The Senate Finance Committee approved by a bipartisan voice vote Thursday a bill to renew a set of tax extenders worth $85 billion that have expired or will expire at year-end.
The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, renews more than 50 extenders for two years, and includes the acceptance of a wind-energy production tax credit that originally was omitted from the bill.
Among others renewed were section 179 expensing, bonus depreciation, the research and development tax credit and the deduction for mortgage insurance premiums.
“When I joined the Finance committee nearly a decade ago, I couldn’t possibly have imagined chairing Congress’ fifteenth time renewing the stop-and-go tax cuts called ‘extenders,’” Wyden said during his opening remarks at the markup.
“Many of these extenders are well-intentioned and ought to be permanent. Their stop-and-go nature obviously contributes to the lack of certainty and predictability America needs to create more family-wage jobs. It doesn’t have to be this way.”
5 Best Supermarket Stocks To Buy Right Now: ACE Ltd (ACE)
ACE Ltd (ACE) is a holding company of the ACE Group of Companies. ACE is a global insurance and reinsurance organization, serving the needs of customers in more than 170 countries. It offers commercial insurance products and service offerings, such as risk management programs, loss control and engineering and complex claims management. It also provides specialized insurance products ranging from Directors & Officers (D&O) and professional liability to various specialty-casualty and umbrella and excess casualty lines to niche areas, such as aviation and energy. In addition, it supplies personal accident, supplemental health, and life insurance to individuals in select countries. ACE operates in four business segments: Insurance-North American, Insurance-Overseas General, Global Reinsurance, and Life. In December 2011, it acquired Rio Guayas Compania de Seguros y Reaseguros, a general insurance company in Ecuador. On November 30, 2011, it acquired Penn Millers Holding Corporation (PMHC). On April 1, 2011, it acquired the operations of New York Life�� Hong Kong. On February 1, 2011, ACE acquired New York Life�� Korea operations. In September 2012, it acquired 80% of PT Asuransi Jaya Proteksi in Indonesia.
Insurance-North American
ACE�� Insurance-North American segment consists of the operations in the United States, Canada, and Bermuda. This segment includes the operations of ACE USA (including ACE Canada), ACE Bermuda, ACE Commercial Risk Services, ACE Private Risk Services, ACE Westchester, ACE Agriculture, and various run-off operations. During the year ended December 31, 2011, Insurance-North American segment accounted for 45% of its consolidated net premiums earned. During 2011, ACE USA represented approximately 49% of Insurance-North American�� net premiums earned.
ACE USA is the North American retail operating division which provides a broad array of P&C, A&H, and risk management products and services to a diverse group of commercial and non-commercia! l enterprises and consumers. ACE Bermuda provides commercial insurance products on an excess basis mainly to a global client base, covering exposures that are generally low in frequency and high in severity. ACE Commercial Risk Services addresses the insurance needs of small to mid-sized businesses in North America by delivering an array of specialty product solutions for targeted industries. ACE Private Risk Services provides personal lines coverages for high net worth individuals and families in North America.
ACE Westchester specializes in the North American wholesale distribution of excess and surplus P&C, environmental, professional and inland marine products. ACE Agriculture provides Multi-Peril Crop Insurance and crop/hail insurance protection to customers throughout the United States and Canada through Rain and Hail and Agribusiness insurance through Penn Millers Insurance Company. The run-off operations include Brandywine, Commercial Insurance Services, residual market workers��compensation business, pools and syndicates not attributable to a single business group, and other exited lines of business. Run-off operations do not actively sell insurance products, but are responsible for the management of existing policies and settlement of related claims.
Insurance-Overseas General
During 2011, ACE�� Insurance- Overseas General segment accounted for 37% of its consolidated net premiums earned. Insurance-Overseas General segment consists of ACE International, its global retail insurance operations, the wholesale insurance business of ACE Global Markets, and the international A&H and life business of Combined Insurance. ACE International is its retail business serving local companies and insureds to large multinationals outside the United States, Bermuda, and Canada. ACE Global Markets, its London-based excess and surplus lines business, includes Lloyd�� of London (Lloyd��) Syndicate 2488 (Syndicate 2488). ACE provides a fund at Lloyd�� to support und! erwriting! by Syndicate 2488, which is managed by ACE Underwriting Agencies Limited. The reinsurance operation of ACE Global Markets is included in the Global Reinsurance segment.
Property insurance products include traditional commercial fire coverage, as well as energy industry-related, construction, and other technical coverages. Principal casualty products are commercial primary and excess casualty, environmental, marine and general liability. ACE International specialty coverages include D&O professional indemnity, energy, aviation, political risk and specialty personal lines products. The A&H operations primarily offer personal accident and supplemental medical products to meet the insurance needs of individuals and groups outside of United States insurance markets. ACE International�� personal lines operations provide specialty products and services designed to meet the needs of specific target markets and include property damage, auto, homeowners, and personal liability.
Global Reinsurance
During 2011, ACE�� Global Reinsurance segment, which accounted for 7% of its consolidated net premiums earned. Global Reinsurance segment represents ACE�� reinsurance operations comprising ACE Tempest Re Bermuda, ACE Tempest Re USA, ACE Tempest Re International, and ACE Tempest Re Canada. The Global Reinsurance segment also includes ACE Global Markets��reinsurance operations. Global Reinsurance markets its reinsurance products worldwide under the ACE Tempest Re brand name and provides a range of coverage to a diverse array of primary P&C companies. ACE Tempest Re Bermuda principally provides property catastrophe reinsurance, on an excess of loss basis globally to insurers of commercial and personal property. ACE Tempest Re Bermuda underwrites reinsurance principally on an excess of loss basis, meaning that its exposure only arises after the ceding company�� accumulated losses have exceeded the attachment point of the reinsurance policy. ACE Tempest Re Bermuda also writes ! other typ! es of reinsurance on a limited basis for selected clients.
ACE Tempest Re USA writes all lines of traditional and specialty P&C reinsurance for the United States market, principally on a treaty basis, with a focus on writing property per risk and casualty reinsurance. ACE Tempest Re USA underwrites reinsurance on both a proportional and excess of loss basis. ACE Tempest Re International provides P&C treaty reinsurance to insurance companies worldwide. ACE Tempest Re Canada offers an array of traditional and specialty P&C reinsurance to the Canadian market, including casualty, property risk and property catastrophe.
Life
During 2011, ACE�� Life accounted for 11% of 2011 consolidated net premiums earned. Life includes ACE�� international life operations (ACE Life), ACE Tempest Life Re (ACE Life Re), and the North American supplemental A&H and life business of Combined Insurance. ACE Life provides individual life and group insurance, including Egypt, Indonesia, Taiwan, Thailand, Vietnam, the United Arab Emirates, throughout Latin America, selectively in Europe, as well as China through a non-consolidated joint venture insurance company.
ACE Life offers a portfolio of protection and savings products, including whole life, endowment plans, individual term life, group term life, group medical, personal accident, universal life, and unit linked contracts. ACE Life sells to consumers through a range of distribution channels, including agency, bancassurance, brokers, and direct to consumer marketing. ACE Life Re helps clients (ceding companies) manage mortality, morbidity, and lapse risks embedded in their books of business. ACE Life Re�� business is a Bermuda-based operation, which provides reinsurance to primary life insurers, focusing on guarantees included in certain fixed and variable annuity products and also on more traditional mortality reinsurance protection. ACE Life Re is a United States-based traditional life reinsurance operation. Combined I! nsurance ! distributes specialty individual accident and supplemental health and life insurance products targeted to middle income consumers in the United States and Canada.
