Berkshire Hathaway posts underwriting loss after motor claims rise
Berkshire Hathaway posts underwriting loss after motor claims rise
6 March 2023
Berkshire Hathaway has reported a $US90 million ($133.8 million) underwriting loss after its direct motor insurance division was affected by increased claims frequencies, high used cars prices and parts shortages.
The result compared to a profit of $US728 million ($1.08 billion) a year earlier and included losses from significant catastrophe events of about $US2.4 billion ($3.6 billion).
Significant events, with losses topping $US150 million ($223 million), were triggered by Hurricane Ian and floods in Australia. Events the year before were dominated by Hurricane Ida, floods in Europe and Winter Storm Uri.
The motor insurance division, Geico, posted a pre-tax loss of $US1.88 billion ($2.8 billion), swinging into the red after a year-earlier $US1.26 billion ($1.87 billion) profit as costs rose and injury claim severities trended higher.
Berkshire Hathaway Primary Group reported pre-tax earnings of $US393 million ($584 million), down from $US607 million ($903 million).
Premiums written rose 16.1%, while the loss ratio increased 1.9 percentage points. Incurred significant catastrophe event losses were dominated by Hurricane Ian.
The primary group consists of several independently managed business, including Berkshire Hathaway Specialty Insurance and others providing mainly commercial covers.
Berkshire Hathaway Reinsurance Group rebounded to a profit of $US1.39 billion ($2.7 billion) from a year-earlier loss of $930 million ($1.38 billion).
Premiums written jumped 19.9% mainly due to net increases in new property business and higher rates, and the inclusion of the Trans Re Group, partly offset by exchange rate moves.
Berkshire insurance investment income, reported separately from the underwriting results, rose to $US6.48 billion ($9.64 billion) from $US4.81 billion ($7.15 billion).
