Berkshire Hathaway, the U.S. conglomerate with large insurance and reinsurance businesses, underscored its cautious approach to emerging risk areas, with insurance vice chairman Ajit Jain highlighting ongoing concerns about limited activity in cyber underwriting and the fast-growing data center sector.
On the cyber front, Ajit Jain said global demand for insurance remains strong but the company has deliberately taken a cautious approach while entering the market. “Cyber ​​is something we worry about on two levels in the insurance business,” he said. “First, there’s huge demand from business people around the world who are interested in buying protection against some kind of cyber incident.”
He explained that a key issue facing Berkshire Hathaway is the difficulty in modeling total risk with confidence, noting: “Because we take any risk, the first question we ask ourselves is how bad is it, and I’m not sure we can answer that question.”
He added that the popularity of cyber insurance in recent years has also affected the company’s stance, with losses relatively limited, leading to lower premiums. “So, we hate to be in an industry where prices are going down. So we’re kind of sitting on the sidelines and I’m not sure when, but I’m pretty sure one day we’re going to be quite a big player in the cyber space.”
Ajit Jain also acknowledged that Berkshire Hathaway, as a large organization, faces cyber risks internally, saying: “We try to do the best we can. I think we are as good as anyone else.” He noted that the group operates above regulatory requirements but did not provide absolute guarantees.
Speaking about data centres, Ajit Jain said current market conditions have limited the company’s participation. “Right now in insurance, supply is greater than demand, which makes it difficult to strike a deal that rationally benefits both the buyer and the seller,” he said, adding that the imbalance prevents Berkshire Hathaway from aggressively underwriting risks associated with new facilities such as hyperscale data centers.
Still, he said the long-term outlook could change as demand continues to grow, concluding: “But there’s clearly a surge in demand and as long as supply doesn’t go crazy, we’re going to enjoy a few days of sunshine sometime in the next few years.”
