Leasing commitments

As part of its normal business operations, the Group enters into a number of lease agreements. Such agreements, which are operating leases, total the following obligations for the next five years and thereafter:

The following schedule shows the composition of total rental expenses for all operating leases as of 31 December (except those with terms of a month or less that were not renewed):

Other commitments

As a participant in limited investment partnerships, the Group commits itself to making available certain amounts of investment funding, callable by the partnerships for periods of up to 10 years. The total commitments remaining uncalled as of 31 December 2012 were USD 2 295 million.

The Group enters into a number of contracts in the ordinary course of reinsurance and financial services business which, if the Group’s credit rating and/or defined statutory measures decline to certain levels, would require the Group to post collateral or obtain guarantees. The contracts typically provide alternatives for recapture of the associated business.

Life & Health retrocession with Berkshire Hathaway

As previously reported, in 2010, Berkshire Hathaway through its affiliate, Berkshire Hathaway Life Insurance Company of Nebraska, entered into a coinsurance agreement with Swiss Re Life & Health America Inc. (the “Co-insurance Agreement”) and a stop loss agreement with Swiss Reinsurance Company Ltd in respect of Swiss Re’s US pre-2004 yearly renewable term life business. The agreements limit Berkshire Hathaways exposure to USD 1.5 billion.

On the basis of its perception of the performance of the retroceded business and losses incurred to date, Berkshire Hathaway has served notice under the Co-insurance Agreement setting forth various specific and general allegations and alleging damages of between USD 0.5 billion and USD 1.0 billion.

As required by the Co-insurance Agreement, the parties have met to discuss the allegations and have exchanged, and continue to exchange, proposals to resolve the dispute. Failure to resolve the dispute could result in commencement of arbitration proceedings. If arbitration proceedings are commenced, there is no guarantee that arbitrators would agree with the Group’s position and findings against the Group could have a material adverse effect on its financial condition and results of operations.

The Group believes that these claims are without merit.

Legal proceedings

In the normal course of business operations, the Group is involved in various claims, lawsuits and regulatory matters. In the opinion of management, the disposition of these matters is not expected to have a material adverse effect on the Group’s business, consolidated financial position or results of operations.