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Berkshire Hathaway hit by billions in losses

Berkshire Hathaway hit by billions in losses | Insurance Business UK

Berkshire Hathaway hit by billions in losses

Berkshire Hathaway Inc., the name behind global insurer BHSI (Berkshire Hathaway Specialty Insurance), has revealed its financial results for the second quarter and first half of 2022.

According to the Omaha-based conglomerate, its net loss attributable to Berkshire shareholders amounted to US$43.8 billion in the quarter ended June 30, while the group’s attributable net loss in the first six months of the year totalled US$38.3 billion.

The losses represent a major blow compared to last year’s net earnings attributable to shareholders of US$28.1 billion and US$39.8 billion, respectively, for Q2 and H1.

Operating earnings, meanwhile, grew to US$9.3 billion in the quarter and to US$16.3 billion in the six-month span. Broken down into businesses, here’s how Berkshire’s operating results stacked up:

Source

Q2 2022

Q2 2021

H1 2022

H1 2021

Insurance – underwriting

US$581 million

US$376 million

US$628 million

US$1.1 billion

Insurance – investment income

US$1.9 billion

US$1.2 billion

US$3.1 billion

US$2.4 billion

Railroad

US$1.7 billion

US$1.5 billion

US$3 billion

US$2.8 billion

Utilities and energy

US$766 million

US$740 million

US$1.5 billion

US$1.4 billion

Other businesses

US$3.2 billion

US$3 billion

US$6.3 billion

US$5.6 billion

 

“Berkshire presents its results in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use Berkshire’s financial information,” explained the company. “That presentation includes the use of certain non-GAAP (generally accepted accounting principles) financial measures.

“In addition to the GAAP presentations of net earnings, Berkshire shows operating earnings defined as net earnings exclusive of investment and derivative gains/losses and impairments of goodwill and intangible assets. Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment gains or losses is independent of the insurance underwriting process.”

The group posted investment and derivative losses worth US$53 billion and US$54.6 billion, respectively, in the second quarter and first half of the year. In the previous year, the corresponding figures were both gains. The results were attributed to changes in the unrealised gains that Berkshire said existed in its equity security investment holdings.