Berkshire Hathaway’s insurance pre-tax earnings fell 58% in the September quarter to $US1.58 billion ($1.51 billion), mainly due to a $US1.47 billion ($1.41 billion) turnaround in reinsurance earnings.

The giant investment and insurance group’s reinsurance business turned a $US1.37 billion ($1.31 billion) underwriting profit in the third quarter of 2011, but this year third-quarter earnings fell to a loss of $US102 million ($97.83 million).

This in turn pushed the underwriting division’s profit down to $US608 million ($583.54 million) from $US1.69 billion ($1.62 billion) for the third quarter last year.

Net investment income at $US976 million ($936.3 million) was down 6% on the 2011 third quarter. It pushed the overall insurance result up to $US1.58 billion ($1.51 billion).

Total earned premium for the third quarter was $US8.85 billion ($8.49 billion), up 15.8% on the corresponding period last year, while insurance losses and adjustments were 31.1% higher at $US5.01 billion ($4.8 billion). Underwriting expenses rose 79.5% to $US1.94 billion ($1.86 billion).

Berkshire Hathaway’s statutory reserves stood at $US95 billion ($91.17 billion) at the end of the quarter which “creates opportunities to negotiate and enter into insurance and reinsurance contracts specifically designed to meet the unique needs of insurance and reinsurance buyers,” the company’s third-quarter report says.

Since 2008 the reinsurance group has carried about 20% of Swiss Re’s property and casualty insurance risk, but the report says this arrangement will cease at the end of the year.