Advisors' Opinion:- [By Ben Levisohn]
For the past several years, Berkshire has contrasted its own cost-free float provided by profitable underwriting against the industry�� (unimpressive) tendency to lose money on underwriting while generating net returns from investment income. So far, so good. Less edifying, though, is the repeated contrast of Berkshire�� track record of profitability to State Farm��…even though, as a mutual company, State Farm�� profitability goals are inherently different from for-profit insurers like Berkshire. It�� true that through year-end 2013, Berkshire�� underwriters have ��ow operated at an underwriting profit for eleven consecutive years,��but so have ACE (ACE), American Financial (AFG),� AmTrust Financial (AFSI), Arch Capital (ACGL), Chubb (CB), HCC (HCC), Progressive (PGR), RLI (RLI), and W.R. Berkley (WRB), any or all of whom provide a more meaningful comparison than contrasting Berkshire�� results to a company that�� not out to produce a profit in the first place.
- [By Ben Levisohn]
JPMorgan Chase (JPM) and American Express (AXP) rose 2% and 2.1%, respectively, as financial stocks gained on speculation that the jobless claims data would spur the Federal Reserve to taper sooner rather than later, while Ace Ltd.�(ACE) rose 3.8%. �General Motors�(GM) gained 1.1% after the US government said it could sell the last of its shares by year-end. On the downside, Target (TGT) fell 3.5% after reporting earnings that missed analyst expectations.
Hot Insurance Stocks To Watch For 2014: Assurant Inc (AIZ)
Assurant, Inc. (Assurant) is a provider of specialized insurance products and related services in North America and select worldwide markets. The Company operates in four segments: Assurant Solutions, Assurant Specialty Property, Assurant Health, and Assurant Employee Benefits. The products offered by the segments include warranties and service contracts, pre-funded funeral insurance, lender-placed homeowners insurance, manufactured housing homeowners insurance, individual health and small employer group health insurance, group dental, disability, and life insurance and employee-funded voluntary benefits. On June 21, 2011, the Company acquired the SureDeposit business, the provider of security deposit alternatives to the multifamily housing industry. In October 2013, FirstService Corporation completed the sale of its Field Asset Services business to Assurant, Inc. In October 2013, Assurant Inc acquired Lifestyle Services Group Ltd.
Assurant Solutions
Assurant Solutions targets three product areas: domestic and international extended service contracts (ESC) and warranties, preneed life insurance, and international credit insurance. Through partnerships with retailers and original equipment manufacturers, the Company underwrites and provides administrative services for ESC and warranties. These contracts provide consumers with coverage on cellular phones, personal computers, consumer electronics, appliances, automobiles and recreational vehicles, protecting them from certain covered losses. It pays the cost of repairing or replacing customers��property in the event of mechanical breakdown, accidental damage, and casualty losses such as theft, fire, and water damage. The Company provides administration, claims handling and customer service. Preneed life insurance allows individuals to prepay for a funeral in a single payment or in multiple payments over a fixed number of years. The insurance policy proceeds are used to address funeral costs at death. These products are only so! ld in the United States and Canada and are generally structured as whole life insurance policies in the United States and annuity products in Canada.
The Company�� credit insurance products offer protection from life events and uncertainties that arise in purchasing and borrowing transactions. Credit insurance programs offer consumers the option to protect a credit card balance or installment loan in the event of death, involuntary unemployment or disability, and are generally available to all consumers without the underwriting restrictions that apply to term life insurance. In addition to the domestic market, the Company operates in Canada, the United Kingdom, Argentina, Brazil, Puerto Rico, Chile, Germany, Spain, Italy, Mexico and China. In these markets, it primarily sells ESC and credit insurance products through agreements with financial institutions, retailers and wireless service providers.
Assurant Specialty Property
The product line within Assurant Specialty Property is homeowners insurance, consisting principally of fire and dwelling hazard insurance offered through its lender-placed programs. The lender-placed program provides collateral protection to lenders, mortgage servicers and investors in mortgaged properties in the event that a homeowner does not maintain insurance on a mortgaged dwelling. Lender-placed insurance coverage is not limited to the outstanding loan balance; it provides structural coverage, similar to that of a standard homeowners policy. The policy is based on the replacement cost of the property and ensures that a home can be repaired or rebuilt completely in the event of damage. The Company also provides insurance to some of its clients on properties that have been foreclosed and are being managed by its clients. This type of insurance is called Real Estate Owned (REO) insurance. Lender-placed and voluntary manufactured housing insurance: Manufactured housing insurance is offered on a lender-placed and voluntary basis. Lender-plac! ed insura! nce is issued after an insurance tracking process similar to that described above. The tracking is performed by Assurant Specialty Property using an insurance tracking administration system, or by the lenders themselves.
The Company has developed products in adjacent and emerging markets, such as the lender-placed flood and mandatory insurance rental markets. It also acts as an administrator for the United States Government under the voluntary National Flood Insurance Program, for which it earns a fee for collecting premiums and processing claims. This business is 100% reinsured to the Federal Government. The Company offers its manufactured housing insurance programs primarily through manufactured housing lenders and retailers, along with independent specialty agents. The independent specialty agents distribute flood products and miscellaneous specialty property products. Multi-family housing products are distributed primarily through property management companies and affinity marketing partners. Its lender-placed homeowners insurance program and certain of its manufactured home products are not underwritten on an individual policy basis.
Assurant Health
Assurant Health offers medical insurance and short-term medical insurance to individuals and families in the medical insurance market. Its products are offered with different plan options. Assurant Health also offers medical insurance to small employer groups. The Company�� medical insurance products are sold to individuals, primarily between the ages of 18 and 64, and their families, who do not have employer-sponsored coverage. It offers a variety of benefit plans at different price points. The Company�� group medical insurance is primarily sold to small companies with 2 to 50 employees, although larger employer coverage is available. The Company�� health insurance products are principally marketed through a network of independent agents. It also markets through a variety of national account relationships ! and direc! t distribution channels. In addition, the Company markets its products through North Star Marketing, a wholly owned affiliate.
Assurant Employee Benefits
The Company offers group disability, dental, vision, life and supplemental worksite products, as well as individual dental products. The group products are offered with funding options ranging from fully employer-paid to fully employee-paid (voluntary). In addition, it reinsures disability and life products through its wholly owned subsidiary, Disability Reinsurance Management Services, Inc. (DRMS). Group disability insurance provides partial replacement of lost earnings for insured employees who become disabled, as defined by their plan provisions. The Company�� products include both short- and long-term disability coverage options. It also reinsures disability policies written by other carriers through its DRMS subsidiary.
Dental benefit plans provide funding for necessary or elective dental care. Customers may select a traditional indemnity arrangement, a preferred provider organization (PPO) arrangement, or a prepaid or managed care arrangement. Coverage is subject to deductibles, coinsurance and annual or lifetime maximums. In a prepaid plan, members must use participating dentists in order to receive benefits. Assurant Employee Benefits owns and operates Dental Health Alliance, L.L.C., a dental PPO network. The Company also has an agreement with Aetna that allows it to use Aetna�� Dental Access network. Fully insured vision coverage is offered through its agreement with Vision Service Plan, Inc., a supplier of vision insurance. The Company�� plans cover eye exams, glasses and contact lenses, and are sold in combination with one or more of its other products.
