The Hartford Insurance Group has agreed to commute and terminate its aggregate excess of loss reinsurance agreement with National Indemnity Company (NICO), a Berkshire Hathaway subsidiary, ending cover for asbestos and environmental adverse development that has been in place since December 31, 2016.
Hartford Fire Insurance Company and certain affiliates entered into the commutation and release agreement with NICO on September 23.
On September 25, Hartford Fire received a $1.12bn cash payment, and the parties terminated the reinsurance agreement and related transaction documents and released each other from their obligations.
The transaction also resolves a confidential arbitration over a dispute under the agreement.
Hartford expects to recognise a $497m pre-tax net gain and a $393m increase in net income for the three and nine months ended September 30, 2026, with no impact on core earnings.
The company said the gain reflects the release of deferred gain on retroactive reinsurance following the commutation.
