Buffett backs Ireland in €700m deal with VHI
Published 25/07/2013 | 05:00
It is understood that he personally signed the mammoth contract with VHI.
The investor with the Midas touch has never done a deal in Ireland, and is notoriously reluctant to do business outside of the US.
His Berkshire Hathaway holding company will take over some of the risks of VHI in what is known as a re-insurance deal.
The agreement with the third-richest man in the world involves Berkshire Hathaway insuring some €700m of VHI claims. Effectively, some of VHI's health insurance claims are being laid-off with Berkshire, though customers will still deal with VHI.
The other three health insurers in the market all have re-insurance deals in place.
EU officials are pressing the Government to have VHI regulated by the Central Bank, but its reserves are too low just now. VHI will need at least €100m put into its reserves by the State, but it would have needed much more if it had not been for the re-insurance deal with Mr Buffett's company, which has saved taxpayers between €80m and €90m.
Berkshire Hathaway is valued by the stock market at $290bn (€219bn), making it one of the biggest companies in the world.
American Mr Buffett, who has a fortune estimated at $53bn (€40bn) and is known as the Wizard of Omaha, is committed to giving away most of his massive wealth to charity.