Berkshire Hathaway

Berkshire Hathaway reduced its underwriting of property reinsurance in the first-quarter of the year and its CEO Greg Abel said during the firm’s annual meeting on Saturday that competition and capital is flowing into the industry, leading the company to be more cautious as it looks to sustain adequate underwriting returns on risks assumed.

Berkshire Hathaway anticipates underwriting less in reinsurance premiums while the market cycle remains in a more competitive phase, according to CEO Gregory Abel in his first letter to shareholders, while the company pulled back on property writings given the headwinds faced.

The Berkshire Hathaway insurance and reinsurance businesses are estimated to face losses from the Los Angeles, California wildfires amounting to as much as $1.3 billion, while the company also disclosed underwriting fewer property reinsurance premiums in 2024.

The insurance and reinsurance businesses of Warren Buffett’s Berkshire Hathaway suffered from hurricane losses in the third-quarter with Helene and are expecting up to $1.5 billion of additional losses from hurricane Milton in the fourth-quarter.

Insurance-linked securities (ILS) investment management specialist Nephila Capital has written just over $756 million of the $2.98 billion reinsurance placement by Florida Citizens at the renewals in 2023, but Berkshire Hathaway was the largest participant with a huge $1 billion line.

Despite writing more business at the April renewals this year, Berkshire Hathaway’s property catastrophe reinsurance book is “very unbalanced” according to Ajit Jain, with the giant insurance and reinsurance balance-sheet still significantly exposed to Florida hurricanes.

Warren Buffett’s conglomerate and re/insurance company Berkshire Hathaway delivered an underwriting loss for 2022 in its results this weekend, but the benefits of the strategy of accumulating “free” investment float are again evident and the acquisition of Alleghany Corporation has helped to bulk this out even further.

Warren Buffett’s conglomerate and re/insurance company Berkshire Hathaway has reported a huge $3.4 billion of pre-tax losses from hurricane Ian, but still its property and casualty reinsurance division delivered an underwriting profit, helped by significant reserve releases.

Despite discussing alternative proposals with some 31 parties, Alleghany Corporation has not found a better bidder than Warren Buffett’s conglomerate Berkshire Hathaway, which is now on-track to secure its acquisition of the TransRe owner.

A significant insurance and reinsurance M&A transaction has just been announced, with Warren Buffett’s conglomerate Berkshire Hathaway set to acquire Alleghany Corporation, the owner of reinsurer TransRe, in an all-cash deal valued at $11.6 billion.