Berkshire Hathaway reported a 10 pct operating profits decline year over year and a 37 pct net income decline (which includes investment income).
One poorly performing unit was the Reinsurance Group that “insures against large disasters”. A 411 million dollar loss from a storm in Australia hit the pocketbook this time. With climate change induced extreme weather patterns on the rise, it is this writers opinion that this could he the start of a trend.
In the old days, a storm hit. The insurance company paid. And promptly raised premiums. And collected those premium ls and booked profit. But with storms the norm rather than the exception, those days seem to be a distant memory.
The article states there is added competition in this sector. Which means more storms, less chance to raise premiums. What is to like?
A related nugget caught this writers attention - due to improving economy, lower gas prices and complicated new cars, it’s Geico auto insurance unit has also been reeling.
Now, lower gas prices have also prompted folks to up size their vehicles (along with their fries and soda). Which leads to increased emissions (Saeed are you listening?). This can’t be good for Climate Change. Or for the Berkshire Reinsurance group.
Thoughts?
Contents from today’s wsj
Thank you.