Warren Buffett's new and mysterious bet soars in the stock market

The shares of the Swiss insurer Chubb soared up to 8% this Thursday before the market opened after it was revealed that Berkshire Hathaway, Warren Buffett's firm, has acquired shares valued at $6.

Oliver Thansan
Oliver Thansan
15 May 2024 Wednesday 16:25
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Warren Buffett's new and mysterious bet soars in the stock market

The shares of the Swiss insurer Chubb soared up to 8% this Thursday before the market opened after it was revealed that Berkshire Hathaway, Warren Buffett's firm, has acquired shares valued at $6.7 billion. The investment represents 6.7% of the capital.

This is reflected in documents sent to the US stock market regulator (SEC) this Wednesday, in which the position until now kept secret is detailed. The name of the company ends the suspense of what the unnamed investment was that had been reflected in Berkshire's balance sheets for months. The conglomerate has been accumulating the stake since 2023, but did not reveal the name to the market because the SEC allowed it to keep it confidential while it continued to buy shares.

“Millions of people follow what Buffett does,” says David Kass, a finance professor at the University of Maryland, which would explain his reluctance to take the company he was buying public.

Chubb is one of the largest property casualty insurers in the US, operating in 54 countries. It covers a range of risks including cyber attacks and shipping.

The firm insured Baltimore's Francis Scott Key Bridge, which collapsed when a freighter crashed into it in late March. He will reportedly have to pay about $350 million to the state of Maryland.

Berkshire is familiar with the insurance industry and owns a variety of companies, most notably Geico. Buffett sees the insurance sector as the “core” of the conglomerate, helping to generate liquidity that can then be reinvested.

The conglomerate has also invested in other businesses in the insurance sector. It owns a stake in Aon, a major broker, and has previously bet on rivals such as Marsh

The note to markets does not say whether Buffett or one of Berkshire's two other investment managers made the investment in Chubb, but Buffett generally manages all holdings worth $1 billion or more.