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Berkshire insurance unit up 31%

Berkshire Hathaway, the investment company headed by US stockmarket legend Warren Buffett, has recorded its best quarter in nearly two years thanks to share price recoveries.

Income in the company’s extensive insurance and reinsurance unit rose 31% to $US1.16 billion ($1.39 billion).

But like many insurers Berkshire Hathaway has seen a decline in underwriting profit – in its case a 77% fall to $US83 million ($99 million).

The company says the decline came in part because of higher claims costs in its US direct auto insurance unit Geico. The weak global economy also led the insurance operations to raise deductibles and tighten coverage.

Operating profit in non-insurance businesses fell 47% to $US574 million ($685 million), despite a 22% increase from utilities and energy operations. The company’s overall net income rose 14% to $US3.3 billion ($3.94 billion).