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The insurance and reinsurance businesses of Warren Buffett’s Berkshire Hathaway suffered from hurricane losses in the third-quarter with Helene and are expecting up to $1.5 billion of additional losses from hurricane Milton in the fourth-quarter.
Reporting its third-quarter 2024 results today, Berkshire Hathaway revealed a steep decrease in insurance underwriting income to $750 million for the period, down from $2.422 billion in Q3 2023 which was a quieter period catastrophe wise.
While catastrophe losses are not the sole driver of the decline, the significant hurricane impacts that affected the United States from hurricane Helene were part of it.
You can read more on Berkshire Hathaway’s Q3 2024 re/insurance results over at our sister publication Reinsurance News.
Estimated losses from hurricane Helene for Q3 are pegged at $565 million.
Individually, across the individual re/insurance arms the total for hurricane Helene’s financial impact looks higher, with the GEICO auto insurance arm taking losses and LAE of $260 million, the Berkshire Hathaway Primary Group incurred losses of $80 million and the Berkshire Hathaway P&C Reinsurance division approximately $380 million.
Meanwhile, hurricane Milton, a mainly Florida loss event, is set to drive a bigger catastrophe impact to Berkshire’s Q4 losses this year. But it would likely have been bigger without some adjustments to Berkshire’s property cat underwriting appetite earlier this year.
The company disclosed today that it estimates its pre-tax incurred losses from hurricane Milton could be between $1.3 billion and $1.5 billion.
Recall that Berkshire Hathaway had made a big bet on property catastrophe reinsurance in 2023, which paid off for the company.
In 2024 though, as we had reported, Berkshire Hathaway’s P&C reinsurance businesses reduced their property reinsurance writings in the second quarter, resulting in a reduction in underwriting volumes for the period.
That reduction in property reinsurance premium volume has likely saved Berkshire Hathaway from an even more significant loss from the two recent hurricanes.
Notable, in Berkshire’s pulling-back in 2024, was the fact the firm’s reinsurance arm was not a participant in Florida Citizens mid-year renewal this year.
A year earlier, at the Citizens mid-year 2023 renewal, Berkshire Hathaway had taken a significant $1 billion line in the program.
Had that been repeated in 2024 it’s safe to assume Berkshire’s losses from these hurricanes could have been relatively meaningfully higher.
You can read more on Berkshire Hathaway’s Q3 2024 re/insurance results over at our sister publication Reinsurance News.
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