Insurance falls buffet Berkshire Hathaway
Falling revenue from US investment company Berkshire Hathaway’s insurance operations has been the major contributor to a 77% fall in third-quarter profit.
The company, led by legendary investor Warren Buffett, saw net income fall to $US1.06 billion ($1.5 billion) from $US4.5 billion ($6.5 billion) in the corresponding period last year.
Berkshire Hathaway usually makes about half its profits from its underwriting and reinsurance operations, but they suffered in the third quarter from falling investment returns and rising catastrophe payouts.
The reinsurance losses totalled $US166 million ($240 million) in the third quarter.
The major component of this loss was $US1 billion ($1.4 billion) in claims for hurricanes Gustav and Ike.
Insurance investment income declined 12%, while motor insurer Geico’s profit fell 27% to $US246 million ($355.6 million).
Reinsurer General Re has adopted more stringent underwriting measures, and saw profits fall 66% to $US54 million ($78 million).
The company, led by legendary investor Warren Buffett, saw net income fall to $US1.06 billion ($1.5 billion) from $US4.5 billion ($6.5 billion) in the corresponding period last year.
Berkshire Hathaway usually makes about half its profits from its underwriting and reinsurance operations, but they suffered in the third quarter from falling investment returns and rising catastrophe payouts.
The reinsurance losses totalled $US166 million ($240 million) in the third quarter.
The major component of this loss was $US1 billion ($1.4 billion) in claims for hurricanes Gustav and Ike.
Insurance investment income declined 12%, while motor insurer Geico’s profit fell 27% to $US246 million ($355.6 million).
Reinsurer General Re has adopted more stringent underwriting measures, and saw profits fall 66% to $US54 million ($78 million).