Buffett's bet against Les Bleus

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The French had high hopes heading into the World Cup, but Warren Buffett and the special reinsurance team at Berkshire Hathaway could have told you Les Bleus were overrated.

In fact, Berkshire bet against them. "If France wins the World Cup, I think we're going to lose about 30 million bucks or something like that," Mr. Buffett told CNBC in March, referring to an insurance contract his company sold to an undisclosed client.

The folks at Berkshire can now breathe easy. After a miserable tournament highlighted by bickering between the players and the coach, France was eliminated from the tournament on Tuesday after losing 2 - 1 to South Africa.

Mr. Buffett, a lifelong fan of the University of Nebraska football team, has not suddenly developed a passion for soccer. The billionaire investor, however, is very interested in the profit potential of insuring against sports mishaps.

Berkshire's special reinsurance unit has written a $260-million (U.S.) policy for baseball superstar Alex Rodriguez that would pay him in event of a career-ending injury. It has also written insurance against the potential cancellation of a college basketball tournament, as well as a policy covering a potential $1-billion payout in a contest sponsored by PepsiCo Inc., according to Bloomberg.

This World Cup has become a magnet for many insurers, including Berkshire. Earlier this month, Lloyd's of London estimated that the total coverage written on the tournament exceeds $9-billion, according to the Associated Press. Most of these policies insure against injuries to top players. Other policies cover property damage and even the possibility of delays and cancellations.

Mr. Buffett did not reveal who had bought the insurance policy on the French team and he could not be reached for comment. One possibility, according to Bloomberg, is the French retailer Carrefour SA, which was promoting a deal in which customers who bought flat-screen TVs would be reimbursed for half the price if the French won the tournament.

Insurance is an important unit at Berkshire, accounting for roughly half of total profit. Typically, the firm covers autos and natural disasters, such as hurricanes and earthquakes, through General Re and Geico, but it also has a history of underwriting unique policies through its special reinsurance team run by Ajit Jain, whom Mr. Buffett has described as a "huge part of Berkshire's success."

In his annual letter to shareholders this year, Mr. Buffett said Mr. Jain has developed a global reputation. "Throughout the world, he is known as the man to call when something both very large and unusual needs to be insured."