Diversified group Berkshire Hathaway has stumbled on investment losses and insurance claims in tabling fourth-quarter net income of $US3.05 billion ($2.85 billion).

A dive in the value of the US investment giant’s investment and derivative contracts and rising insurance claims combined to push net income 30% lower than the corresponding quarter last year and the full-year result to $10.3 billion ($9.65 billion), down 21%.

The value of the company’s investments for the full year fell 72% to $US382 million ($357.9 million) while underwriting profits from insurance operations dropped 87.7% to $US248 million ($232.4 million).

While reinsurer Gen Re and automotive insurer Geico produced smaller profits of $US144 million ($134.9 million) and $US576 ($539.88 million) respectively, BH Reinsurance tabled a year-end loss of $US714 million ($669.2 million) – a $US890 million ($834.2 million) turnaround since 2010.

Despite the heavy losses incurred by the group’s underwriting operations, Berkshire Hathaway’s claims reserves, or float, rose by $US4.739 billion ($4.44 billion) to $US70.571 billion ($66.15 billion).

CEO Warren Buffett says the group is satisfied with its risk profile, despite losses in its flagship reinsurance division.

“Indeed, we are far more conservative in that respect than most large insurers,” Mr Buffett said.

“For example, if the insurance industry should experience a $250 billion loss from some mega-catastrophe – a loss about triple anything it has ever faced – Berkshire as a whole would likely record a moderate profit for the year because of its many streams of earnings.

“Concurrently, all other major insurers and reinsurers would be far in the red, and some would face insolvency.”