Greg Abel is already making his mark on Berkshire Hathaway just a few months after becoming CEO. His latest decision shows a clear change in how the company handles risk.
In under three months as CEO, Abel has restarted share buybacks, put his whole salary into Berkshire stock, and invested $1.8 billion in a Japanese insurance company. Now, he is making a move that stands out from Warren Buffett’s approach.
Berkshire Hathaway has joined a U.S. government-backed insurance group that covers ships traveling through the Strait of Hormuz. This narrow route is one of the world’s most unstable and important shipping lanes, carrying almost 20% of the world’s crude oil supply. It is a key route for global energy markets.
The U.S. International Development Finance Corporation (DFC) leads this effort and expanded it earlier this month, doubling its reinsurance commitment to $40 billion. Along with Berkshire, other major insurers like AIG, Travelers, Liberty Mutual, Starr, CNA, and lead underwriter Chubb have joined the program.
This group provides war-risk insurance, including hull coverage, protection and indemnity, and cargo insurance. These protections have become harder to find as tensions in the region have grown. Reports say that threats like drone strikes, missile attacks, and naval mines have disrupted shipping, leaving thousands of ships waiting for safe passage.
Markets have already shown signs of stress. Oil prices have jumped in recent weeks, underscoring the importance of stability in the Strait of Hormuz to the global economy. By joining this effort, Berkshire is taking on financial risk and also helping to keep global energy supply chains running.
What makes the move particularly significant is its contrast with Warren Buffett’s historically cautious stance. While Buffett built Berkshire’s insurance empire over decades, he generally avoided large-scale exposure to active war zones. Abel’s willingness to engage in this high-stakes environment suggests a broader interpretation of opportunity, one that embraces calculated geopolitical risk.
The DFC also points out that all the insurers involved have strong experience in marine and war-risk insurance. The government backing adds extra financial security.
For investors, this move raises an important question: Is it a bold new direction for Berkshire’s strategy, or a step into unknown territory? Either way, Greg Abel’s early choices show that his leadership will not just follow the past but will shape the company’s future in new ways.
