The business has about 70 employees in Canada, the U.S. and Ireland, with life insurance in force of about C$113 billion ($109 billion), according to a statement today from Toronto- based Sun Life.
Buffett, who oversees the largest reinsurer in the U.S., has assumed risks from XL Group Plc and CNA Financial Corp. as carriers have moved to simplify or limit liabilities. Buffett, 80, has also wagered on the market through stock picks. He built a stake of more than 10 percent in Munich Re, the world’s biggest reinsurer. Last year, Buffett injected $2.7 billion into No. 2 Swiss Reinsurance Co.
“This transaction releases capital which can be put to work in other businesses,” Sun Life Chief Executive Officer Donald Stewart said in the statement. “Our reinsurance business is profitable, but it is not a growth area for Sun Life.”
Berkshire fell $2,812, or 2.3 percent, to $120,643 at 1:29 p.m. in New York Stock Exchange composite trading. Sun Life slipped 15 cents to C$27.88 on the Toronto Stock Exchange.
Sun Life, Canada’s third-largest insurer, is focusing its main businesses, which include life insurance in Canada, the U.S. and Asia and Boston-based money manager MFS Investment Management. The company is scheduled to release third-quarter results Nov. 3.
Berkshire agreed in July to assume liabilities tied to asbestos and pollution claims from Chicago-based CNA in exchange for a $2 billion fee. Berkshire’s reinsurance businesses provides premium revenue, which Buffett uses to buy stocks and bonds and earn investment returns. Berkshire this week announced the hiring of hedge-fund manager Todd Combs to help oversee the company’s portfolio.
Sun Life’s deal with Omaha, Nebraska-based Berkshire, where Buffett is also CEO, is expected to be completed Dec. 31, according to the statement. Terms weren’t disclosed.
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