Warren Buffett did not become the world's second-richest man by playing it safe. But the legendary US investor's latest deal, to take on the multibillion pound liabilities of Lloyd's of London, must be his boldest move yet.

The 76-year-old "sage of Omaha" has lost none of his capacity to surprise. Just four months ago, he stunned his followers by unveiling plans to give away the bulk of his $40 billion (€31.8 billion) Berkshire Hathaway fortune.

Some $30 billion is going to the charitable foundation set up by his friend Bill Gates, the only man in the world who can write a bigger cheque.

Many believed that his unprecedented act of philanthropy was a signal that Buffett was finally preparing to retire from the global investment scene. But, last Friday, he stunned his followers once again by pulling off a groundbreaking deal that will bring to an end one of the darkest chapters in the City of London's history.

The centuries-old Lloyd's insurance market, renowned for its willingness to insure any risk, was brought to the brink of collapse in the early 1990s when it was hit by a series of calamities.

These ranged from natural disasters such as hurricanes and earthquakes and included massive asbestos-related claims. Thousands of Lloyd's "Names" - the wealthy individuals who underwrote the insurance market's policies - suffered huge losses and many were ruined.

With the market itself on the brink of collapse, a rescue plan in 1996 saw the creation of Equitas, an insurance vehicle set up to manage all of Lloyd's pre-1993 liabilities, some of which go back decades - so-called "long-tailed liabilities."

While this gave them some protection, the fear for the 34,000 Names (or their descendants, as several thousand have since died) was that the claims might still be too great.

Now Buffett has come to their rescue with a £3.8 billion deal that will see his Berkshire Hathaway insurance company take on the pre-1993 claims and provide extra cover to Equitas.

Under the complex transaction, the Names could even get a payout, depending on future claims.

Those caught up in the great Lloyd's disaster were jubilant, billing it as a deal that will at last allow the Names to "sleep soundly" for the first time in more than a decade.

So what's in it for Buffett? He said last week the move gave Berkshire "the expectation but not the assurance of a profit" and it is true that, because of the nature of the long-tailed liabilities, it will be decades before the final picture becomes clear; certainly well after Buffett's lifetime.

But the legendary American investor will have calculated precisely what he expects to make from the deal. He is a master of timing and he is not afraid of risk - just days after the 9/11 attacks, Berkshire Hathaway sold $750 million of terrorist attack cover to one international airline.

The premium has never been disclosed but was undoubtedly massive - and no payout was made.

Only someone as wealthy as Buffett could have dared to take on Lloyd's liabilities. But, as one insurance market veteran mused last week, even unlimited liabilities eventually come to an end.

Corus's Brazilian suitor

Shares in the Anglo-Dutch Corus group remain steadfastly above the 455p terms offered by India's Tata Steel in the agreed £4.3 billion bid that will create the world's fifth-largest steelmaker.

Many in the London market are betting that a rival bidder will emerge to top the Tata terms, or at least to show enough interest to force Tata to raise its own offer. Hopes for a sweetener to the bid have been raised by major shareholder Standard Life, which has a 7.8 per cent stake in Corus. While praising the Corus management for its achievements in the past few years, Standard Life made it clear it was surprised the board had agreed such terms.

It stopped short of saying it will not accept the deal, however, and could be attempting to flush out a rival suitor.

But potential rivals appear to be ruling themselves out one by one: Germany's ThyssenKrupp has indicated its lack of interest and the Russian Severstal is thought to be too busy with its own imminent flotation in London to risk a deal.

One name that refuses to go away, however, is the Brazilian Companhia Siderurgica Nacional (CSN), which is reported to have hired Lazard to advise on a possible rival offer.

A move on Corus would be an ambitious one for the Brazilian firm and one disadvantage for any rival would be the Anglo-Dutch steelmaker's £13 billion pension liability.

While carping about the bid terms, investors would do well to remember that shares in Corus were languishing at just 19p three years ago. Indeed, Standard Life stands to make as much as £100 million on its near 8 per cent stake should the deal go through.

There is nothing wrong with wanting more, but the cleverest investors might turn out to be those who sell in the market while the shares remain above 470p, buoyed by those rival bid hopes.

They will miss out if another suitor emerges but will have the consolation of a healthy profit - and one that can be banked now, rather than at the end of a lengthy takeover process.

Fiona Walsh writes for the Guardian newspaper in London