The most closely-watched letter issued each year is the one legendary investor Warren Buffet writes to shareholders of Berkshire Hathaway. Famous for their folksy style and insights into the company (each share of BRK-A is worth more than $100,000 at today's prices), the letters are pored over by millions in the corporate world (see a collection, going back to 1997, here). And in this year's letter, he once again raves about Ajit Jain, who runs one of the his major insurance units (and is considered someone in the running to succeed Buffet one day). From the 2010 letter:
A hugely important event in Berkshire’s history occurred on a Saturday in 1985. Ajit Jain came into our office in Omaha – and I immediately knew we had found a superstar. (He had been discovered by Mike Goldberg, now elevated to St. Mike.)
We immediately put Ajit in charge of National Indemnity’s small and struggling reinsurance operation.Over the years, he has built this business into a one-of-a-kind giant in the insurance world.
Staffed today by only 30 people, Ajit’s operation has set records for transaction size in several areas of insurance. Ajit writes billion-dollar limits – and then keeps every dime of the risk instead of laying it off with other insurers.
Three years ago, he took over huge liabilities from Lloyds, allowing it to clean up its relationship with 27,972 participants (“names”) who had written problem-ridden policies that at one point threatened the survival of this 322-year-old institution. The premium for that single contract was $7.1 billion. During 2009, he negotiated a life reinsurance contract that could produce $50 billion of premium for us over the next 50 or so years.
Ajit’s business is just the opposite of GEICO’s. At that company, we have millions of small policies that largely renew year after year. Ajit writes relatively few policies, and the mix changes significantly from year to year. Throughout the world, he is known as the man to call when something both very large and unusual needs to be insured.
If Charlie, I and Ajit are ever in a sinking boat – and you can only save one of us – swim to Ajit.
Wow - re-read that last line again.
And here's what Buffet said in 2009.
Our third major insurance operation is Ajit Jain’s reinsurance division, headquartered in Stamford and staffed by only 31 employees. This may be one of the most remarkable businesses in the world, hard to characterize but easy to admire.
From year to year, Ajit’s business is never the same. It features very large transactions, incredible speed of execution and a willingness to quote on policies that leave others scratching their heads. When there is a huge and unusual risk to be insured, Ajit is almost certain to be called.
Ajit came to Berkshire in 1986. Very quickly, I realized that we had acquired an extraordinary talent. So I did the logical thing: I wrote his parents in New Delhi and asked if they had another one like him at home.
Of course, I knew the answer before writing. There isn’t anyone like Ajit.
According to his Wikipedia entry, Jain has been in Buffet letters going back to 2002.
Jain is married to Tinku Jain, a popular TV personality who has worked at various Indian TV channels in the US over the years.
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