1994: How is Berkshire's structured settlements business going?

AUDIENCE MEMBER: Good morning. My name is Matt Voke (PH). I’m from Omaha.

In last year’s meeting you made reference to structured settlements. I was wondering, how is that business progressing for you?

WARREN BUFFETT: Question’s about the structured settlement business, which is a business in which Berkshire guarantees, in effect, an annuity to some claimant of another — usually — of another insurance company, who suffered an injury and instead of getting a lump sum now wants to get a stream of payments over many years in the future, sometimes going out 75 years.

We have set up a life company to do that business. We formerly did it all through our property-casualty companies. And, we have done some business, but it’s not been a big business yet, and it may never be a big business.

It’s a perfectly satisfactory business, but it’s not an important item at present in the analysis of Berkshire’s value.