ING Group NV, the biggest Dutch financial services company, said on Friday that it agreed to sell its reinsurance unit to Warren Buffett's Berkshire Hathaway Inc. for about $440 million.
ING plans to transfer reinsurance contracts mainly relating to possible asbestos and tobacco claims, Raymond Vermeulen, a spokesman, said in an interview. The agreement also includes about $840 million of treasury bonds, he said.
ING said the sale would result in a capital loss.
Losses from disasters including the 1989 Exxon Valdez oil spill convinced the Amsterdam company to stop writing new business at NRG NV, Mr. Vermeulen said. After 1993, NRG wrote no new reinsurance contracts, ING said. Since then, life reinsurance subsidiaries have been sold and other insurance liabilities settled, the company said.
"It could take a very long time before claims will originate from the remaining reinsurance contracts," Mr. Vermeulen said. "That would have forced us to put aside capital that we want to use for other activities."
ING's U.S. reinsurance unit is still underwriting new business, he said. He would not say whether the company has plans to sell the business.
ING said the deal is part of its "strategy to focus on its core insurance, banking and asset management businesses." The buyer would be "one of the insurance companies" within Berkshire Hathaway, it said, without elaborating. ING expects to complete the transaction in the first half of 2008.
