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Berkshire Hathaway’s insurance premiums earned up nearly US$2 billion in first half of 2016


August 8, 2016   by Canadian Underwriter


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Berkshire Hathaway Inc. has reported US$21.923 billion in insurance premiums earned for the first six months of the year, up from US$19.940 billion in the first half of 2015.

For the second quarter of 2016 ending June 30, insurance premiums earned were US$10.799 billion, up from US$10.4 billion in Q2 2015.

Net earnings attributable to shareholders for H1 2016 were US$10.590 billion, up from US$9.177 billion in H1 2015, Omaha-Neb.-based Berkshire Hathaway said in its financial results, released on Friday. For the second quarter of this year, net earnings attributable to shareholders were US$5.001 billion, up from US$4,013 in Q2 2015.

Berkshire Hathaway and its subsidiaries “engage in diverse business activities,” including insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, retailing and services, the company noted in a statement.

Looking at operating earnings, the company reported US$4.607 billion in Q2 2016 compared to US$3.890 billion in Q2 2015. For the first six months of 2016, operating earnings were US$8.834 billion, up from US$8.134 billion in H1 2016.

For its business activities, Insurance-underwriting operating earnings were US$550 million for the first six months of the year compared to US$442 million. For Q2 2016, Insurance-underwriting income was US$337, compared to US$38 million in Q2 2015, Berkshire Hathaway said in the statement. “Insurance-investment income” operating income was US$978 million in the most recent quarter compared to US$977 million in Q2 2015. For H1 2016, insurance-investment income was US$1.897 billion compared to US$1.852 billion in the prior half-year.

Railroad, utilities and energy operating income was US$1.254 billion in Q2 2016, down from US$1.465 billion in Q2 2015. Railroad, utilities and energy operating income was US$2.479 billion in H1 2016 compared to US$2.931 billion in H1 2015. “Our railroad business generated significantly lower net earnings in the second quarter and first six months of 2016 compared to 2015, primarily due to a 7.5% year-to-date decline in unit volume,” Berkshire Hathaway reported. “Net earnings of our utilities and energy businesses were relatively unchanged in the second quarter and first six months of 2016 compared to 2015. Net earnings from our manufacturing, service and retailing businesses in 2016 increased 14.1% in the second quarter and 13.4% in the first six months as compared to 2015, reflecting the impact of the PCC and Duracell acquisitions, partly offset by lower aggregate earnings from the other businesses within this group.”

“Other businesses” reported US$1.889 billion in the most recent quarter and US$3.466 billion in H1 2016 compared to US$1.679 billion in Q2 2015 and US$3.091 billion in H1 2015.

The company’s financial results also noted that the Berkshire Hathaway Reinsurance Group saw revenues of US$1.652 billion in Q2 2016, down from US$1.978 billion in Q2 2015, and US$3.895 billion in H1 2016, up from US$3.425 billion in H1 2015.

“Our balance sheet continues to reflect significant liquidity and a strong capital base,” Berkshire Hathaway said in the report. “Net earnings attributable to Berkshire shareholders in the first six months of 2016 were $10.6 billion.”