Berkshire Hathaway reported net earnings of US$25.7 billion for the second quarter, more than double the US$12.4 billion posted a year earlier, though the increase was driven largely by US$12.7 billion in investment gains that the company itself cautions are not indicative of underlying business performance. Operating earnings, the more relevant measure of the underlying businesses, rose to US$13.0 billion from US$11.2 billion.
For Australian brokers, the more relevant story sits with Berkshire Hathaway Reinsurance Group (BHRG) and Berkshire Hathaway Specialty Insurance (BHSI), both of which are active in the Australian market.
BHRG, whose subsidiaries include National Indemnity Company, General Reinsurance Corporation and Transatlantic Reinsurance Company, posted improved underwriting results this quarter, helped by favourable prior-year reserve development and an absence of major catastrophe losses.
For Australian insurers ceding risk into Berkshire's reinsurance operations, or brokers placing large commercial or catastrophe-exposed risks that draw on that capacity, this quarter's result points to continued strength from a reinsurer with substantial capital, at a time when local catastrophe reinsurance pricing has been an active talking point following recent Australian weather events.
Berkshire Hathaway Specialty Insurance operates offices in Sydney, Melbourne, Perth, Brisbane and Adelaide, underwriting commercial property, casualty, executive and professional lines, marine and other specialty coverages for Australian businesses through brokers. BHSI has continued to expand its Australian product range, including recent additions to its marine and professional lines offerings, and has separately introduced civil liability insurance for financial institutions and professional technology liability cover across Australia and New Zealand.
Berkshire's primary insurance group overall, which includes BHSI alongside its other primary carriers, saw premiums written decline modestly this quarter, with declines recorded at several individual units. Brokers with active BHSI relationships in Australia should confirm current appetite and terms directly with their underwriting contacts, since this quarter's disclosed figures are at the group level rather than broken out by country.
Berkshire's US personal auto unit, GEICO, posted a weaker quarter on rising claims costs specific to that market; it has no Australian operations.
