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 New Zealand brokers, the relevant part of these results sits with Berkshire Hathaway Reinsurance Group (BHRG) and Berkshire Hathaway Specialty Insurance (BHSI), which maintains an Auckland office.
BHRG, whose subsidiaries include National Indemnity Company, General Reinsurance Corporation and Transatlantic Reinsurance Company, posted improved underwriting results this quarter, aided by favourable prior-year reserve development and an absence of major catastrophe losses.
For New Zealand insurers ceding risk into Berkshire's reinsurance operations, or brokers placing large commercial or catastrophe-exposed risks that ultimately draw on that capacity, this quarter's result points to continued capacity and stable terms from a well-capitalised reinsurer, relevant context given New Zealand's own history of catastrophe-driven reinsurance pricing pressure.
Berkshire Hathaway Specialty Insurance operates an Auckland office as part of its Australasia operation, underwriting commercial property, casualty, executive and professional lines and other specialty coverages for New Zealand businesses through brokers. BHSI has specifically launched new accident and health product lines in New Zealand in recent periods, and has introduced civil liability insurance for financial institutions and professional technology liability cover across both 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 New Zealand should confirm current appetite and terms directly with their underwriting contacts, since this quarter's disclosed figures are reported 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 New Zealand operations.
