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 Canadian brokers, the part of these results that matters most is the performance of Berkshire Hathaway Reinsurance Group (BHRG) and Berkshire Hathaway Specialty Insurance (BHSI), both of which write business directly into the Canadian market.
BHRG, which offers excess-of-loss and quota-share reinsurance coverages on property and casualty risks to insurers and reinsurers worldwide through National Indemnity Company, General Reinsurance Corporation and Transatlantic Reinsurance Company, posted stronger underwriting results this quarter, aided by favourable prior-year reserve development and an absence of major catastrophe losses.
For Canadian insurers who cede risk to Berkshire's reinsurance operations, or brokers placing large or complex commercial risks that ultimately draw on Berkshire-backed capacity, that strength points to continued appetite and stable terms from one of the largest reinsurance balance sheets in the world, at a time when several other lines of the commercial market are seeing capacity tighten.
Berkshire Hathaway Specialty Insurance operates its own Canadian offices in Toronto and Calgary, writing commercial property, casualty, executive and professional lines, surety, marine and other specialty coverages directly to Canadian businesses and through Canadian brokers and managing general agents. BHSI has continued to expand its Canadian product range in recent periods, including surety and network security and privacy liability lines.
Berkshire's primary insurance group, which includes BHSI alongside its other primary carriers, saw overall premiums written decline modestly this quarter, with declines recorded at several of its units. Brokers with active BHSI Canada relationships should confirm current appetite and pricing directly with their underwriting contacts rather than assume it mirrors trends elsewhere in Berkshire's broader results.
Berkshire's US personal auto unit, GEICO, posted a weaker quarter on rising claims costs specific to that market; it has no Canadian operations
