The insurance coverage and reinsurance companies of Warren Buffett’s Berkshire Hathaway suffered from hurricane losses within the third-quarter with Helene and predict as much as $1.5 billion of further losses from hurricane Milton within the fourth-quarter.
Reporting its third-quarter 2024 outcomes at this time, Berkshire Hathaway revealed a steep lower in insurance coverage underwriting revenue to $750 million for the interval, down from $2.422 billion in Q3 2023 which was a quieter interval disaster smart.
Whereas disaster losses usually are not the only driver of the decline, the numerous hurricane impacts that affected america from hurricane Helene have been a part of it.
You possibly can read more on Berkshire Hathaway’s Q3 2024 re/insurance results over at our sister publication Reinsurance News.
Estimated losses from hurricane Helene for Q3 are pegged at $565 million.
Individually, throughout the person re/insurance coverage arms the entire for hurricane Helene’s monetary affect appears greater, with the GEICO auto insurance coverage arm taking losses and LAE of $260 million, the Berkshire Hathaway Main Group incurred losses of $80 million and the Berkshire Hathaway P&C Reinsurance division roughly $380 million.
In the meantime, hurricane Milton, a primarily Florida loss occasion, is about to drive a much bigger disaster affect to Berkshire’s This autumn losses this 12 months. However it will probably have been larger with out some changes to Berkshire’s property cat underwriting urge for food earlier this 12 months.
The corporate disclosed at this time that it estimates its pre-tax incurred losses from hurricane Milton could possibly be between $1.3 billion and $1.5 billion.
Recall that Berkshire Hathaway had made a giant wager on property disaster reinsurance in 2023, which paid off for the company.
In 2024 although, as we had reported, Berkshire Hathaway’s P&C reinsurance companies diminished their property reinsurance writings within the second quarter, leading to a discount in underwriting volumes for the interval.
That discount in property reinsurance premium quantity has probably saved Berkshire Hathaway from an much more important loss from the 2 current hurricanes.
Notable, in Berkshire’s pulling-back in 2024, was the very fact the firm’s reinsurance arm was not a participant in Florida Citizens mid-year renewal this year.
A 12 months earlier, on the Residents mid-year 2023 renewal, Berkshire Hathaway had taken a significant $1 billion line in this system.
Had that been repeated in 2024 it’s protected to imagine Berkshire’s losses from these hurricanes might have been comparatively meaningfully greater.
You possibly can read more on Berkshire Hathaway’s Q3 2024 re/insurance results over at our sister publication Reinsurance News.
