The Wall Street Journal
A reinsurance operation at Warren Buffett's Berkshire Hathaway Inc. reported $216 million in catastrophe losses tied to the earthquake in Chile and the sinking of the Deepwater Horizon oil rig.
The unit, called the Berkshire Hathaway Reinsurance Group, incurred the costs in the first six months of 2010, when it had an overall underwriting gain of $169 million. Both figures were reported along with second-quarter results in a filing with securities regulators Friday.
Berkshire had estimated three months ago that losses at the reinsurance operation from just the Chilean earthquake would be $140 million. The latest filing didn't say what portion of the $216 million was from the sinking of the oil rig, which touched off the massive spill in the Gulf of Mexico, and how much was from a re-estimation of costs tied to the quake.
The unit, run by Buffett's insurance lieutenant, Ajit Jain, has "constrained" how much new insurance it sells this year because it hasn't been satisfied with the going rate for the types of coverage it sells, according to Berkshire's latest securities filing. Rates for many types of commercial coverage have been declining for several years, and Buffett and Jain are well known for leaping into the market when prices are at their highest.
And while much of the language in Berkshire's securities filing was unchanged from last quarter, the discussion about results at Jain's operation contained one substantial revision: "We have the capacity and the willingness to write substantially more business when appropriate pricing can be obtained," it said.
The unit, called the Berkshire Hathaway Reinsurance Group, incurred the costs in the first six months of 2010, when it had an overall underwriting gain of $169 million. Both figures were reported along with second-quarter results in a filing with securities regulators Friday.
Berkshire had estimated three months ago that losses at the reinsurance operation from just the Chilean earthquake would be $140 million. The latest filing didn't say what portion of the $216 million was from the sinking of the oil rig, which touched off the massive spill in the Gulf of Mexico, and how much was from a re-estimation of costs tied to the quake.
The unit, run by Buffett's insurance lieutenant, Ajit Jain, has "constrained" how much new insurance it sells this year because it hasn't been satisfied with the going rate for the types of coverage it sells, according to Berkshire's latest securities filing. Rates for many types of commercial coverage have been declining for several years, and Buffett and Jain are well known for leaping into the market when prices are at their highest.
And while much of the language in Berkshire's securities filing was unchanged from last quarter, the discussion about results at Jain's operation contained one substantial revision: "We have the capacity and the willingness to write substantially more business when appropriate pricing can be obtained," it said.
