Business

Berkshire Hathaway's new CEO just made a move Buffett never did

By Damilola Esebame TheStreet

Updated April 18, 2026 12:02 PM

Greg Abel has been CEO of Berkshire Hathaway for barely three months. In that time, he has restarted share buybacks, invested his entire salary in company stock, and put $1.8 billion into a Japanese insurance giant, and those moves got attention.

His latest decision goes somewhere Warren Buffett never went. Berkshire has joined a U.S. government-backed insurance syndicate covering ships transiting the Strait of Hormuz, the most dangerous shipping corridor in the world right now.

Roughly 20% of global crude oil moves through that waterway, and an effective Iranian blockade has kept most commercial traffic away, the U.S. Energy Information Administration indicated in its April Short-Term Energy Outlook.

The U.S. International Development Finance Corporation announced on April 3 that it is doubling its reinsurance commitment to $40 billion, adding Berkshire Hathaway, AIG, Travelers, Liberty Mutual, Starr, and CNA alongside lead underwriter Chubb.

For Berkshire shareholders and anyone watching energy markets, the move signals a new era of risk-taking under Abel. It raises a question investors should consider carefully: Is this the right kind of risk?

Berkshire Hathaway is now insuring ships in an active war zone

The DFC's own release confirmed that Berkshire joined the expanded reinsurance facility, which now provides $40 billion in coverage for vessels willing to transit the Strait of Hormuz. Asia Insurance Post reported that the syndicate offers war hull risk insurance, protection and indemnity, and cargo insurance that were previously unavailable to shipping companies exposed to the strait.

Iran has threatened vessels with drone attacks, missiles, and water mines. The UN's International Maritime Organization has reported approximately 2,000 vessels waiting on either side of the strait for clearance. Brent crude closed at $109.03 per barrel on April 3, up roughly 49% since hostilities began, according to Bloomberg.

More Warren Buffett:

Buffett built Berkshire's insurance empire over decades, but he consistently avoided underwriting war-risk exposure in active conflict zones at this scale. Abel's willingness to step into this kind of geopolitical risk marks a real departure from Buffett's playbook, even as Buffett remains chairman and was reportedly consulted on other recent moves.

The DFC, which is providing the government reinsurance backstop behind the syndicate, noted that all participating insurers have deep experience in marine and war risk underwriting.

Berkshire's participation through its National Indemnity subsidiary gives it access to premium income on coverage that most insurers are currently refusing to offer.

Abel's $1.8 billion Tokio Marine deal deepens Berkshire's global insurance reach

The Hormuz syndicate is not the only international insurance move Abel has made. In late March, Berkshire's National Indemnity subsidiary acquired a 2.5% stake in Tokio Marine Holdings, one of the world's largest reinsurance companies, for $1.8 billion. Berkshire also has authorization to increase its stake to 9.9% without additional regulatory approval.

The deal goes beyond a simple equity investment. National Indemnity will join Tokio Marine's reinsurance panel through a Whole Account Quota Share arrangement, absorbing a portion of the Japanese insurer's global risk portfolio, Reinsurance News explained.

Tokio Marine said the arrangement will help mitigate underwriting volatility from natural catastrophe risks and reduce its dependence on cyclical reinsurance markets.

The partnership is locked in for a decade, and in the first five years, both companies agreed not to enter similar arrangements with competitors, a spokesman for Tokio Marine confirmed through the Insurance Journal.

Berkshire approached Tokio Marine with the proposal, not the other way around.

Abel also issued a multi-tranche yen bond in Japan, expanding Berkshire's funding base in the country where it now holds significant equity positions in five major trading houses and Tokio Marine.

Barchart reported that the ¥272.3 billion ($1.7 billion) offering spanned six tranches maturing from 2029 to 2056 and was the first yen bond sale under Abel's leadership.

Borrowing in yen provides a natural hedge against currency risk on those Japanese investments. Buffett used similar yen-denominated debt to fund the original trading house positions, but the scale and speed of Abel's moves in Japan have accelerated.

Abel's first 100 days have been defined by deploying Berkshire's $373 billion cash pile

Abel became CEO on January 1, 2026. Buffett spent the final roughly 19 months of his tenure without authorizing a single share buyback, CNBC reported, even as Berkshire's cash pile grew to $373.3 billion by year-end 2025.