Group term life insurance provided through the workplace provides benefits in the event of death. The Company also provides accidental death and dismemberment (AD&D) insurance. Insurance consists primarily of renewable term life insu! rance wit! h the amount of coverage provided being either a flat amount, a multiple of the employee�� earnings, or a combination of the two. It also reinsures life policies written by other carriers through DRMS. In addition, the Company provides group critical illness, cancer, accident, and gap insurance. These products are paid for by the employee through payroll deduction, and the employee is enrolled in the coverage(s) at the worksite. Its products and services are distributed through a group sales force located in 34 offices near metropolitan areas.
Advisors' Opinion:- [By Rich Duprey]
Specialized insurance products provider�Assurant (NYSE: AIZ ) announced yesterday its third-quarter dividend of $0.25 per share, the same rate it paid last quarter after raising the payout 19%, from $0.21 per share.
- [By Whitney Kisling]
Assurant (AIZ), the insurer of foreclosed homes, has climbed 72 percent in 2013, extending the rally since the bull market started to 245 percent. Per-share profit the last two quarters exceeded analyst projections. Earnings growth at the New York-based company will slow to 1 percent next year and 5 percent in 2015, when sales contract, according to estimates compiled by Bloomberg.
Hot Insurance Stocks To Watch For 2014: Aflac Incorporated(AFL)
Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus (Aflac), provides supplemental health and life insurance. The company offers various voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans, and annuities in Japan. It also provides loss-of-income products, such as life and short-term disability plans; and products designed to protect individuals from depletion of assets, which comprise hospital indemnity, fixed-benefit dental, vision care, accident, cancer, critical illness/critical care, and hospital intensive care plans in the United States. The company sells its products through sales associates and brokers, affiliated corporate agencies, independent corporate agencies, and individual agencies. Aflac Incorporated was founded in 1955 and is headquartered in Columbus, Georgia.
Advisors' Opinion:- [By Chuck Saletta]
And in what was probably the fastest transition from strength to struggle for the portfolio, supplemental insurance giant Aflac (NYSE: AFL ) reported weak earnings just after being picked. Still, the company's solid balance sheet, reasonable valuation, and very strong dividend history made it a solid business to own, in spite of those short-term worries.
- [By Dan Burrows]
Stocks to Sell: Aflac (AFL)
Click to Enlarge Source: Source: Charts courtesy of YCharts
The Aflac (AFL) duck would probably cough up a hairball if it knew how bad June was shaping up to be for AFL stock. Shares in the supplemental insurance company have lost more than 8% so far this year, and the technicals say there’s more pain to come.
- [By Tim McAleenan Jr.]
The next country Mankiw cites for needed exposure is Japan. The most straightforward way for an American stock investor to use common stocks to get Japanese exposure is to buy shares of Aflac (AFL). When you read the balance sheet, you will see that Aflac is really a Japanese company camouflaged as an American insurance company. Check out this part from the company's latest news release:
- [By Brian Pacampara]
What: Shares of Aflac (NYSE: AFL ) climbed 1.5% this morning after FBR Capital upgraded the life insurer from market perform to outperform.
Hot Insurance Stocks To Watch For 2014: American Financial Group Inc (AFG)
American Financial Group, Inc. (AFG), incorporated on July 1, 1997, is a holding company, which through subsidiaries, is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses and in the sale of traditional fixed and fixed-indexed annuities in the individual, bank and education markets. The Company�� segment includes: property and casualty insurance, annuity, run-off long-term care and life and other. In August 2012, the Company sold its Medicare supplement and critical illness businesses.
Property and Casualty Insurance
AFG�� specialty property and casualty insurance operations consist of approximately 30 niche insurance businesses offering a range of commercial coverages. Under the property and transportation segment, inland and ocean marine provides coverage primarily for builders' risk, contractors' equipment, property, motor truck cargo, marine cargo, boat dealers, marina operators/dealers and excursion vessels. The agriculture-related business provides federally reinsured multi-peril crop (allied lines) insurance covering perils, as well as crop-hail, equine mortality and other coverages for operating farms/ranches and agribusiness operations on a nationwide basis. The commercial automobile business provides coverage for vehicles (such as buses and trucks) in a range of businesses, including the moving and storage and transportation industries, and a specialized physical damage product for the trucking industry.
Under the specialty casualty segment, executive and professional liability business markets coverage for directors and officers of businesses and non-profit organizations, errors and omissions, and provides non-United States medical malpractice insurance. The umbrella and excess liability business provides higher layer liability coverage in excess of primary layers. The excess and surplus business provides liability, umbrella and excess coverage for risks, using rates and forms that ge! nerally do not have to be approved by state insurance regulators. The general liability business provides coverage for contractor-related businesses, energy development and production risks, and environmental liability risks. The targeted programs includes coverage (primarily liability and property) for social service agencies, leisure, entertainment and non-profit organizations, customized solutions for other targeted markets and alternative risk programs using agency captives. The Workers��Compensation provides coverage for prescribed benefits payable to employees who are injured on the job.
Under the specialty financial segment, fidelity and surety provides fidelity and crime coverage for government, mercantile and financial institutions and surety coverage for various types of contractors and public and private corporations. Lease and loan services provides coverage for insurance risk management programs for lending and leasing institutions, including equipment leasing and collateral and mortgage protection.
Annuity Operations
AFG�� annuity operations is engaged primarily in the sale of fixed and fixed-indexed annuities in the individual, bank and education markets through independent producers and also sell annuities through direct relationships with banks. Annuities are long-term retirement saving instruments that benefit from income accruing on a tax-deferred basis. The issuer of the annuity collects premiums, credits interest or earnings on the policy and pays out a benefit upon death, surrender or annuitization. Single premium annuities are generally issued in exchange for a one-time lump-sum premium payment. Certain annuities, primarily in the education market, have premium payments that are flexible in both amount and timing as determined by the policyholder and are generally made through payroll deductions.
A fixed-indexed annuity provides policyholders with the opportunity to receive a crediting rate tied, in part, to the performanc! e of an e! xisting market index (generally the S&P 500) while protecting against the related downside risk through a guarantee of principal (excluding surrender charges, market value adjustments, and certain benefit charges). AFG purchases call options designed to substantially offset the effect of the index participation in the liabilities associated with fixed-indexed annuities.
Run-off long-term care and life
The majority of AFG�� investment in its run-off long-term care and life operations (including 100% of its long-term care business) is in the following subsidiaries: United Teacher Associates Insurance Company, Continental General Insurance Company and Manhattan National Life Insurance Company. United Teacher Associates Insurance Company�� products include Long-term care, life and annuities. Continental General Insurance Company�� products include Long-term care, life and annuities.
Other Operations
Through subsidiaries, AFG is engaged in a range of other operations, including commercial real estate operations in Cincinnati (office buildings and The Cincinnatian Hotel), New Orleans (Le Pavillon Hotel), Whitefield, New Hampshire (Mountain View Grand Resort), Chesapeake Bay (Skipjack Cove Yachting Resort and Bay Bridge Marina), Charleston (Charleston Harbor Resort and Marina), Palm Beach (Sailfish Marina and Resort), Florida City, Florida (retail commercial development) and apartments in Louisville and Pittsburgh.
Advisors' Opinion:- [By Ben Levisohn]
Shares of American International Group have dropped 1.7% to $49.67 at 1:19 p.m. today, while American Financial Group (AFG) has, dropped 0.2% to $57.23, HCC Insurance (HCC) is little changed at $45.12,�Travelers (TRV) has dipped 0.1% to $83.52 and Chubb (CB) is off 0.1% at $86.58.
