance market, which is dominated by players such as Insurance Australia Group, Suncorp Group, and QBE Insurance Group.
"We're targeting across Australia and to start with, as of today, we're launching in property, casualty, financial lines and marine cargo insurance in Australia," he told Fairfax Media.
"In the US we have other lines as well – healthcare, surety, home owners insurance and travel. We'll get into that if it makes sense to do so in the future," Mr Colahan said.
The entry of the Warren Buffett-linked BHSI will worry some of Australia's biggest commercial insurers amid a tough market peppered with increasing competition. Ross Curran, insurance analyst at Commonwealth Bank of Australia, said the brand alone "will open every broker door in the country".
"They [the brokers] would want Berkshire on their panel, because it's such a respected name globally," he said.
"It poses a problem for the domestic [insurers]," he said.
Mr Colahan said the group would "progressively move" into the small-to-medium enterprise and mid-market segments for clients. "The plan globally is to expand into markets where we think there's an opportunity to bring a new offering – we take a very long-term view on our strategy," he said.
"We plan to build Berkshire here to be a significant player over the long term in Australia – we're not here for a short duration."
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