The reinsurance business of Warren Buffet-owned holding company Berkshire Hathaway has announced $1.5 billion in catastrophe-driven losses and loss provisions for 2021’s third quarter, a figure that rises the firm’s overall losses and loss adjustment expenses by $442 million against the prior year quarter.
Overall 9M cat losses of $1.9 billion are attributable to Hurricane Ida, European flooding and Winter Storm Uri.
Meanwhile, estimated losses attributable to significant catastrophes in 2020 stand at $300 million and are derived from Hurricanes Laura and Sally.
Underwriting expenses for Q3 rose to $898 million compared to $24.7 million in the prior year period and are reported by have been driven primarily by commissions and brokerage costs.
Overall, the segment fell to an underwriting loss of $247 million, compared to a $99 million profit in 2020.
The expense ratio in 2021 increased 1.8 percentage points in the third quarter and decreased 1.5 percentage points in the first nine months compared to the same periods in 2020,
attributable to changes in business mix.
The segment’s premiums written in the third quarter increased $155 million to $4.1 billion, reflecting net new business, increased participation on renewals, improved prices and favorable foreign currency translation effects.
Berkshire Hathaway’s Reinsurance Group’s loss ratio increased 7.9 percentage points in the third quarter and decreased 7.7 percentage points in the first nine months of 2021 compared to 2020.
Losses incurred in the first nine months of 2021 also included $564 million from a net decrease in estimated ultimate liabilities for prior years’ loss events.
Additionally, losses and loss adjustment expenses in 2020 included a year-to-date net increase in estimated ultimate liabilities for prior years’ loss events of $342 million and losses attributable to COVID-19 of $113 million in the third quarter.