Berkshire Hathaway posts 12th year of underwriting profits
Berkshire Hathaway has reported an underwriting profit for the 12th consecutive year. Its profit hit $2.7 billion in 2014.
Its operating earnings increased to $19.9 billion in the year ended December 31, 2014, compared with $19.5 billion in 2013.
Berkshire Hathaway’s subsidiary Gen Re posted a fall in underwriting profits to $277 million in 2014, compared with $283 million in 2013, while its premiums earned increased to $6.3 billion in 2014, compared with $6 billion in 2013. This was driven by increases in both its property and casualty (P&C) line and its life and health line.
In Gen Re’s P&C business, premiums earned increased 3.2 percent to $3.1 billion in 2014, compared with $3 billion in 2013. The increases were primarily due to treaty participations as well as growth in its facultative and primary casualty businesses.
Berkshire Hathaway Reinsurance Group posted an increase in premiums earned for 2014 to $10.1 billion, compared with $8.8 billion in 2013. Premiums earned by its P&C division fell 21 percent to $4.1 billion in 2014, compared with $5.1 billion in 2014.
Within this, premiums earned in 2014 with respect to a 20 percent quota-share contract with Swiss Re declined $1.3 billion from premiums earned in 2013. This contract expired at the end of 2012 and is in run-off. Property catastrophe premiums earned in 2014 were $688 million, a decline of $113 million (14 percent) as compared to 2013.
“Our volume with respect to these coverages continues to be constrained, as rates, in our view, are inadequate. However, we have the capacity and desire to write substantially more business when appropriate pricing can be obtained. These declines were partially offset by increased premiums earned from property quota-share contracts,” said Berkshire Hathaway.
Its retroactive reinsurance division drove growth in premiums earned, with premiums earned hitting $3.4 billion in 2014, compared with $328 million in 2013.
GEICO also posted an increase in premiums earned to $20.5 billion in 2014, compared with $18.6 billion in 2013. Berkshire Hathaway said that these increases were attributable to an increase in voluntary auto policies-in-force of 6.6 percent during the past twelve months and increased average premium per policy.
