Insurance companies make money by taking in premiums, investing that pool of money wisely, then using the pool of money to pay out on claims. That’s why Warren Buffett decided to get into the insurance business. Berkshire Hathaway gave him a steady stream of cash from insurance premiums, which he used to fund his investing activities. For this reason, coronavirus is a unique challenge for insurers. It’s putting pressure on claims at the same time as it’s knocking the value of the assets used to pay for those claims. A hurricane, for example, might cost the insurance industry billions in…

Want to read the full story?

Unlock this article – and everything else on The Currency – with an annual membership and receive a free Samsonite Upscape suitcase, retailing at €235, delivered to your door.

Subscribe

Cancel at any time.

Are you already a member? .