Archie McGill

# Archie McGill **Archie McGill** was a pioneer in the reinsurance industry and an important figure in the development of Berkshire's insurance operations. His understanding of risk and pricing helped establish Berkshire as a force in reinsurance. ## The Reinsurance Business Reinsurance is insurance for insurance companies. Insurers transfer some of their risk to reinsurers, who receive premiums in exchange for assuming liability for claims. It's a business that requires deep understanding of risk and the discipline to price it accurately. > "Reinsurance is a business of judgment. Archie McGill had exceptional judgment." McGill understood that reinsurance, properly practiced, could be extraordinarily profitable. The key was to: - Understand the risk being assumed - Price adequately for that risk - Maintain financial strength to pay claims - Resist the temptation to write business at inadequate prices ## The Berkshire Connection McGill's expertise contributed to Berkshire's emergence as a major player in reinsurance. Berkshire's unique advantages in this business include: - **Financial strength** — We can pay any claim, no matter how large - **Long-term orientation** — We can wait for the right opportunities - **Rational pricing** — We price for profit, not market share - **Expertise** — We understand the risks we assume McGill helped develop this expertise. His judgment and experience made Berkshire a smarter reinsurer. ## The Principles McGill's approach to reinsurance reflected several key principles: 1. **Price for the worst case** — Assume the worst will happen and price accordingly 2. **Know what you're insuring** — Never assume risk you don't understand 3. **Maintain discipline** — Walk away from business that is inadequately priced 4. **Build reserves conservatively** — It's better to over-reserve than under-reserve These principles have guided Berkshire's reinsurance operations for decades. They have produced excellent results. ## The Legacy Archie McGill's contribution was intellectual. He helped Berkshire understand reinsurance in a way that few others did. This understanding has generated billions in profits for Berkshire shareholders. The reinsurance business is now one of Berkshire's most valuable operations, thanks in part to pioneers like McGill who established the principles and expertise that guide us today.