As was confirmed by the company on Monday, Swiss Reinsurance Co. proceeded to sell a part of its American life reinsurance business to a division of Berkshire Hathaway, which fetched the firm a total of 1.3 Billion Francs ($1.27 Billion). With the move, Swiss is looking to free up capital and distribute it across in a way which would help the company bag more profitability.

The transaction has been a "retrocession" deal, under which, a reinsurer goes ahead and transfers a unit or division to another reinsurer, and will let Swiss let free nearly CHF300 Million in capital, which the firm has said it will use to "underwrite other businesses".

Reinsurers generally pick up business from run-of-the-mill insurers who want to spread out their risks.

"This is a significant step forward in Swiss Re's strategy to increase capital efficiency. The transaction puts us in an excellent position to redeploy the capital at more attractive returns", said Christian Mummenthaler, Swiss Re's Life and Health Division Head.

As has been confirmed by Swiss, the transaction with Warren Buffett's Berkshire will be effective starting October 01, 2009, and the company will offer a report in 2010's first quarter.