Berkshire Hathaway’s pre-tax underwriting income fell 13.6% to $US2.67 billion ($3.42 billion) last year, weighed down by mixed results from its insurance units.

Pre-tax earnings from Geico motor insurance increased to $US1.16 billion ($1.49 billion) from $US1.13 billion ($1.45 billion) in 2013, and Berkshire Hathaway Primary Group’s income grew to $US626 million ($803 million) from $US385 million ($494 million).

But earnings at Berkshire Hathaway Reinsurance Group fell to $US606 million ($777 million) from $US1.29 billion ($1.65 billion), and General Re income dropped to $US277 million ($355 million) from $US283 million ($363 million).

Berkshire Hathaway Reinsurance Group’s earnings slump was partly caused by its retroactive insurance business, which widened its loss to $US905 million ($1.16 billion) from $US321 million ($412 million) in 2013.

“In each year underwriting losses included deferred charge amortisation,” the company says.

“[Last year] we increased estimated ultimate liabilities for contracts written in prior years.”

Berkshire Hathaway says Gen Re’s weaker results are caused in part by “increased frequency and severity of claims” in its Australian disability business.

Net investment income from insurance fell to $US3.54 billion ($4.54 billion) from $US3.71 billion ($4.76 billion), partly due to lower interest income from fixed-maturity securities.

The company’s total net income last year was $US19.87 billion ($25.48 billion), up from $US19.48 billion ($24.98 billion) in 2013.

Meanwhile, Berkshire Hathaway’s top insurance executive Ajit Jain has been named as one of two internal front-runners to succeed Chairman and CEO Warren Buffett.

“Ajit Jain created, out of nothing, an immense reinsurance business that produced both a huge ‘float’ and a large underwriting gain,” Mr Buffett says in his annual letter to shareholders.

“Ajit’s underwriting skills are unmatched.”