BHSI targeting multinational clients with 170-country network

Berkshire Hathaway Specialty Insurance (BHSI) is embarking on a global growth drive with the expansive carrier in the process of establishing its own worldwide network of locally based companies to better serve multinational customers, The Insurer has learned.


Since being launched in 2013, BHSI has opened offices in 14 countries around the world, with operations in the US, Canada, Europe, Asia, Middle East, Australia and New Zealand.

David Valzania, head of multinational business insurance at BHSI, told The Insurer that his company was not looking to open offices “everywhere”. 

Instead, Valzania said BHSI is considering launching offices in “a couple more” European countries, but “that’s probably about it”.

Valzania joined BHSI from AIG in 2016 to launch its multinational operation. To support BHSI’s customers, it initially relied on an international network from a third-party provider which allowed it to secure policies for customers all over the world.

However, as Valzania explained, with BHSI having grown at such a fast rate, the time has now come for it to develop its own international network.

“This year, we’ll likely exceed $5bn in premium and I feel we’ve outgrown that single network provider solution,” Valzania told The Insurer.

“We’re passionate about being able to deliver excellent service to our customers, and we feel the best way to support the growth of the company and to provide that service is to have our own network where we’re dealing directly with insurers we’ve chosen and we feel are aligned with us philosophically,” he said.

In 160 to 170 countries by end of October

That process has been in the works for almost a year, and in early September Valzania said BHSI had agreed partnerships with almost 120 countries around the world.

By the end of October, Valzania hopes that network will be between 160 and 170 countries.

“You don’t need to be everywhere, but you need to be in most places,” said Valzania.

“We think we’ve developed a network with some terrific locally admitted companies around the world. We’ve chosen, in almost every country, just one company to partner with. We don’t want to unnecessarily create a competitive situation – we want to put all of our eggs in one basket and be an important trading partner with that one company,” Valzania explained.

In many cases, the relationship works like a fronting arrangement whereby the local carrier issues a local policy and BHSI then reinsures that risk 100 percent.

“It will make us a much more compelling alternative for global customers,” Valzania said.

“From a customer’s standpoint, it’s BHSI owning the overall global relationship and it’s BHSI and the Berkshire Hathaway balance sheet that’s sitting behind the local partner,” the executive said.

“It’s us partnering with a quality partner in every jurisdiction to be our customer service provider essentially in that country.”

Smaller partners the norm

The focus of the global network is to establish relationships with the best possible partners in any given country. Valzania said he was not overly concerned whether they were smaller, national or regional players, or indeed larger, multinational carriers.

“They have the local expertise that we lack, and we have all of the capital that they may lack. Together we’re a wonderful partnership.”

David Valzania, head of multinational business insurance, Berkshire Hathaway Specialty Insurance

But Valzania said larger insurers have generally been unwilling to partner with BHSI.

“Most of the larger companies are not interested in working with us. I don’t take that personally.

“You want to find companies that are well suited to support these partnerships. And certainly, the large globals do, and we do have some business with them, but many of them have not been interested in engaging with us,” said Valzania.

What is most important, Valzania said, is that the partners “have the right products, service capability and philosophical interest in providing excellent service”.

“They have the local expertise that we may lack, and we have all of the capital that they may lack. Together we’re a wonderful partnership,” Valzania said.

He added: “Some of our partners are actually quite small, but that doesn’t bother me in the least as long as they’re a sound organisation, have the technical expertise that we need, and have the service, claims and engineering capabilities.”

Similar product suite crucial for partners

In choosing the partners, Valzania said a key consideration was local companies that have a similar product suite to BHSI and understand the business it writes so it can provide advice on potential nuances within each market.

“We want to learn as much as possible up front in these engagements so when the phone rings and the customer says they need a policy in Mongolia, hopefully we’ve laid enough of the train track down that we can pretty easily at that point conduct the transaction,” noted Valzania.

Beyond that, considerable due diligence has been undertaken on the local partners, including sanctions checks.

“Warren Buffett has spent his lifetime building this brand, and I don’t want to do anything that’s going to negatively affect that, so we choose very carefully and seek to establish mutually beneficial, enduring relationships,” said Valzania.