Warren Buffett’s Berkshire reports $962 million in underwriting losses each quarter due to car crash injuries.

Warren Buffett, who has long reiterated his love of insurance companies, has been hit hard. Berkshire Hathaway Inc.’s underwriting business continues to see inflation weigh heavily on the company’s operating units.

The conglomerate reported an underwriting loss of $962 million in the third quarter. This is the worst quarterly loss in a year. Auto insurer Geico was the hardest hit in the insurance business, costing him $759 million before tax. The unit hasn’t made a quarterly profit since the second quarter of last year.

Auto insurers are struggling to keep up with rising used vehicle prices, rising accident frequency and severity, and rising costs associated with accident-related medical claims and litigation. The broader insurance industry also had to contend with the aftermath of Hurricane Ian, which slammed into southwestern Florida in late September and caused billions of dollars in damage.

According to Berkshire, the frequency of claims in the first nine months of the year is generally higher for property damage, personal injury and collisions.

“Geico is definitely a pressure point to watch for Berkshire,” said CFRA Research analyst Cathy Seifert, noting that future earnings measures were weaker than levels reported by peers. “Geico seems to be losing market share, too.”

Still, rising inflation hit the Omaha, Nebraska-based company while other Berkshire business units, including railroad BNSF in addition to utilities and energy, were otherwise profitable. As a result, earnings from the railway business declined from last year.

“Customer demand for products and services was relatively strong in 2022, but demand began to weaken in the third quarter for some businesses,” Berkshire said. regulation filing. “We continue to experience negative impacts from rising material, transportation, labor and other input costs.”

Operating income totaled $7.76 billion, up 20% from last year. The increase includes an $858 million foreign exchange gain related to non-US dollar-denominated debt and a 17% increase in earnings from businesses in which Berkshire owns a 20% to 50% stake.

“Overall, business is going very well. Edward Jones.

Berkshire participates for the first time Occidental Petroleum The corporation was conducted under the equity method of accounting after its stake in the company exceeded 20% earlier this year. Including warrants, the conglomerate owns almost 30% of the oil companies. The company said he will report the results of that business a quarter later, with Berkshire’s share of Occidental’s revenue expected to be reported in the fourth quarter of 2022.

Berkshire also reported a net loss of about $2.69 billion in the quarter due to a $10.4 billion hit related to its investment portfolio as economic uncertainty rocked markets.

The company repurchased $1.05 billion of stock during this period. This is in line with about $1 billion bought back in the last three months. Buffett is increasingly turning to share buybacks as a way to deploy cash when opportunities are otherwise sparse.

Berkshire’s cash holdings rose slightly to $109 billion as Buffett maintained a stash of dry powder amid a market downturn fueled by economic uncertainty.

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