- [By Ben Levisohn]
For the past several years, Berkshire has contrasted its own cost-free float provided by profitable underwriting against the industry�� (unimpressive) tendency to lose money on underwriting while generating net returns from investment income. So far, so good. Less edifying, though, is the repeated contrast of Berkshire�� track record of profitability to State Farm��…even though, as a mutual company, State Farm�� profitability goals are inherently different from for-profit insurers like Berkshire. It�� true that through year-end 2013, Berkshire�� underwriters have ��ow operated at an underwriting profit for eleven consecutive years,��but so have ACE (ACE), American Financial (AFG),� AmTrust Financial (AFSI), Arch Capital (ACGL), Chubb (CB), HCC (HCC), Progressive (PGR), RLI (RLI), and W.R. Berkley (WRB), any or all of whom provide a more meaningful comparison than contrasting Berkshire�� results to a company that�� not out to produce a profit in the first place.
Hot Insurance Stocks To Watch For 2014: Berkshire Hathaway Inc (BRK.B)
Berkshire Hathaway Inc. (Berkshire) is a holding company owning subsidiaries engaged in a number of diverse business activities. The Company is engaged in insurance businesses conducted on both a primary basis and a reinsurance basis. Berkshire also owns and operates a number of other businesses engaged in a variety of activities. On December 30, 2011, Medical Protective Corporation (MedPro) completed the acquisition of 100% of the Princeton Insurance Company, a professional liability insurer for healthcare providers based in Princeton, New Jersey. During the year ended December 31, 2011, Acme Building Brands (Acme) acquired the assets of Jenkins Brick Company, the brick manufacturer in Alabama. In September 2011, Berkshire acquired The Lubrizol Corporation (Lubrizol). In June 2011, the Company acquired Wesco Financial Corporation. In June 2012, Media General, Inc. sold 63 daily and weekly newspapers to World Media Enterprises, Inc., a subsidiary of Berkshire. In July 2012, Berkshire�� The Lubrizol Corporation acquired Lipotec SA.
Insurance and Reinsurance Businesses
Berkshire�� insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance entities. Berkshire�� insurance businesses provide insurance and reinsurance of property and casualty risks world-wide and also reinsure life, accident and health risks world-wide. Berkshire�� insurance underwriting operations are consisted of the sub-groups, including GEICO and its subsidiaries, General Re and its subsidiaries, Berkshire Hathaway Reinsurance Group and Berkshire Hathaway Primary Group. GEICO insurance subsidiaries include Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company and GEICO Casualty Company. These companies primarily offers private passenger automobile insurance to individuals in all 50 states and the District of Columbia. In addition, GEICO insures motorcycles, all-terrain vehicles, recreational vehicles and s! mall commercial fleets and acts as an agent for other insurers who offer homeowners, boat and life insurance to individuals. GEICO markets its policies primarily through direct response methods in which applications for insurance are submitted directly to the companies through the Internet or by telephone.
General Re Corporation (General Re) is the holding company of General Reinsurance Corporation (GRC) and its subsidiaries and affiliates. GRC�� subsidiaries include General Reinsurance AG, a international reinsurer based in Germany. General Re subsidiaries conduct business activities globally in 51 cities and provide insurance and reinsurance coverages throughout the world. General Re provides property/casualty insurance and reinsurance, life/health reinsurance and other reinsurance intermediary and risk management, underwriting management and investment management services.
Property/Casualty Reinsurance
General Re�� property/casualty reinsurance business in North America is conducted through GRC. Property/casualty operations in North America are also conducted through 16 branch offices in the United States and Canada. Reinsurance activities are marketed directly to clients without involving a broker or intermediary. General Re�� property/casualty business in North America also includes specialty insurers (primarily the General Star and Genesis companies domiciled in Connecticut and Ohio). These specialty insurers underwrite primarily liability and workers��compensation coverages on an excess and surplus basis and excess insurance for self-insured programs. General Re�� international property/casualty reinsurance business operations are conducted through internationally-based subsidiaries on a direct basis (through General Reinsurance AG, as well as several other General Re subsidiaries in 25 countries) and through brokers (primarily through Faraday, which owns the managing agent of Syndicate 435 at Lloyd�� of London and provides capacity and particip! ates in 1! 00% of the results of Syndicate 435).
Life/Health Reinsurance
General Re�� North American and international life, health, long-term care and disability reinsurance coverages are written on an individual and group basis. Most of this business is written on a proportional treaty basis, with the exception of the United States group health and disability business which is predominately written on an excess treaty basis. Lesser amounts of life and disability business are written on a facultative basis. The life/health business is marketed on a direct basis. The Berkshire Hathaway Reinsurance Group (BHRG) operates from offices located in Stamford, Connecticut. Business activities are conducted through a group of subsidiary companies, led by National Indemnity Company (NICO) and Columbia Insurance Company (Columbia). BHRG provides principally excess and quota-share reinsurance to other property and casualty insurers and reinsurers. BHRG�� underwriting activities also include life reinsurance and life annuity business written through Berkshire Hathaway Life Insurance Company of Nebraska and financial guaranty insurance written through Berkshire Hathaway Assurance Corporation.
BHRG writes catastrophe excess-of-loss treaty reinsurance contracts. BHRG also writes individual policies for primarily large or otherwise unusual discrete risks on both an excess direct and facultative reinsurance basis, referred to as individual risk, which includes policies covering terrorism, natural catastrophe and aviation risks. A catastrophe excess policy provides protection to the counterparty from the accumulation of primarily property losses arising from a single loss event or series of related events. Catastrophe and individual risk policies may provide amounts of indemnification per contract and a single loss event may produce losses under a number of contracts. BHRG also underwrites traditional non-catastrophe insurance and reinsurance coverages, referred to as multi-line property/c! asualty b! usiness.
The Berkshire Hathaway Primary Group is a collection of primary insurance operations that provide a variety of insurance coverages to insureds located principally in the United States. NICO and certain affiliates underwrite motor vehicle and general liability insurance to commercial enterprises on both an admitted and excess and surplus basis. This business is written nationwide primarily through insurance agents and brokers and is based in Omaha, Nebraska. U.S. Investment Corporation (USIC), through its three subsidiaries led by United States Liability Insurance Company, is a specialty insurer that underwrites commercial, professional and personal lines of insurance on an admitted and excess and surplus basis. Policies are marketed in all 50 states and the District of Columbia through wholesale and retail insurance agents. USIC companies underwrite and market 109 distinct specialty property and casualty insurance products. Medical Protective Corporation (MedPro) is based in Fort Wayne, Indiana. Through its subsidiary, the Medical Protective Company, MedPro is engaged in primary medical professional liability coverage and risk solutions to physicians, dentists, other healthcare providers and healthcare facilities.
Railroad Business
Through BNSF Railway, BNSF operates a railroad network in North America with approximately 32,000 route miles of track (excluding multiple main tracks, yard tracks and sidings) in 28 states and two Canadian provinces as of December 31, 2011. BNSF owns approximately 23,000 route miles, including easements, and operates on approximately 9,000 route miles of trackage rights that permit BNSF to operate its trains with its crews over other railroads��tracks. As of December 31, 2011, the total BNSF Railway system, including single and multiple main tracks, yard tracks and sidings, consisted of approximately 50,000 operated miles of track, all of which are owned by or held under easement by BNSF except for approximately 10,000 route! miles op! erated under trackage rights.
BNSF is based in Fort Worth, Texas, and through BNSF Railway Company operates railroad systems in North America. In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the country, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the country, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. Over half of the freight revenues of BNSF are covered by contractual agreements of varying durations. BNSF�� primary routes, including trackage rights, allow it to access cities and ports in the western and southern United States as well as parts of Canada and Mexico. In addition to cities and ports, BNSF efficiently serves many smaller markets by working closely with approximately 200 shortline partners. BNSF has also entered into marketing agreements with other rail carriers, expanding the marketing reach for each railroad and their customers.
