Warren Buffett’s Berkshire Hathaway made its resurgent appetite for property and casualty reinsurance underwriting evident in the second-quarter, as the companies reinsurance unit underwrote 29% more in gross premiums than the prior year.
Berkshire Hathaway’s P&C reinsurance premiums written increased by $668 million (29%) in the second-quarter of 2020 and $1.2 billion (20%) for the first six months of the year.
Property reinsurance underwriting drove most of the increase, Berkshire Hathaway explained, as it took advantage of rates to grow its book the most significantly for some years.
New property contracts underwritten drove the lions share of the increase, which aligns with the market’s view that Berkshire Hathaway had been much more active in quoting and binding risks at reinsurance renewals this year.
Offsetting the P&C growth in property reinsurance was the impacts of the Covid-19 pandemic and also adverse development on casualty lines exposures from prior years.
Berkshire Hathaway reported Covid-19 related claims of around $350 million for Q2 and $575 million for H1 of 2020.
Also denting its P&C reinsurance result, was adverse development related to prior years loss events amounting to $439 million, related to legacy environmental, asbestos and other latent injury claims, the company said.
Berkshire Hathaway reported no significant impact from property catastrophe loss events during the first-half of the year, although given its scale and reach it will have taken losses from the majority of major events around the globe.
Overall, Warren Buffett’s insurance and reinsurance operations delivered operating revenues of $17.2 billion for Q2 2020, up on the prior year.
But the Berkshire Hathaway Reinsurance Group P&C unit fell to an underwriting loss of -$1.103 billion for the second-quarter, as our sister publication Reinsurance News reported yesterday.