Updated Aug. 14, 2014 11:34 a.m. ET
HONG KONG—Two octogenarian insurance magnates are making bets on Asia. Warren Buffett's Berkshire Hathaway Inc. BRKB +1.67% Berkshire Hathaway Inc. Cl B U.S.: NYSE $135.30 +2.22 +1.67% Aug. 14, 2014 4:01 pm Volume (Delayed 15m) : 4.39M AFTER HOURS $135.15 -0.15 -0.11% Aug. 14, 2014 7:59 pm Volume (Delayed 15m) : 88,568 P/E Ratio 15.78 Market Cap $327.92 Billion Dividend Yield N/A Rev. per Employee $606,596 08/14/14 Buffett Reveals Dow Chemical P... 08/14/14 Buffett's Berkshire Hathaway C... 08/14/14 Why Warren Buffett Never Split... More quote details and news » and Maurice "Hank" Greenberg's Starr Cos. are quietly expanding their operations, hoping to capitalize on a fast-growing market that they believe is underserved by existing insurers.
In recent months, the two have been building up their presences in Asia's general insurance market, a sector that remains dominated by local players though some foreign firms, such as France's AXA SA, CS.FR +1.01% AXA S.A. France: Paris €18.42 +0.19 +1.01% Aug. 15, 2014 1:50 pm Volume (Delayed 15m) : 2.06M P/E Ratio 9.42 Market Cap €43.93 Billion Dividend Yield 4.40% Rev. per Employee €1,130,680 08/14/14 Buffett, Greenberg Target Insu... 08/01/14 HEARD ON THE STREET: Don't Wor... 07/11/14 Ownership Rule Change May Spur... More quote details and news » are active here. Mr. Greenberg, 89 years old, a former chief executive officer of American International Group Inc., AIG +0.99% American International Group Inc. U.S.: NYSE $54.06 +0.53 +0.99% Aug. 14, 2014 4:01 pm Volume (Delayed 15m) : 6.35M AFTER HOURS $54.06 0.00 % Aug. 14, 2014 7:25 pm Volume (Delayed 15m) : 93,788 P/E Ratio 8.94 Market Cap $76.38 Billion Dividend Yield 0.92% Rev. per Employee $1,078,970 08/14/14 Treasury's Exit From Ally Coul... 08/14/14 Buffett, Greenberg Target Insu... 08/13/14 Berkshire Hathaway Poaches AIG... More quote details and news » completed the first foreign takeover of a Chinese state-owned general insurer last month. The 83-year-old Mr. Buffett's firm has been hiring high-level executives from AIG and others as it builds up its fledgling commercial insurance business.
"The insurance market in Asia offers so much potential for growth," said Sally Yim, a senior credit officer at Moody's Investors Service. "That's why these two tycoons are expanding here."
AIG remains one of the most significant insurers in Asia, and is working to grow as well. Already, it has property-casualty operations in countries including Japan, China, South Korea, Singapore, Vietnam, Thailand, Australia and Indonesia.
Other foreign insurers, including the U.K.'s Prudential PLC PRU.LN +0.71% Prudential PLC U.K.: London GBp1,427.50 +10.00 +0.71% Aug. 15, 2014 12:50 pm Volume (Delayed 15m) : 1.51M P/E Ratio 0.27 Market Cap GBp36.38 Billion Dividend Yield 1.57% Rev. per Employee GBp2,731,950 08/14/14 Buffett, Greenberg Target Insu... 08/12/14 Prudential Posts Rise in First... 08/12/14 HEARD ON THE STREET: Prudentia... More quote details and news » and Germany's Allianz ALV.XE +0.91% Allianz SE Germany: Xetra €127.90 +1.15 +0.91% Aug. 15, 2014 1:50 pm Volume (Delayed 15m) : 600,216 P/E Ratio 9.52 Market Cap €57.86 Billion Dividend Yield 4.14% Rev. per Employee €700,915 08/14/14 Buffett, Greenberg Target Insu... 08/11/14 Gross Cuts U.S. Government-Rel... 08/10/14 Allianz Net Profit Up 11%, Bea... More quote details and news » SE are also present, selling life insurance and general protection policies. But analysts say that in general insurance, outside of auto protection, there are large coverage gaps in areas from real estate through to aviation. Those underserviced markets, mixed with a rapidly rising middle class and relatively strong economic growth, have caught the eye of Mr. Buffett and Mr. Greenberg. Premiums in Asia outside of Japan for property and casualty insurance grew almost 15% a year in the decade ending in 2012, compared with 3% in the U.S., according to Swiss Re. SREN.VX -0.07% Swiss Re AG Switzerland: SWX Europe CHF73.55 -0.05 -0.07% Aug. 15, 2014 1:49 pm Volume (Delayed 15m) : 680,854 P/E Ratio 6.43 Market Cap CHF27.28 Billion Dividend Yield 5.64% Rev. per Employee CHF2,815,800 08/14/14 Buffett, Greenberg Target Insu... 08/11/14 China's Biggest Reinsurer Plan... 08/07/14 Munich Re Boosted by Investmen... More quote details and news »
Last month, the Starr group, led by Mr. Greenberg, completed its takeover of China's Dazhong Insurance in the first foreign buyout in the country of a state-backed general insurer. It originally held a minority stake.