Utilities and Energy Businesses
MidAmerican�� businesses are managed as separate operating units. MidAmerican�� domestic regulated energy interests are comprised of two regulated utility companies serving more than three million retail customers and two interstate natural gas pipeline companies with approximately 16,600 miles of pipeline and a design capacity of approximately 7.7 billion cubic feet of natural gas per day. Its United Kingdom electricity distribution subsidiaries serve about 3.9 million electricity end-users. In addition, MidAmerican�� interests include a diversified portfolio of domestic independent power projects, a hydroelectric facility in the Philippines and residential real estate brokerage firm in the United States.
PacifiCorp is a regulated electric utility compa! ny headqu! artered in Oregon, serving regulated retail electric customers in portions of Utah, Oregon, Wyoming, Washington, Idaho and California. The combined service territory�� diverse regional economy ranges from rural, agricultural and mining areas to urban, manufacturing and government service centers. As a vertically integrated electric utility, PacifiCorp owns approximately 10,600 net megawatts of generation capacity. MidAmerican Energy Company (MEC) is a regulated electric and natural gas utility company headquartered in Iowa, serving regulated retail electric and natural gas customers primarily in Iowa and also in portions of Illinois, South Dakota and Nebraska. MEC has a diverse customer base consisting of residential, agricultural and a variety of commercial and industrial customer groups. In addition to retail sales and natural gas transportation, MEC sells regulated electricity to markets operated by regional transmission organizations and regulated electricity and natural gas to other utilities and market participants on a wholesale basis and sells non-regulated electricity and natural gas services in deregulated markets. As a vertically integrated electric and gas utility, MEC owns approximately 7,000 net megawatts of generation capacity.
The natural gas pipelines consist of Northern Natural Gas Company (Northern Natural) and Kern River Gas Transmission Company (Kern River). Northern Natural is based in Nebraska and owns interstate natural gas pipeline systems in the United States reaching from southern Texas to Michigan�� Upper Peninsula. Northern Natural�� pipeline system consists of approximately 14,900 miles of natural gas pipelines. Northern Natural has access to supplies from mid-continent basin and provides transportation services to utilities and numerous other customers. Northern Natural also operates three underground natural gas storage facilities and two liquefied natural gas storage peaking units.
Kern River is based in Utah and owns an interstate natural! gas pipe! line system that consists of approximately 1,700 miles and extends from the supply areas in the Rocky Mountains to consuming markets in Utah, Nevada and California. Kern River transports natural gas for electric utilities and natural gas distribution utilities, oil and natural gas companies or affiliates of such companies, electricity generating companies, energy marketing and trading companies, and financial institutions. The United Kingdom utilities consist of Northern Powergrid (Northeast) Limited (Northern Powergrid (Northeast)) and Northern Powergrid (Yorkshire) plc (Northern Powergrid (Yorkshire)), which own a substantial United Kingdom electricity distribution network that delivers electricity to end-users in northeast England in an area covering approximately 10,000 square miles. The distribution companies primarily charge supply companies regulated tariffs for the use of electrical infrastructure. MidAmerican also owns HomeServices of America, Inc. (HomeServices), a full-service residential real estate brokerage firm in the United States. HomeServices also offers integrated real estate services, including mortgage originations through a joint venture, title and closing services, property and casualty insurance, home warranties, relocation services and other home-related services. It operates under 22 residential real estate brand names with over 14,000 sales associates and in nearly 300 brokerage offices in 20 states.
Manufacturing, Service and Retailing Businesses
Berkshire�� numerous and diverse manufacturing, service and retailing businesses. Marmon consists of approximately 140 manufacturing and service businesses that operate independently within eleven diverse, stand-alone business sectors. These sectors are Building Wire, Crane Services, Distribution Services, Engineered Wire and Cable, Flow Products, Food Service Equipment, Highway Technologies, Industrial Products, Retail Store Fixtures, Transportation Services and Engineered Products and Water Treatment.
!Building Wire, providing copper electrical building wire for residential, commercial and industrial construction. Crane Services provides the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets. Distribution Services, supplying specialty metal pipe and tubing, bar and sheet products to markets including construction, industrial, aerospace and many others. Engineered Wire & Cable, providing electrical and electronic wire and cable for energy related markets and other industries. Flow Products is producing copper tube for the plumbing, heating, ventilation, and air conditioning (HVAC), refrigeration, and industrial markets. Food Service Equipment is supplying commercial food preparation equipment for restaurants and shopping carts for retail stores. Highway Technologies, primarily serving the heavy-duty highway transportation industry with trailers, fifth wheel coupling devices and undercarriage products such as brake parts and suspension systems, and also serving the light vehicle aftermarket with clutches and related products.
Industrial Products, consisting of metal fasteners for the building, furniture, cabinetry, industrial and other markets, gloves for industrial markets, portable lighting equipment for mining and safety markets, overhead electrification equipment for mass transit systems, custom-machined brass, aluminum and copper forgings for the construction, valve and other industries, brass fittings and valves for commercial and industrial applications, and drawn aluminum tubing and extruded aluminum shapes for the construction, automotive, appliance, medical and other markets . Retail Store Fixtures, providing shelving and other merchandising displays and related services for retail stores worldwide. Transportation Services & Engineered Products, including manufacturing, leasing and maintenance of railroad tank cars, leasing of intermodal tank containers, in-plant rail services, manufacturing of bi-modal railcar movers, wheel, axle ! and gear ! sets for light rail transit and gear products for locomotives, manufacturing of steel tank heads, and services, equipment and technology for processing and distributing sulfur. Water Treatment, equipment including residential water softening, purification and refrigeration filtration systems, treatment systems for industrial markets including power generation, oil and gas, chemical, and pulp and paper, gear drives for irrigation systems and cooling towers, and air-cooled heat exchangers. Marmon operates approximately 300 manufacturing, distribution and service facilities that are primarily located in North America, Europe and China, and employs more than 16,000 people worldwide.
McLane Company, Inc. (McLane) provides wholesale distribution and logistics services in all 50 states and internationally in Brazil to customers that include discount retailers, convenience stores, wholesale clubs, quick service restaurants, drug stores and military bases. Operations are divided into five business units: grocery distribution, foodservice distribution, beverage distribution, international logistics and software development. McLane�� foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service restaurant industry. Operations are conducted through 18 facilities in 16 states. The foodservice distribution unit services more than 20,000 chain restaurants nationwide.
Other Manufacturing, Other Service and Retailing Businesses
Berkshire�� apparel manufacturing businesses include manufacturers of a variety of clothing and footwear. Businesses engaged in the manufacture and distribution of clothing products include Fruit of the Loom, Inc. (Fruit), Russell Brands, LLC (Russell), Vanity Fair Brands, LP (VFB), Garan and Fechheimer Brothers. Berkshire�� footwear businesses include H.H. Brown Shoe Group, Justin Brands and Brooks Athletic. Fruit, Russell and VFB (together FOL) is primarily a vertically integrated manufacturer and distributor of ba! sic appar! el, underwear and athletic apparel and products. Products, under the Fruit of the Loomand JERZEES labels are primarily sold in the mass merchandise and wholesale markets. In the VFB product line, Vassarette, Bestformand Curvationare sold in the mass merchandise market, while Vanity Fairand Lily of Franceproducts are sold in the mid-tier chains and department stores. FOL also markets and sells athletic uniforms, apparel, sports equipment and balls to team dealers; college licensed tee shirts and fleecewear to college bookstores and mid-tier merchants; and athletic apparel, sports equipment and balls to sporting goods retailers under the Russell Athleticand Spaldingbrands. Additionally, Spaldingmarkets and sells balls in the mass merchandise market and dollar store channel. During the year ended December, 31, 2011, approximately 30% of FOL�� sales were to Wal-Mart. FOL generally performs its own spinning, knitting, cloth finishing, cutting, sewing and packaging.
