berkshire

Record year for natural disaster losses

July 12, 2011: 11:23 AM ET

Call this the year of catastrophes – and not just the financial kind that the guys in Washington and Brussels seem resolved to lead us into.

Halfway through, this year is already the costliest on record for natural catastrophes, insurer Munich Re said Tuesday in its first-half review. Losses hit $265 billion in the first six months of 2011 – which exceeds the $220 billion in losses in the biggest previous year for natural disasters, 2005.

Expect more of these, unfortunately

Most of the losses this year stem from the March earthquake and tsunami in Japan, which caused more than 15,000 deaths and accounted for $210 billion in economic losses. That is another record, beating out the $125 billion in losses caused by Hurricane Katrina in 2005.

Losses tied to the quake have already taken a toll on insurance industry profits. First-half insured losses hit $60 billion, Munich Re said – five times the annual average over the past decade.

Berkshire Hathaway (BRKA), which last year took a big stake in Munich Re, said in April that it would likely report an insurance underwriting loss this year for the first time in almost a decade, thanks to the Japanese disaster and other calamities, mostly in Asia.

That said, the Japan quake stands to be less costly than Katrina. Munich Re said insured claims from March's disaster stand at around $30 billion, compared with the $44 billion the government estimated for Katrina. Insured losses on the World Trade Center terrorist attacks a decade ago have been estimated at around $40 billion, by comparison.

The question now is how high this year's record toll might rise. Munich said first-half losses "are generally lower than second-half losses, which are often affected by hurricanes in the North Atlantic and typhoons in the Northwest Pacific." Just another way in which the coming months promise to be eventful, and not in a good way.

  • Buffett reaches for Mastercard

    Flashing a little plastic can come in handy even if you're a billionaire.

    So it is with Warren Buffett, whose Berkshire Hathaway (BRKA) spent $54 million in the first quarter buying shares of the No. 2 U.S. card payment-network operator, Mastercard (MA). The purchase could mark the Berkshire stock-buying debut of Todd Combs, the company's first new portfolio manager in years.

    Berkshire bought 216,000 shares of Mastercard at an average price of around $252 apiece, MORE

    - May 16, 2011 5:11 PM ET
  • 'Ruthless' Buffett fails to show in Omaha

    Color Warren Buffett more mystified than angry over David Sokol's career suicide. 

    Sokol's illicit trading and deceit in the months leading up to his departure last month were "inexplicable and inexcusable," Buffett told Berkshire Hathaway (BRKA) shareholders at Saturday's annual meeting.

    But the billionaire investor expressed no hostility toward Sokol and no regrets for Berkshire's initial press release, which was widely criticized as failing to hold Sokol accountable for his sins. Buffett said he believes Berkshire acted properly MORE

    - Apr 30, 2011 1:16 PM ET
  • Asian quake losses hit Berkshire profits

    Berkshire Hathaway's first-quarter profit tumbled 58% from a year ago, as the company took a $1.1 billion pretax hit on last month's earthquake in Japan.

    Berkshire's (BRKA) net profit dropped to $1.5 billion from $3.6 billion a year ago, the company said Saturday at its annual shareholder meeting. CEO Warren Buffett said Berkshire took $1.7 billion in pretax losses in its big insurance business, as the company reserved for probable claims MORE

    - Apr 30, 2011 10:47 AM ET
  • The Buffett judgment question

    Few can match Warren Buffett as stock picker. But is he a sound judge of character?

    It's surely not a question the billionaire Berkshire Hathaway (BRKA) CEO relishes nowadays – not a month after David Sokol (right), his longtime right hand man and presumed successor, was unmasked as a selfish, rule-bending creep.

    But however unfair it may seem, the judgment question is one the 80-year-old Buffett won't be able to avoid this weekend. He and Berkshire Vice Chairman MORE

    - Apr 29, 2011 5:48 AM ET
  • Berkshire finally scolds Sokol

    Clearing the air before the coming Buffettpalooza weekend, Berkshire Hathaway belatedly slapped the wrist of its wayward son.

    A report from the company's audit committee said Wednesday that David Sokol broke company trading rules and lied to CEO Warren Buffett. Sokol is the longtime top executive who unexpectedly quit Berkshire (BRKA) last month amid questions about his trading in shares of a company Berkshire was acquiring.

    The company's statement comes three days before its heavily attended annual MORE

    - Apr 27, 2011 5:00 PM ET
  • Buffett buyout hits Goldman profit

     Goldman Sachs posted a steep decline in first-quarter profits, but its shares rose after the investment bank soared past Wall Street estimates.

    Goldman (GS) made$2.7 billion, or $1.56 a share, for the first quarter. That compares with a year-ago profit of $3.5 billion, or $5.59 a share.

    Revenue fell 7% from a year ago to $11.9 billion. Analysts were expecting the firm to make 82 cents a share on revenue of $10.2 billion.

    Goldman posted MORE

    - Apr 19, 2011 8:17 AM ET
  • There oughta be a law, Sokol edition

    David Sokol probably isn't in trouble with the law – but maybe he should be.

    That's the verdict rendered by some business types in a poll taken this week. The Argyle Executive Forum, a New York-based business networking group, said a survey Monday of more than 800 members shows only a quarter of respondents believe Sokol's recent purchases of Lubrizol (LZ) stock were illegal. A bigger group -- some 36% of MORE

    - Apr 5, 2011 9:55 AM ET
  • Berkshire takes big accounting hit

    Warren Buffett's Berkshire Hathaway took a nearly billion-dollar hit on its stock portfolio after regulators questioned the firm's accounting.

    Berkshire (BRKA) wrote down the value of its holdings in three big companies by $938 million at the end of 2010, reflecting a two-year-long slump in their share prices. The company cut the value of its investments in reinsurer Swiss Re, drugmaker Sanofi (SNY) and regional bank U.S. Bancorp (USB).

    But correspondence the Omaha-based MORE

    - Mar 28, 2011 2:16 PM ET
  • Berkshire's biggest breakup fees

    Warren Buffett's company could walk away richer even if the self-proclaimed elephant gunner doesn't bag his latest target.

    Lubrizol (LZ), the Wickliffe, Ohio, industrial lubricants company that agreed Monday to sell itself to Berkshire Hathaway (BRKA) for $9 billion, said in a securities filing Tuesday that it would pay Berkshire a $200 million termination fee if it breaks up the merger for a rival bid.

    The breakup fee amounts to 2.2% of the equity Berkshire MORE

    - Mar 16, 2011 6:49 AM ET
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.