The surprise defection of four senior executives from American International Group Inc. to rival Berkshire Hathaway Inc. likely signals a significant increase in Berkshire's participation in the excess and surplus lines market, experts say.

The hiring of Peter Eastwood, president and CEO of AIG Property/Casualty—The Americas, David J. Bresnahan, president of Lexington Insurance Co., David Fields, chief reinsurance officer of AIG, and Sanjay Godhwani, president of AIG's property/casualty group—Latin America and the Caribbean, will give the Berkshire new traction in the excess and surplus lines market, said Tom Mason, a senior industry analyst at SNL Financial L.C. in Charlottesville. Va.

“I think they're probably interested in the business right now, and hiring these executives is a great way to jump start it,” Mr. Mason said, noting that while Berkshire's excess and surplus premiums increased 6.4% in 2012, the business only accounts for about 2% of its premiums of its U.S. property/casualty business.

“Given its size, it's kind of a standout for how little it devotes to E&S at the moment,” Mr. Mason said of Berkshire.

A spokesman for Omaha, Neb.-based Berkshire did not return a call Friday seeking comment. Berkshire Hathaway is the conglomerate run by billionaire investor Warren Buffett.

Paul Newsome, managing director and senior insurance analyst at Sandler O'Neill & Partners L.P. in Chicago, said he saw a move into the surplus market as a logical complement to Berkshire's existing insurance businesses.

“E&S is about the business of unusual risks and Berkshire has a history of doing unusual risks in their reinsurance business, so it's really not that far afield from what they are already doing in many respects,” he said.

%%BREAK%%

Mr. Newsome was less optimistic that the recruitment of the four AIG executives will give Berkshire's excess and surplus business a boost in the near term. “I don't think it will be hard for them to become an important player in E&S, but it is not something that is going to happen overnight, though,” he said.

However, an insurance industry senior executive who spoke on condition of anonymity, said that he expects the recruitment of Mr. Eastwood and his team paying immediate dividends for Berkshire. “I think they can make an impact right away,” he said. “Berkshire has a very strong balance sheet and Peter, Dave and Sanjay have a significant following.”

What effect a more active Berkshire Hathaway will have on the E&S market is less certain. Mr. Mason said he had just compiled a list of E&S rankings, and that Berkshire Hathaway ranked in 18th place. AIG's Lexington Insurance Co. was ranked the largest U.S.-based excess and surplus lines insurer by Business Insurance in 2012 with 2011 gross premiums of $6.14 billion.

Mr. Newsome said he didn't anticipate Berkshire aggressively pricing business in order to gain market share. “I wouldn't worry about prices dropping,” he said. “Berkshire is big, but it's a pretty disciplined underwriter, so I wouldn't expect them to burn their way into the market.”

Mr. Newsome also said he expected AIG to handle the defection with ease.

%%BREAK%%

“Ever since Hank Greenberg left, AIG has had a lot of turnover,” he said. “These are important people, but AIG is such a big company that the loss of four people suggests the need for a strategic change. It doesn't strike as all that is terribly material in the near term.”

Indeed, AIG said in a statement regarding the four senior executive departures, “AIG has a seasoned and very deep bench of talented property and casualty executives ready to assume broader responsibilities.''

On an interim basis, John Doyle, head of AIG's global commercial insurance business, will assume Mr. Eastwood's former responsibilities as the leader of the property/casualty business in the Americas, AIG said.