Garan designs, manufactures, imports and sells apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademark Garanimalsand private labels of its customers. Garan also licenses its registered trademark Garanimalsto independent third parties. Garan conducts its business through operating subsidiaries located in the United States, Central America and Asia. Substantially all of Garan�� products are sold through its distribution centers in the United States to national chain stores, department stores and specialty stores. In 2011, over 90% of Garan�� sales were to Wal-Mart. Fechheimer Brothers manufactures, distributes and sells uniforms, principally for the public service and safety markets, including police, fire, postal and military markets. Fechheimer Brothers is based in Cincinnati, Ohio.
Justin Brands and H.H. Brown Shoe Group manufacture and distribute work, rugged outdoor and casual shoes and western-style footwear under a number of brand names, including! Justin, ! Tony Lama, Nocona, Chippewas, Born, Sofft, Carolina, Double-H Boots, Corcoran, Matterhornand Kork-Ease. Brooks Athletic markets and sells running footwear to specialty retailers under Brooksbrand. In 2011, Brooksachieved #1 market share in footwear with specialty retailers. A volume of the shoes sold by Berkshire�� shoe businesses are manufactured or purchased from sources outside the United States. Products are principally sold in the United States through a variety of channels including department stores, footwear chains, specialty stores, catalogs and the Internet, as well as through Company-owned retail stores.
Acme manufactures and distributes clay bricks (Acme Brickand Jenkins Brick), concrete block (Featherlite) and cut limestone (Texas Quarries). In addition, Acme distributes a number of other building products of other manufacturers, including glass block, floor and wall tile and other masonry products. Acme also sells ceramic floor and wall tile, as well as marble, granite and other stones through its subsidiary, American Tile and Stone. Products are sold primarily in the South Central and South Eastern United States through Company-operated sales offices. Acme distributes products primarily to homebuilders and masonry and general contractors.
Benjamin Moore & Co. (Benjamin Moore) is a formulator, manufacturer and retailer of a range of architectural coatings, available principally in the United States and Canada. Products include water-thinnable and solvent-thinnable general purpose coatings (paints, stains and clear finishes) for use by the general public, contractors and industrial and commercial users. Products are marketed under various registered brand names, including Regal, Superspec, Moorcraft, Moorgard, Aura, Nattura, ben, Coronado Paint, Insl-xand Lenmar.
Benjamin Moore and its manufacturing subsidiaries rely primarily on an independent dealer network for the distribution of its products. Its distribution network includes approximately 100! Company-! owned stores as well as over 4,500 third party retailers representing over 10,300 storefronts in the United States and Canada. Benjamin Moore�� Company-owned stores represent several multiple-outlet and stand-alone retailers in various parts of the United States and Canada serving primarily contractors and general consumers. The independent retailer channel offers an array of products including Benjamin Mooreand Insl-xbrands and other competitor coatings, wallcoverings, window treatments and sundries. Benjamin Moore also has three color stations located in regional malls that serve as brand marketing tools. In addition to the independent retailer channel, Benjamin Moore has recently begun to sell direct to the consumer through e-commerce sites and its customer care program, which includes national accounts and government agencies.
Johns Manville (JM) is a manufacturer and marketer of products for building insulation, mechanical insulation, commercial roofing and roof insulation, as well as fibers and nonwovens for commercial, industrial and residential applications. JM serves markets that include aerospace, automotive and transportation, air handling, appliance, HVAC, pipe and equipment filtration, waterproofing, building, flooring, interiors and wind energy. Fiber glass is the basic material in a majority of JM�� products, although JM also manufactures a portion of its products with other materials to satisfy the broader needs of its customers. JM regards its patents and licenses as valuable, however it does not consider any of its businesses to be materially dependent on any single patent or license. JM is headquartered in Denver, Colorado, and operates 40 manufacturing facilities in North America, Europe and China and conducts research and development at several other facilities. JM sells its products through a variety of channels, including contractors, distributors, retailers, manufacturers and fabricators.
MiTek is a provider of engineered connector products, engine! ering sof! tware and services and computer-driven manufacturing machinery to the truss fabrication segment of the building components industry. Primary customers are truss fabricators who manufacture pre-fabricated roof and floor trusses and wall panels for the residential building market, as well as the light commercial and institutional construction industry. MiTek also participates in the light gauge steel framing market under the Ultra-Spanname, manufactures and markets assembly line machinery used by the lead acid battery industry, manufactures and markets a line of masonry connector products and manufactures and markets air handling systems used in commercial building. MiTek operates on six continents with sales into approximately 90 countries. MiTek has 34 manufacturing facilities located in eleven countries and 45 sales/engineering offices located in 17 countries.
The Shaw Industries Group, Inc. (Shaw) is a carpet manufacturer based on both revenue and volume of production. Shaw designs and manufactures over 3,000 styles of tufted carpet, tufted and woven rugs, laminate and wood flooring for residential and commercial use under about 30 brand and trade names and under certain private labels. Shaw also provides installation services and sells ceramic and vinyl tile along with sheet vinyl. Shaw�� manufacturing operations are fully integrated from the processing of raw materials used to make fiber through the finishing of carpet. Shaw�� carpet, rugs and hard surface products are sold in a broad range of prices, patterns, colors and textures.
Shaw products are sold wholesale to over 40,000 retailers, distributors and commercial users throughout the United States, Canada and Mexico and are also exported to various overseas markets. Shaw�� wholesale products are marketed domestically by over 2,000 salaried and commissioned sales personnel directly to retailers and distributors and to national accounts. Shaw�� 10 carpet full-service distribution facilities, three hard surface an! d two rug! full-service distribution facilities and 24 redistribution centers, along with centralized management information systems, enable it to provide prompt efficient delivery of its products to both its retail customers and wholesale distributors.
Berkshire acquired an 80% interest in IMC International Metalworking Companies B.V. (IMC B.V.). Through its subsidiaries, IMC B.V. is a multinational manufacturers of consumable precision carbide metal cutting tools for applications in a range of industrial end markets under the brand names ISCAR, TaeguTec, Ingersoll, Tungaloy, Unitac, UOP It.te.diand Outiltec. IMC B.V.�� manufacturing facilities are located in Israel, United States, Germany, Italy, France, Switzerland, South Korea, China, India, Japan and Brazil. IMC B.V. has five primary product lines: milling tools, gripping tools, turning/thread tools, drilling tools and tooling. Forest River, Inc. (Forest River) is a manufacturer of recreational vehicles, utility, cargo and office trailers, buses and pontoon boats, headquartered in Elkhart, Indiana. Its products are sold in the United States and Canada through an independent dealer network.
Scott Fetzer companies are a diversified group of 20 businesses that manufacture and distribute a variety of products for residential, industrial and institutional use. The two of these businesses are Kirby home cleaning systems and Campbell Hausfeld products. Albecca Inc. (Albecca), headquartered in Norcross, Georgia, does business primarily under the Larson-Juhlname. Albecca designs, manufactures and distributes a complete line of branded custom framing products, including wood and metal moulding, matboard, foamboard, glass, equipment and other framing supplies in the United States, Canada and 15 countries outside of North America. CTB International Corp. is a designer, manufacturer and marketer of systems used in the grain industry and in the production of poultry, hogs and eggs.