Mr. Buffett's Berkshire Hathaway Inc. has hired two senior executives from AIG's Asian operations and has picked up staff from other companies too, as part of ambitious plans to boost its commercial insurance business in the region, according to people familiar with the matter.
"People like Warren Buffett have a very sensitive nose," said Jonathan Zhao, head of actuarial and insurance-advisory services for the Asia-Pacific region at Ernst & Young. "There is a big potential for commercial insurance in Asia that has not been captured and this is one area that could potentially push the local players out and get the international players in."
Mr. Greenberg's acquisition of Dazhong turned heads in the industry and marked a significant expansion in China by the man who helped turn AIG into the world's biggest insurer before his forced departure from the company amid an accounting scandal in 2005. Since then, Mr. Greenberg has been building the Starr Cos.' insurance operations across the world.
He has already started to restructure his Chinese acquisition, renaming it Starr Property & Casualty Insurance (China) Co. Ltd. (Starr China). New product lines are planned in commercial property-and-casualty products, covering everything from political risk to food safety.
"We'll make whatever changes we need to make,' he said in an interview in March to mark the acquisition.
Mr. Greenberg's company, which already has operations in Hong Kong, Japan, Australia and elsewhere in Asia, has deep links to China. The purchase of Dazhong was made by Starr Indemnity & Liability Co., part of the Starr group, which can trace its roots back to Cornelius Vander Starr, who founded insurer C.V. Starr & Co. in Shanghai in 1919.
Mr. Buffett's conglomerate, which has long been a big player in insurance in the U.S., established a U.S. commercial-coverage business last year. It has been in the process of expanding globally. Berkshire Hathaway Specialty Insurance, which provides commercial property, casualty and other types of coverage, is applying for licenses to regulators in Sydney, Hong Kong, Singapore and Europe, as well as recruiting talent from established rivals such as AIG, a separate person familiar with the matter said.
Omaha-based Berkshire Hathaway has hired Marc Breuil, who was previously head of AIG's country operations in Hong Kong and Taiwan, and Marcus Portbury, who was the head of casualty for the Asia-Pacific region, the people with knowledge of the hires said.
They also said the hires are part of the investment firm's effort to build a commercial-coverage business in Asia. Berkshire already has an insurance presence in Asia through Gen Re, its reinsurance unit. The company was visible in the aftermath of large-scale flooding in Thailand during 2011, when insurance claims ran into billions of dollars.
"Both Buffett and Greenberg are tried and tested. They are good operators who have been in the industry for decades," said Credit Suisse CSGN.VX +0.80% Credit Suisse Group AG Switzerland: SWX Europe CHF25.34 +0.20 +0.80% Aug. 15, 2014 1:49 pm Volume (Delayed 15m) : 2.05M P/E Ratio N/A Market Cap CHF40.40 Billion Dividend Yield 2.76% Rev. per Employee CHF742,543 08/15/14 Malaysian Economy Speeds Up 08/14/14 Alibaba Is Crowding Out Other ... 08/14/14 Buffett, Greenberg Target Insu... More quote details and news » analyst Arjan van Veen. "There is a good chance that both of them will succeed."
—Anupreeta Das contributed to this article.
Write to Enda Curran at enda.curran@wsj.com
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