Berkshire Hathaway has reported a strong quarter of growth for its P&C reinsurance operations, with premiums written rising by 30% in the period, with the inclusion of TransRe a significant driver of that growth.
Berkshire Hathaway reinsurance businesses delivered a Q1 2023 underwriting profit of $231 mn, down on the previous year total of $301 mn.
Berkshire Hathaway’s P&C reinsurance losses and loss adjustment expenses for the quarter increased by $1.1 bn over the prior year, resulting in a higher combined ratio at 92.4% for Q1 2023.
The combined Berkshire Hathaway re/insurance operations delivering pre-tax underwriting gains of just over $1.2 bn in the first-quarter of 2023.
Berkshire Hathaway reported that the inclusion of the TransRe group into its P&C reinsurance results added $700 mn of the loss gain.
In the premium growth, $1.3 bn was from the inclusion of TransRe Group, with premiums written otherwise increasing $542 mn (12.4%) during the quarter.
Losses from significant catastrophes during the first quarter were $407 mn in 2023 and $315 mn in 2022, with Berkshire highlighting the New Zealand floods and cyclone Gabrielle as its biggest impacts of the quarter.
The impressive premium growth in the current hard reinsurance market environment shows the ambition to continue scaling Berkshire Hathaway’s P&C reinsurance business and the addition of TransRe to the stable of companies will accelerate that, allowing Buffett’s company to capitalise on market conditions at an even faster pace.
Warren Buffett’s life and health reinsurance business performed much better in Q1 2023, over the prior year, reporting a pre-tax underwriting profit of $137 mn for the period, better than the prior year’s $26 mn underwriting loss.
Berkshire Hathaway’s primary insurance group also fared better in Q1 2023, with a pre-tax underwriting profit of $268 mn a significant increase from the prior year’s $92 mn.
The GEICO auto insurance business was another highlight, reporting an underwriting profit of $703 mn for Q1, well up on the prior year period’s loss of $178 mn a year ago.
The primary insurance group delivered an improved Q1 underwriting profit of $268 mn, well-up on the previous year’s $92 mn.
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