General Reinsurance Corp. Chairman and CEO Tad Montross plans to step down by the end of 2016, the Berkshire-Hathaway-owned reinsurer said on Tuesday.
An eventual successor will report to Berkshire Hathaway executive Ajit Jain, Gen Re spokesperson Sue Johnson told Carrier Management. Right now, Montross reports directly to Warren Buffett, Berkshire-Hathway’s legendary CEO and long-time leader and visionary.
Johnson declined to comment further on the transition news. But for those who speculate about who might succeed Warren Buffett, Berkshire Hathaway’s legendary leader, the Gen Re news is raising eyebrows.
Jain has long been rumored as a top potential replacement for Buffett once he retires. As Bloomberg reported on April 12, Jain runs Berkshire Hathaway Reinsurance Group, and has built it over time into one of the parent company’s biggest operations, even in the face of heightened reinsurance competition.
In March, Gen Re said it planned to close several global locations as part of a broader bid to reorganize. Its property/casualty arm has had to turn down business because of low rates, and sales in that segment dropped to $2.7 billion in 2015, a 9 percent drop over the previous year. Pretax underwriting profit dropped over the same period by 26 percent.
In February, however, Buffett’s annual shareholder letter praised Jain and Montross alike for their disciplined risk selection of reinsurance groups. Buffett also noted Berkshire’s successful run of profitability for the insurance and reinsurance operations versus industry trends.
If Jain will be the main point person for Montross’s successor, then this suggests he’ll be assuming more responsibilities, which some media outlets have speculated places attention on Jain again as a successor to Buffett.
Back in 2011, Bloomberg reported that Buffett and Jain talk almost every day. The article also noted Buffett’s comments that the board of directors would name Jain to replace him if he showed interest (he hadn’t at the time).
Montross in his capacity as Gen Re’s leader, has been known as one of the more outspoken critics of alternative capital in the reinsurance industry. Speaking at the Property/Casualty Insurance Joint Industry Forum in January 2014, he compared the use of alternative capital to mortgage-based securities a decade before, when high yields were the buzz word until the market crashed.