Berkshire’s Jain Taps ‘Secret Weapon’ Raiguel to Run Gen Re

  • Executive is ‘high-energy’ and ‘collegial,’ Jain says in memo
  • Raiguel replaces Gen Re CEO Tad Montross, who is retiring

Warren Buffett’s Berkshire Hathaway Inc. promoted longtime reinsurance executive Kara Raiguel to run the company’s Gen Re unit, which has struggled to expand amid increased competition.

Raiguel will take over from Franklin "Tad" Montross, according to an internal memo confirmed by Gen Re. She has been at Berkshire for 15 years and was a key deputy to Ajit Jain, who runs the company’s namesake reinsurance operation and recently took on responsibility for Gen Re as well.

For the last 10 years, “she has been my ‘secret weapon,”’ Jain wrote in the memo. “It would be difficult to overstate her accomplishments during that time.”  

Raiguel established a workers’ compensation business in California, led Berkshire’s entry into the Indian reinsurance market and helped start the company’s municipal bond insurer, Jain wrote, describing her as “high-energy, collegial and fast-thinking.” She also participated in underwriting large deals in which Buffett’s company assumes risks on policies that other carriers wrote in the past.

Gen Re said last month that Montross was planning to retire by year-end, and his replacement would report to Jain, instead of Buffett. The move gives Jain, long considered a potential successor to the 85-year-old billionaire, broader oversight of Berkshire’s insurance operations.

Jain, 64, built Berkshire Hathaway Reinsurance Group over the last three decades into one of Buffett’s largest operations. Gen Re, however, has retrenched in some markets.

Buffett’s Investing

Reinsurance has been a major contributor to Berkshire’s float, or the premium dollars that Buffett can invest before paying claims. Jain was responsible for about $44 billion in the funds at the end of December, while the figure for Stamford, Connecticut-based Gen Re was $18.6 billion. Together, they account for more than two-thirds of the float at Berkshire, which also owns several other insurers including Geico.

Echoing Buffett’s remarks on the reinsurance business, Jain said his industry will continue to face challenges. A glut of capital -- and new ways that Wall Street dreamed up to transfer risk -- has pushed down the prices that reinsurers charge for coverage and has been one reason why Gen Re has scaled back in some businesses.

Underwriting profit at Gen Re slumped to $132 million last year from $277 million in 2014. Jain said Raiguel would spend the next 90 days or so determining how best to expand Gen Re while maintaining high underwriting standards and relationships with customers. 

‘Well-Oiled Machine’

“We are not interested in any hasty decisions or changes that could do harm to the well-oiled machine that, thanks to Tad, Gen Re has become,” he wrote. “I very much look forward to seeing where she, and you, together will take Gen Re over the coming years.”

Raiguel began her career in 1994 with Cigna Property & Casualty. Her promotion at Gen Re was reported earlier Friday by the Wall Street Journal. She holds a bachelor’s degree in mathematics from Ursinus College in Pennsylvania.

Before it's here, it's on the Bloomberg Terminal.