Tad Montross

At the risk of sounding Pollyannaish, I now assure you that underwriting discipline is being restored at General Re (and its Cologne Re subsidiary) with appropriate urgency. Joe Brandon was appointed General Re’s CEO in September and, along with Tad Montross, its new president, is committed to producing underwriting profits. Last fall, Charlie and I read Jack Welch’s terrific book, Jack, Straight from the Gut (get a copy!). In discussing it, we agreed that Joe has many of Jack’s characteristics: He is smart, energetic, hands-on, and expects much of both himself and his organization.

The exception is General Re, and there was much to do at that company last year to get it up to snuff. I’m delighted to report that under Joe Brandon’s leadership, and with yeoman assistance by Tad Montross, enormous progress has been made on each of the fronts described.

(Laughter) And I don’t see our float growing much from this point. Charlie said last time that it was impossible for it to grow, but it probably would. I don’t know whether he’ll change his opinion on that, but I think — I really think our insurance businesses are in exceptionally good shape. We have some of the best insurance businesses in the world. GEICO’s premium volume was up a little over 16 percent in the first quarter, and in April it was up just right at 17 percent. It had a 6 percent, roughly, underwriting profit in the first quarter. Gen Re, thanks to an incredible job by Joe Brandon and Tad Montross, has turned the corner in a big, big way, and it showed an underwriting profit in the first quarter. Ajit Jain made so much money I don’t want to even tell you about it. (Applause) Some of our primary operations — yeah, you should give him a hand. I mean, that — (Applause) When you get Charlie to clap, you know he’s made us a lot of money. (Laughter) And our primary businesses, particularly U.S.

We have major reinsurance operations at General Re and National Indemnity. The former is run by Joe Brandon and Tad Montross, the latter by Ajit Jain. Both units performed well in 2005 considering the extraordinary hurricane losses that battered the industry.

In 2006, though, everything went right in insurance — really right. Our managers — Tony Nicely (GEICO), Ajit Jain (B-H Reinsurance), Joe Brandon and Tad Montross (General Re), Don Wurster (National Indemnity Primary), Tom Nerney (U.S. Liability), Tim Kenesey (Medical Protective), Rod Eldred (Homestate Companies and Cypress), Sid Ferenc and Steve Menzies (Applied Underwriters), John Kizer (Central States) and Don Towle (Kansas Bankers Surety) — simply shot the lights out. When I recite their names, I feel as if I’m at Cooperstown, reading from the Hall of Fame roster. Of course, the overall insurance industry also had a terrific year in 2006. But our managers delivered results generally superior to those of their competitors.

We have another reinsurance powerhouse in General Re, managed by Tad Montross.

We have another reinsurance powerhouse in General Re, managed until recently by Tad Montross. After 39 years at General Re, Tad retired in 2016. Tad was a class act in every way and we owe him a ton of thanks. Kara Raiguel, who has worked with Ajit for 16 years, is now CEO of General Re.

GREGG WARREN: Warren, the announcement earlier this month, that Ajit Jain would be taking over responsibility for all of Berkshire’s reinsurance efforts once Tad Montross retires from General Re, has raised some questions about not only the change in leadership structure but succession planning. Given the state of the reinsurance market, it makes sense to have Ajit overseeing both businesses, especially if the pricing environment expected to be difficult for another ten years, and there are duplicative efforts that can be streamlined. Given this move and the change in responsibilities we’ve seen at several of Berkshire’s subsidiaries the last few years, I was just wondering if you could just give us some color on how succession planning is handled at the subsidiary level, and any insight you could give us into what led you to finally decide to have Ajit oversee both of Berkshire’s reinsurance arms, and whether or not it will change the amount of work you’ll be doing on the specialty side of the business, would be greatly appreciated. WARREN BUFFETT: Yeah. Well, Tad Montross, after 39 years, has done an absolutely sensational job for Berkshire. You know, originally — (applause) Gen Re was a problem child for a while, as you know. Some brought on by itself and some external. But the — and Tad is — I mean, he’s sensational, and I tried several times, maybe successfully in terms of months but not in terms of years, to get him to stay on longer. As you say, it makes sense to have the reinsurance operation under Ajit. Ajit’s ability to handle more and more things in insurance — he oversees a company called GUARD, which most of you have never heard it, and we bought it a few years ago, and it’s doing terrifically. It’s based in Wilkes-Barre, Pennsylvania. It’s doing a great job with small business policies, primarily workers’ comp, around the country. And it’s flourished, you know, being put under Ajit. He started the specialty operation a couple years ago, and under Peter [Eastwood], that is going gangbusters.