|Revision as of 09:52, May 10, 2009 (edit)
RCossart - Sr. Director (Talk | contribs)
(→Subject to the volatility of the insurance business)
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|Current revision (15:23, March 18, 2013) (edit) (undo)
Roger - Director (Talk | contribs)
m (Stock:Berkshire Hathaway (BRK)/Bears/Subject to the volatility of the insurance business moved to Stock:Berkshire Hathaway (BRKA)/Bears/Berkshire Hathaway (BRK)/Bears/Subject to the volatility of the insurance business)
BRK right now, works as an almost perfect insurance company. In this scenario, the prices it can charge for its services falls. Its margins actually begin to shrink. Then, invariably, there is a shock that causes a large disruption to the business and earnings fall, at times dramatically. The financial crisis has taken a toll on Berkshire Hathaway's results. The company posted a 1Q 2009 loss of $1.53B, mostly due to the insurance sector. BRK's Geico car insurance lost 20% in earnings and the reinsurance component, General Re, posted an operating loss as premiums fell 19%. These losses are caused by the general decrease in economic activity which harms the insurance industry.