Berkshire Hathaway Reinsurance operation rebounds into profit

Berkshire Hathaway’s reinsurance division rebounded into profit in the third quarter, as premiums grew amid stronger demand.

Premiums earned in the company’s reinsurance division rose to $3.94 billion in the third quarter, up 4.3 percent on the same period a year earlier. The company said that increases in premiums written in property/casualty , which accounts for most of its reinsurance division, reflected overall growth in U.S. and international markets. The growth was primarily attributable to new business, net of non-renewals, and increased participations for renewal business.

Berkshire Hathaway Reinsurance Group reported net income of $52 million, compared with a loss of $163 million a year ago.

“The timing and amount of catastrophe losses can produce significant volatility in our periodic underwriting results, particularly with respect to our reinsurance businesses,” said the company.

Incurred losses in the third quarter included $281 million in 2019 related to Typhoon Faxia in Japan and $267 million in 2018 related to Hurricane Florence and Typhoon Jebi. In the fourth quarter of 2019, Typhoon Hagibis struck Japan and caused widespread damage, which certain industry models presently estimate insured losses will likely exceed $8 billion. Berkshire Hathaway said that while it could not reasonably estimate its losses from this event at this time, it expected its underwriting results in the fourth quarter to be negatively affected.

The company’s total revenue from insurance businesses rose 8.4 percent to $17.1 billion.

The company’s cash pile has grown to a massive $128 billion, boosted by the investment arm, run by its chairman chief executive Warren Buffett. Pundits continue to speculate about whether the investment guru may make a sizeable acquisition.

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