Warren Buffett's Latest Buy Is Big Bet On Asia

Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK-A) took a A$500 million position in Insurance Australia Group Ltd IAG. The stake is equivalent to 3.7 percent of the company, roughly $388 million U.S.

In the arrangement, Berkshire Hathaway will receive 20 percent of IAG's written premiums, while the company would also pay 20 percent of its claims for the next 10 years. This was Buffett's first investment in an Australian company and gives him increased exposure into Asia, particularly China, Vietnam, India, Malaysia, Thailand and Indonesia.

"I can't tell you how delighted I am," Buffett said in a video message. "Each company will benefit in a very substantial way."

The insurance business has been one of the keys to Berkshire Hathaway's success. The company owns at least nine insurance properties, including GEICO, the second-largest auto insurer in the U.S.

Year to date, Berkshire Hathaway shares have declined 7.2 percent after seeing gains of 27.6 percent last year.