Lubrizol is a specialty chemical company that pro! duces and! supplies technologies for the global transportation, industrial and consumer markets. Lubrizol operates two business sectors: Lubrizol Additives, which includes engine, driveline and industrial additive products and Lubrizol Advanced Materials, which includes personal and home care, engineered polymer and performance coating products. FlightSafety International Inc.(FlightSafety) is engaged primarily in the business of providing high technology training to operators of aircraft. FlightSafety�� training activities include advanced training for pilots of business and commercial aircraft; aircrew training for military and other government personnel; aircraft maintenance technician training; flight attendant and aircraft dispatcher training, and ab-initio (primary) pilot training to qualify individuals for private and commercial pilots��licenses. FlightSafety also develops classroom instructional systems and materials for use in its training business and for sale to others.
NetJets Inc. (NJ) is a provider of fractional ownership programs for general aviation aircraft. TTI, Inc. (TTI) is a global specialty distributor of passive, interconnect, electromechanical and discrete components used by customers in the manufacturing and assembling of electronic products. Business Wire provides electronic dissemination of full-text news releases daily to the media, online services and databases and the global investment community in 150 countries and 45 languages. Berkshire�� retailing businesses principally consist of several independently managed home furnishings and jewelry operations. The home furnishings businesses are the Nebraska Furniture Mart (NFM), R.C. Willey Home Furnishings (R.C. Willey), Star Furniture Company (Star) and Jordan�� Furniture, Inc. (Jordan��). NFM, R.C. Willey, Star and Jordan�� each offer a wide selection of furniture, bedding and accessories. In addition, NFM and R.C. Willey sell a line of household appliances, electronics, computers and other home furnishings. N! FM, R.C. ! Willey, Star and Jordan�� also offer customer financing to complement their retail operations. An important feature of each of these businesses is their ability to control costs and to produce high business volume by offering value to their customers.
NFM operates its business from two retail complexes with almost one million square feet of retail space and sizable warehouse and administrative facilities in Omaha, Nebraska and Kansas City, Kansas. NFM is a furniture retailer in each of its markets. NFM also owns Homemakers Furniture located in Des Moines, Iowa, which has approximately 215,000 square feet of retail space. R.C. Willey, based in Salt Lake City, Utah, is a home furnishings retailer in the Intermountain West region of the United States. R.C. Willey operates 11 retail stores, two retail clearance facilities and three distribution centers. Borsheim Jewelry Company, Inc. (Borsheims) operates from a single store located in Omaha, Nebraska. Borsheims is a high volume retailer of jewelry, watches, crystal, china, stemware, flatware, gifts and collectibles. Helzberg�� Diamond Shops, Inc. (Helzberg), based in North Kansas City, Missouri, operates a chain of 233 retail jewelry stores in 37 states, which includes approximately 550,000 square feet of retail space. Most of Helzberg�� stores are located in malls, lifestyle centers or power strip centers, and all stores operate under the name Helzberg Diamonds. The Ben Bridge Corporation (Ben Bridge Jeweler), based in Seattle, Washington, operates a chain of 70 upscale retail jewelry stores located in 11 states that are primarily in the Western United States. Three of its locations are concept stores that sell only PANDORA jewelry.
Finance and Financial Products
Clayton Homes, Inc. (Clayton) is a vertically integrated manufactured housing company. At December 31, 2011, Clayton operated 33 manufacturing plants in 12 states. Clayton�� homes are marketed in 48 states through a network of 1,333 retailers, inclu! ding 333 ! Company-owned home centers. Financing is offered through its finance subsidiaries to purchasers of Clayton�� manufactured homes as well as those purchasing homes from selected independent retailers. XTRA Corporation (XTRA), headquartered in St. Louis, Missouri, is a transportation equipment lessor operating under the XTRA Leasebrand name. XTRA manages a diverse fleet of approximately 83,000 units located at 63 facilities throughout the United States and two facilities in Canada. The fleet includes over-the-road and storage traile
Advisors' Opinion:- [By Holly LaFon]
A: The stock market is a market of individual stocks that represent fractional ownership interests in real businesses. The key to investment success is first and foremost to identify individual, highly durable businesses and then have the discipline to buy them when prices are attractive and the risk/reward trade-off is compelling. We invest in what we understand, continuing to pour over the universe of businesses within our many circles of competence that meet our management, capital allocation, business model, and valuation criteria. Some areas that we believe offer the greatest opportunity in terms of prospective returns include:
Global market leaders such as Nike (NKE), Colgate-Palmolive (CL) and Philip Morris International (PM) that are beneficiaries of a growing global middle class and consumer culture. The global wealth effect, particularly in developing economies, is a real and very powerful force that should serve as a tailwind for these types of global brands over the long term. Well-managed financial services companies with true franchise value due to the success of their particular products or brand that have the ability and management prowess to build market share over time in a highly fragmented marketplace. Wells Fargo and Berkshire Hathaway (BRK.B) are representative examples in this category. The depth of the recent financial crisis is well known. What is less understood is that certain market leaders used the downturn to dramatically strengthen their capital base and significantly grow their market share at the expense of weaker competitors. Certain health care-related businesses such as UnitedHealth Group and Laboratory Corporation of America that stand to benefit from growing health care spending by aging populations around the world. Workhorse technology companies such as Texas Instruments (TXN), Microsoft (MSFT) and Google that are market leaders with durable competitive moats and that also offer an attractive risk/reward proposition at - [By John Emerson]
Open any Berkshire Hathaway (BRK.A)(BRK.B) annual letter and the first thing you see will be a listing of the yearly gains in the book value per share of BRK.A from 1965 to the present year. At the bottom of the year-by-year synopsis lies the compounded annual growth rate (CAGR) of those gains in equity. Later in the article I will show the mathematical formula for calculating those compound gains.
Hot Insurance Stocks To Watch For 2014: Aspen Insurance Holdings Ltd (AHL)
Aspen Insurance Holdings Limited (Aspen Holdings), incorporated on May 23, 2002, is a holding company. The Company conducts insurance and reinsurance business through its subsidiaries in three jurisdictions: Aspen Insurance UK Limited (Aspen U.K.) and Aspen Underwriting Limited (AUL), corporate member of Syndicate 4711 at Lloyd�� of London (United Kingdom), Aspen Bermuda Limited (Aspen Bermuda) and Aspen Specialty Insurance Company (Aspen Specialty) and Aspen American Insurance Company (AAIC). Aspen U.K. also has branches in Paris (France), Zurich (Switzerland), Dublin (Ireland), Cologne (Germany), Singapore, Australia and Canada. It operates in the global markets for property and casualty insurance and reinsurance. It manages its insurance and reinsurance businesses as two distinct underwriting segments, Aspen Insurance and Aspen Reinsurance (Aspen Re), to serve its global customer base. Its insurance segment is consisted of property, casualty, marine, energy and transportation insurance and financial and professional lines insurance. Its reinsurance segment is consisted of property reinsurance (catastrophe and other), casualty reinsurance and specialty reinsurance. In April 2013, the reinsurance segment of the Company announced the formation of a new division, Aspen Capital Markets.
In the Company�� insurance segment, property, casualty and financial and professional lines insurance business is written in the London Market through Aspen U.K. and in the United States through Aspen Specialty and AAIC. Its marine, energy and transportation insurance business is written through Aspen U.K. and AUL, which is the corporate member of Syndicate 4711 at Lloyd�� of London (Lloyd��), managed by Aspen Managing Agency Limited (AMAL). It also writes casualty business through AUL. In reinsurance, property reinsurance business is assumed by Aspen Bermuda and Aspen U.K. The property reinsurance business written in the United States is written by Aspen Re America and ARA-CA as reinsurance intermed! iaries with offices in Connecticut, Illinois, Florida, New York, Georgia and California. The business written in the United States is produced by Aspen Re America.
