PETER EASTWOOD

BERKSHIRE HATHAWAY SPECIALTY INSURANCE GROUP

In June, Berkshire Hathaway Inc. announced the launch of Berkshire Hathaway Specialty Insurance Group, a new property/casualty insurer focused on U.S. excess and surplus lines. Peter Eastwood, the group's president, recently spoke with Business Insurance Associate Editor Matt Dunning. Edited excerpts follow.

Q: What attracted you to the opportunity to head Berkshire Hathaway's new Specialty Insurance Group?

A: The appeal for me is multifaceted. It's an opportunity to build an insurance business within an organization like Berkshire Hathaway that knows and values the insurance business, has a very positive reputation within the business community and has a large balance sheet that allows us to take risks.

Berkshire Hathaway also offers us the benefits of a big company, such as the balance sheet, with the feeling of a small-company environment that focuses its time and energy on external, value-added activity.

From my perspective, that allows us to serve our customers, business partners, brokers and employees quite well. Also, very important to me, I have an opportunity to build this business with a group of people that I have a tremendous amount of respect for and I think very highly of. Honestly, I couldn't ask for more in an opportunity.

Q: Beyond underwriting capacity, what immediate value do you think the Specialty Insurance Group adds to the excess and surplus lines marketplace?

A: This is a risk-taking business, and I believe that customers want to do business with insurance companies that understand risk and have the ability and willingness to take risks. Our group brings financially stable capacity, which I think will translate into us being a long-term market participant that's able to perform pre- and post-event from an underwriting and claims perspective.

Second, customers are looking for insurer partners that have a broad risk appetite across many lines of business, so a holistic view of their risk can be taken into consideration.

Finally, we're building an organization with a relatively flat management structure with people who recognize the value of customer relationships and are empowered to make decisions. This approach will lead to a culture of responsiveness, which will strengthen the partnership between us, our broker partners and our customers.

Q: How have Berkshire Hathaway Specialty Insurance Group's separate business segments been received in the marketplace so far?

A: We're up and running in property/casualty, professional and executive lines, and each of those business segments has been received favorably in the marketplace by brokers and customers, and by people in the industry ... In terms of staging of our business, the property and casualty businesses were the initial businesses to enter the marketplace, followed by our professional and executive lines business, which we launched with the hiring of Dan Fortin.

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In terms of writings, the property/casualty business ... has written the preponderance of the business, although we've written some executive lines business as well.

Q: While the specialty unit's focus is primarily on U.S. E&S lines, are you contemplating overseas opportunities?

A: We are, but our initial focus is in the U.S., and disproportionately so in the excess and surplus lines space. Having said that, in a relatively short period of time we'll be introducing admitted paper products, specifically in the executive lines space, as well as in the programs space. Once we're comfortable that the business is established in the United States, we'll turn our attention to building the business outside the U.S. ... The nice thing for us is that we've already been presented with opportunities to do business outside the U.S. That's a demonstration of customers and brokers feeling that there's a need that we could fulfill outside the country.