MINNETONKA, Minnesota: Shares of UnitedHealth Group have surged since Warren Buffett's Berkshire Hathaway disclosed ilast week it had purchased a significant stake in the insurer, even as the company continues to grapple with federal investigations and financial setbacks.

Berkshire bought roughly 5 million UnitedHealth shares in the most recent quarter, valued at about US$1.57 billion, according to a regulatory filing. The news sent UnitedHealth stock up more than 12 percent in premarket trading, though the shares remain down by about half over the past year.

Buffett, who plans to retire as CEO at the end of the year after six decades at the helm, remains closely watched by investors eager to mirror Berkshire's moves. The filing did not specify whether the investment was made by Buffett himself or by portfolio managers Ted Weschler or Todd Combs, who also pick stocks for the firm.

UnitedHealth has been under heavy scrutiny in recent months. In July, the company confirmed it was cooperating with federal criminal and civil probes into its Medicare Advantage business. The Wall Street Journal earlier reported that investigators were examining whether the insurer used diagnostic coding practices to increase payments under the program.

The company contacted the Department of Justice after reviewing media reports on the probes. More recently, reports suggested that a federal criminal health care fraud unit is investigating whether UnitedHealth used clinicians to collect diagnoses that bolstered reimbursements.

The insurer's UnitedHealthcare division covers more than 8 million people, making it the nation's largest Medicare Advantage provider. Rising care costs and reimbursement rate cuts have pressured the business this year.

UnitedHealth's challenges extend beyond investigations. In December, UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan while heading to the company's annual investor meeting, a shock event that not only rattled the company, but the healthcare insurance industry. In April, UnitedHealth cut its forecast after a spike in health care usage. A month later, CEO Andrew Witty resigned, and the company withdrew guidance entirely, citing higher-than-expected costs tied to new Medicare Advantage members.

Despite those headwinds, Berkshire's investment could signal confidence in UnitedHealth's long-term position in the health care and insurance industry. Berkshire owns dozens of businesses, from Geico insurance to BNSF railroad, and it holds stock in companies ranging from Apple to Coca-Cola.