An American financial giant's insurance earnings have been battered by Cyclone Debbie, which lashed across Queensland and New South Wales as well as New Zealand in March.
The
Insurance Council of Australia (ICA) said the cyclone caused an estimated $1.4 billion in insured losses, with 58,416 related to personal claims and 7,462 to businesses.
The cyclone also made its presence felt as far as Omaha, Nebraska in the United States, as it made a US$165 million ($208 million) impact to the earnings results of Warren Buffet's
Berkshire Hathaway, The Courier-Mail reported.
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The firm was exposed to the “cyclone from Australia” via its two subsidiaries: General Re, which copped estimated losses of US$50 million in reinsurance deals; and Berkshire Hathaway Reinsurance Group, which incurred US$115 million in losses due to reinsurance work and quota shares, including a 10-year, 20% deal with
IAG.
Berkshire Hathaway reported that its insurance segment suffered an overall underwriting loss of US$22 million, compared with a gain of US$337 million the previous year. The decline was also due to other factors, including the increased number of claims incurred by its auto insurer, Geico, compared to the year before, the report said.
Altogether, the firm posted US$4.12 billion in operating profit in the second quarter, down by 11% from prior year.
The firm's biggest unit, railroad BNSF, saw a 24% rise in profit to US$958 million.
At the end of the quarter, Berkshire Hathaway had almost US$100 billion – a record balance, which is keeping Buffet from putting his “foot to the floor” on an acquisition for a long time, The Courier-Mail reported.
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