Gen Re, the unit of Warren Buffett’s Berkshire Hathaway Inc. that appointed a new chief executive officer in May, struck a deal with a rival reinsurer to help revive sales.

Alleghany Corp.’s TransRe will share revenue and risks on property-casualty reinsurance business that it underwrites through brokers and intermediaries for the next five years, the companies said Tuesday in a statement. The partnership gives TransRe, with the backing of Gen Re, the ability to take on twice as much risk for clients, the Alleghany unit said in a separate document listing facts about the deal.

Gen Re CEO Kara Raiguel is seeking new sources of premium revenue after being named to take over for Franklin “Tad” Montross. The business has been known for so-called direct reinsurance deals, in which customers transfer risk without the involvement of brokers.

“This agreement reflects Gen Re’s recognition of the limitations of its historically direct distribution model,” Meyer Shields, an analyst at Keefe Bruyette & Woods, said in a note to clients.

Berkshire may be willing to accept lower underwriting margins in a quest to generate more premium revenue and funds for Buffett to reinvest, Shields wrote, nothing that Gen Re had better ratios than TransRe in recent years. Reinsurers take on obligations from primary carriers, and the business has been pressured as Wall Street firms pile in, seeking bets that aren’t correlated with stock and bond markets. Policy sales at Gen Re fell to $5.89 billion last year from $6.42 billion in 2014.

Maintaining Relationships

“This facility gives Gen Re a long-term, strategic platform to access a large part of the market in which they currently are not operating,” TransRe said. “It allows them to enter the broker market in a cost-effective manner without disrupting its highly respected direct client relationships, culture and brand, and no additional infrastructure is required.”

The deal will be available to the U.S. and Canadian broker market for business written starting on Aug. 1, the companies said in the statement.

Alleghany is often compared to Berkshire because CEO Weston Hicks follows Buffett’s strategy of using insurance funds to help pay for deals in other industries and writes a colorful annual letter to shareholders. When he agreed in 2011 to buy Transatlantic Holdings Inc., Hicks announced that he was bringing on Joseph Brandon, who previously ran Gen Re, as chairman of the business.

‘Proven Underwriting’

Hicks last year wound down a deal with a separate Berkshire unit. He agreed to pay $400 million to end contracts that covered asbestos-related illness and environmental liabilities with Buffett’s company and Transatlantic’s former parent, American International Group Inc. TransRe said the Gen Re deal could be extended beyond five years.

“TransRe’s proven underwriting track record and excellent broker relationships make them the ideal partner,” Raiguel said in the statement.