On March 4, 2026, Berkshire resumed buybacks for the first time since May 2024, repurchasing the equivalent of 309 Class A shares, worth roughly $226 million.

Abel also disclosed a personal purchase of 21 Class A shares worth approximately $15.3 million, Yahoo Finance/24-7 Wall St. reported, committing to invest his entire after-tax salary in Berkshire stock every year he serves as CEO.

"As long as our intrinsic value exceeds the market value, again, conservatively determined, we'll continue to repurchase. But the one thing we have never done is we don't disclose the amount, the timing, or the computation" said Greg Abel, CNBC Squawk Box, March 5, 2026

Berkshire also closed a $9.7 billion acquisition of Occidental Petroleum's chemical subsidiary OxyChem on January 2, 2026 a deal announced under Buffett in October 2025 that completed on Abel's first business day as CEO, Occidental confirmed in its completion release, further illustrating that Abel is not sitting on the cash pile the way Buffett did in his final year.

How the Hormuz insurance move connects to rising oil and gas prices

The Strait of Hormuz crisis is not an abstraction. Roughly 20 to 21 million barrels of crude and petroleum products normally transit the strait daily, OilPrice.com noted, accounting for about 20% of global daily consumption. With commercial shipping effectively frozen, energy prices have surged. CNBC reported that U.S. gas prices have climbed above $4 a gallon for the first time since 2022.

J.P. Morgan analysts warned in an April 2 research note that oil could spike to $120 to $130 per barrel in the near term, with a risk of reaching $150 if the disruption continues into mid-May, Energy News Beat reported. For consumers, that means higher costs at the pump, higher shipping costs embedded in the price of goods, and broader inflationary pressure.

Berkshire's decision to insure vessels willing to make the run is designed to encourage traffic to resume. But analysts note that financial guarantees alone cannot compel crews to sail through a minefield.

Bob McNally, president of Rapidan Energy Group, told CNBC that he "can't believe the U.S. military didn't start degrading Hormuz interdiction capabilities on day one," suggesting insurance rates will stay elevated until Iran's military capabilities are meaningfully degraded.

Bloomberg/Getty Images

What Berkshire Hathaway investors and shareholders should watch next

Abel's moves in his first quarter as CEO have answered the biggest question investors had about the post-Buffett era: Yes, he is willing to deploy capital. The question now is whether the risk he is taking will pay off.

Key metrics to monitor

Hormuz syndicate claims exposure: If a vessel covered by the DFC program is struck, Berkshire and the other insurers bear the first layer of loss before the government backstop kicks in. Watch Berkshire's quarterly disclosures for any references to war risk reserves or marine catastrophe exposure.
Tokio Marine partnership expansion: Berkshire can increase its stake to 9.9%. Any additional purchases will signal Abel's confidence in the long-term partnership and in Japan's insurance market.
Insurance float growth: Berkshire's insurance float stood at approximately $176 billion at year-end 2025, Insurance Business Magazine reported. If the Hormuz coverage and Tokio Marine arrangement generate significant new premium volume, float could grow meaningfully and give Berkshire more capital to invest.
Buyback pace: Abel has restarted repurchases, but the volume and consistency of future buybacks will indicate whether he sees Berkshire's stock as persistently undervalued or whether the March purchases were a one-time signal.
Berkshire's May annual meeting: Abel's first meeting as CEO will give shareholders the chance to hear directly how he views the Hormuz decision, the Japan strategy, and the overall risk profile he is building. It will be the clearest signal yet of how different the Abel era will be.

Abel is not breaking from Buffett, but he is building something different

Buffett remains chairman and still comes to the office daily. Abel has said he consults with Buffett on major decisions. But the direction of capital is unmistakably shifting.

Buffett spent his last six quarters accumulating cash and avoiding risk. Abel has spent his first quarter deploying billions into Japanese insurance, war-zone shipping coverage, and a major chemical acquisition.

The Hormuz move is the sharpest dividing line. Insuring ships in an active conflict zone backed by a government reinsurance program is a fundamentally different kind of bet than anything Buffett made during his tenure. Whether it works depends on the geopolitical outcome, the claims experience, and the premium income it generates.

For long-term Berkshire shareholders, the signal is clear. Abel is not managing for caution. He is managing for growth, and he is using Berkshire's unmatched balance sheet to underwrite risks that few companies in the world can absorb.

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This story was originally published April 18, 2026 at 11:47 AM.