AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "a-" (Excellent) of Finial Reinsurance Company (Finial Re) (Stamford, CT), an indirect subsidiary of Berkshire Hathaway Inc. (Berkshire) (NYSE:BRK). The outlook of these Credit Ratings (ratings) is stable.

The ratings of Finial Re reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The ratings also reflect Finial Re's strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), which is partially offset by a myopic prospective book of business. Finial Re does not currently write any material premium as the company has been running off its liabilities since 2004. Capital generation in recent years has come largely from investment returns and protected by careful management of runoff liabilities. Overall, the company's exposure to equity markets has grown surplus substantially in recent years. However, surplus declined in 2022 and 2023 due to unrealized losses from investments in addition to a large dividend to the now-dissolved Finial Holdings, Inc., to retire debt that matured in late 2023. Following these few years of surplus declines, Finial Re increased its surplus to $838 million at the end of third-quarter 2024 from $708 million at year-end 2023, driven by investment income and unrealized capital gains. Invested assets are managed by Berkshire.

The company's runoff nature contributes to its limited business profile, strengthened by the ownership of its parent, National Indemnity Company, which has a Long-Term ICR of "aaa" (Exceptional). Finial Re provides utility to the Berkshire organization by assuming select runoff liabilities from Berkshire affiliates.

The ERM assessment of appropriate is driven by management's expertise in running discontinued lines of business, and the ERM process is integrated with that of National Indemnity Company.

This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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Patrick Cyphers

Financial Analyst

+1 908 882 1719

patrick.cyphers@ambest.com

Steven M. Chirico, CPA

Director

+1 908 882 1694

steven.chirico@ambest.com

Christopher Sharkey

Associate Director, Public Relations

+1 908 882 2310

christopher.sharkey@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 882 2318

al.slavin@ambest.com

AM Best Affirms Credit Ratings of Finial Reinsurance Company