Reinsurance
The Company�� reinsurance segment consists of property catastrophe reinsurance, other property reinsurance (risk excess, pro rata, risk solutions and facultative), casualty reinsurance (the United States treaty, international treaty and global facultative) and specialty reinsurance (credit and surety, structured, agriculture and specialty). Property catastrophe reinsurance is written on a treaty excess of loss basis where it provides protection to an insurer for an agreed portion of the total losses from a single event in excess of a specified loss amount. In the event of a loss, contracts provide for coverage of a second occurrence following the payment of a premium to reinstate the coverage under the contract, which is referred to as a reinstatement premium. The coverage provided under excess of loss reinsurance contracts may be on a global basis or limited in scope to selected regions or geographical areas.
Other property reinsurance includes risk excess of loss and proportional treaty reinsurance, facultative or single risk reinsurance and its risk solutions business. Risk excess of loss reinsurance provides coverage to a reinsured where it experiences a loss in excess of its retention level on a single risk basis. Proportional contracts involve close client relationships, including regular audits of the cedants��data. Its risk solutions business writes property insurance risks for a select group of the United States program managers. Casualty reinsurance is written on an excess of loss, proportional and facultative basis and consists of the United States treaty, international treaty and casualty facultative. Its United States treaty business consists of exposures to workers��compensation (including catastrophe), medical malpractice, general liability, auto liability, professional l! iability ! and excess liability, including umbrella liability. Its international treaty business reinsures exposures respect to general liability, auto liability, professional liability, workers��compensation and excess liability.
Specialty reinsurance is written on an excess of loss and proportional basis and consists of credit and surety reinsurance, structured risks, agriculture reinsurance and other specialty lines. Its credit and surety reinsurance business consists of trade credit reinsurance, international surety reinsurance (mainly European, Japanese and Latin American risks and excluding the United States) and a political risks portfolio. Its agricultural reinsurance business is written on a treaty basis covering crop and multi-peril business. Other specialty lines include reinsurance treaties and some insurance policies covering policyholders��interests in marine, energy, liability aviation, space, contingency, terrorism, nuclear, personal accident and crop reinsurance. A percentage of the property reinsurance contracts it writes exclude coverage for losses arising from the peril of terrorism. These contracts exclude coverage protecting against nuclear, biological or chemical attack.
The Company competes Arch Capital Group Ltd., Axis Capital Holdings Limited (Axis), Endurance Specialty Holdings Ltd. (Endurance), Everest Re Group Limited, Lancashire Holdings Limited, Montpelier Re Holdings Limited, PartnerRe Ltd., Platinum Underwriters Holdings Ltd., Renaissance Re Holdings Ltd., Validus Holdings Ltd., XL Capital Ltd. (XL) and various Lloyd�� syndicates.
Insurance
The Company�� insurance segment consists of property insurance, casualty insurance, marine, energy and transportation insurance and financial and professional lines insurance. Its property insurance line comprises the United Kingdom commercial property and construction business and the United States property business. Property insurance provides physical damage and business interruption! coverage! for losses arising from weather, fire, theft and other causes. The United States commercial property team covers mercantile, manufacturing, municipal and commercial real estate business. The United States property also includes its program business, which writes property insurance risks for a select group of the United States program managers. The United Kingdom commercial team�� client base is predominantly the United Kingdom institutional property owners, middle market corporates and public sector clients.
The Company�� casualty insurance line comprises commercial liability, global excess casualty, the United States casualty insurance and environmental liability, written on a primary, quota share and facultative basis. Commercial liability is written in the United Kingdom and provides employers��liability coverage and public liability coverage for insureds domiciled in the United Kingdom and Ireland. The global excess casualty line comprises risk-managed insureds globally and covers risks at points, including general liability, commercial and residential construction liability, life science, railroads, trucking, product and public liability and associated types of cover found in general liability policies in the global insurance market. The United States casualty account consists of lines written within the general liability and umbrella liability insurance sectors. Coverage on its general liability line is offered on those risks that are miscellaneous, products liability, contractors (general contractors and artisans), real estate and retail risks and other general liability business. The United States environmental account provides contractors��pollution liability and pollution legal liability across industry segments that have environmental regulatory drivers and contractual requirements for coverage, including real estate and public entities, contractors and engineers, energy contractors and environmental contractors and consultants. The business is written in both the primar! y and exc! ess insurance markets.
The Company�� marine, energy and transportation insurance line comprises marine, energy and construction (M.E.C.) liability, energy physical damage, marine hull, specie, inland marine and ocean risks and aviation, written on a primary, quota share and facultative basis. The M.E.C. liability business includes marine liability cover related to the liabilities of ship-owners and port operators, including reinsurance of Protection and Indemnity Clubs (P&I Clubs). It also provides liability cover for companies in the oil and gas sector, both onshore and offshore and in the power generation and the United States commercial construction sectors. Energy physical damage provides insurance cover against physical damage losses in addition to Operators Extra Expenses (OEE) for companies operating in the oil and gas exploration and production sector. The marine hull team insures physical damage for ships (including war and associated perils) and related marine assets. The specie business line focuses on the insurance of property items on an all risks basis, including fine art, general and bank related specie, jewelers��block and armored car. The inland marine and ocean cargo team writes business covering builders��construction risk, contractors��equipment, transportation and ocean cargo risks in addition to exhibition, fine arts and museums insurance.
The aviation team writes physical damage insurance on hulls and spares (including war and associated perils) and comprehensive legal liability for airlines, smaller operators of airline equipment, airports and associated business and non-critical component part manufacturers. It also provides aviation hull deductible cover. Its financial and professional lines comprise financial institutions, professional liability (including management and technology liability), financial and political risks and the United States surety risks, written on a primary, quota share and facultative basis. Its financial institutions ! business ! is written on both a primary and excess of loss basis and consists of professional liability, crime insurance and directors��and officers��(D&O) cover. It covers financial institutions, including commercial and investment banks, asset managers, insurance companies, stockbrokers and insureds with hybrid business models. Its professional liability business is written out of the United States (including Errors and Omissions (E&O)), the United Kingdom and Switzerland and is written on both a primary and excess of loss basis.
The Company insures a range of professions, including lawyers, accountants, architects and engineers. Its management and technology liability teams write on both a primary and excess basis D&O insurance, technology-related policies in the areas of network privacy, misuse of data and cyber liability and warranty and indemnity insurance in connection with, or to facilitate, corporate transactions. The financial and political risks team writes business covering the credit/default risk on a range of project and trade transactions, as well as political risks, terrorism (including multi-year war on land cover), piracy and kidnap and ransom (K&R). It writes financial and political risks globally but with concentrations in a range of countries, such as Russia, China, Brazil, the Netherlands and United States. Its surety team writes commercial surety risks, admiralty bonds and similar maritime undertakings, including federal and public official bonds, license and permits and fiduciary and miscellaneous bonds and privately owned companies in the United States.
Advisors' Opinion:- [By Jake L'Ecuyer]
Equities Trading UP
Aspen Insurance Holdings (NYSE: AHL) shares shot up 11.05 percent to $43.72 after Endurance Specialty Holdings (NYSE: ENH) offered to buy Aspen Insurance for $47.50 per share in a cash and stock deal.
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