During a wide-ranging question and answer session with Buffett and Berkshire Hathaway Vice Chairmen Charlie Munger, Ajit Jain, and Greg Abel, one shareholder posed a question about whether the conglomerate would be open to a call from Elon Musk with a request to insure SpaceX’s future mission to and colonization of Mars.
The question was directed at Jain, who’s in charge of Berkshire’s insurance business and is seen as a possible front-runner to succeed Buffett as CEO.
“Specifically he wants insurance to insure SpaceX’s heavy rocket, capsule, payload, and human capital,” the shareholder said of the hypothetical request. “Would you underwrite any portion of a venture like that?”
Without hesitation, Jain responded, “This is an easy one. No thank you. I’ll pass.”
Buffett, who like Musk is one of the richest people in the world, joked that he’d more amenable to the idea of insuring SpaceX’s aim to land humans on Mars, which it has pledged to do by 2024.
“Well, I would say it would depend on the premium. And I would say that I would probably have a somewhat different rate if Elon was on board, or not on board,” Buffett added, referring to the famously mercurial CEO of both SpaceX and electric car company Tesla (TSLA).
Buffett continued, elaborating on why his rate would change based on Musk’s addition to the mission passenger list, “No, it makes a difference! If somebody’s asking to insure something…so that’s called getting skin in the game.”
Jain wasn’t about to let the scenario conclude without affirming his more conservative approach, though. “In general, I would be very concerned about writing an insurance policy where Elon Musk is on the other side,” he joked.
“Tell Elon to call me instead of Ajit,” Buffet said with the last word.
While Berkshire Hathaway wholly owns or has stakes in companies in a number of industries, from tech to fast food to underwear, insurance is one of its “family jewels” and “the core of Berkshire,” Buffett said in his annual shareholder letter this year.
For his part, Musk has and his companies continue to push the envelope, having run-ins with federal regulators over Tesla’s autonomous driving technology and SpaceX’s rocket launches. While NASA awarded SpaceX a contract last month for a lunar spacecraft, Musk’s company was told Friday to put the project on hold while rival bidders challenge the contract.
SpaceX made the news the day after the Berkshire meeting. Early Sunday morning, SpaceX successfully returned a group of international astronauts to Earth in the company’s Crew Dragon capsule “Resilience.” The four astronauts landed in the Gulf of Mexico near Panama City, Florida, after spending about six months at the International Space Station.
Source: Yahoo Finance