Berkshire Hathaway reinsurance reports significant losses driven by $230m COVID-19 charge

Warren Buffett's Berkshire Hathaway suffered a staggering unrealised investment loss of $55.5 billion for the first quarter of 2020, leading to a total net loss of $49.7 billion. The insurance underwriting results for the quarter were negatively affected by estimated losses and costs associated with the COVID-19 pandemic.

The company's insurance segment suffered a noticeable drop in its revenues and underwriting earnings, mainly tied to the COVID-19 pandemic and losses in its reinsurance business.

Losses and loss adjustment expenses in Q1 2020 increased $346 million, 19.5 percent over 2019, reflecting an estimated COVID-19 related claims of approximately $230 million.

The Berkshire Hathaway Reinsurance Group, which includes Gen Re, reported a loss of $489 million, compared with $253 million in Q1 2019.

The insurance businesses generated after-tax earnings from underwriting of $363 million, compared with $389 million in the prior year period.

While the company's auto business GEICO benefited from reduced claims activity due to the COVID-19 lockdown. The division delivered a profit of $984 million during the period.

Berkshire Hathaway Primary Group, which provides a variety of commercial insurance solutions, generated pre-tax underwriting losses of $33 million in the first quarter of 2020, compared with $30 million in the first quarter of 2019. The underwriting loss included claim cost estimates and allowances for credit losses attributable to the pandemic, partly offset by lower other underwriting expenses.