Local reinsurance sources have cast doubt on the accuracy of a UK media report claiming investment and insurance giant Berkshire Hathaway offered to provide Wesfarmers Insurance with a $1 billion reinsurance package.

The London-based trade daily Insurance Insider says efforts to “swallow up the whole” of Wesfarmers’ cat treaty were rebuffed. It says the deal “would have left the open market with nothing”.

Local reinsurance brokers say there is “no way” Berkshire Hathaway would commit to such a program. Had it been possible, the deal, which the publication says would have come into effect on July 1, would also be complicated by the acquisition of Wesfarmers’ insurance assets by IAG.

“Catastrophe pricing in Australia is too low for Berkshire Hathaway at present,” an informed source who declined to be named told insuranceNEWS.com.au. “This Wesfarmers thing is simply something they wouldn’t do. It didn’t happen.”

The source says Berkshire is “attracted” to the Australian market, but with low reinsurance pricing due to abundant capital it will “probably seek innovative alternatives” to invest in the local market.