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The two insurance giants American International Group Inc. and Berkshire Hathaway Inc. are blocking, striking and parrying in the talent market as Warren Buffet’s Berkshire moves into AIG’s market. Berkshire aggressed by hiring four senior AIG executives familiar with the business to “start a new commercial-insurance unit” that will compete with AIG’s most profitable business unit. Berkshire has expanded its operation to have 62 employees, and it has hired an additional 15 people from AIG.
Yahoo Finance calls the situation An all out war that started when Berkshire actively recruited members from its competitor’s team. AIG then threatened to sue Berkshire. Over the summer an agreement was reached with the two parties as Berkshire agreed not to hire any more of AIG’s employees for a year. The insurance giants continue to compete for business. It is interesting that AIG didn’t capture the employability of its executives and staff by asking them to sign various non-compete agreements, protective proprietary contracts or trade secret covenants to block this very situation from happening. Across finance and technology especially, certain contracts are used to a degree to make sure that a competitor specifically cannot recruit from your very ranks. Yet other industries also can protect themselves from rogue employees working from their competitors.
Berkshire Hathaway owns railroad, energy and chemical companies. They also make furniture and candy. Insurance is one of their larger businesses, which accounts for around 25 percent of their revenue. In 2012 they listed their revenue as $159 Billion. AIG is a multinational insurance corporation with over 63,000 employees in more than 130 countries. They provide casualty insurance, life insurance and retirement services. Their 2012 revenue was at $65 million.
