Berkshire Hathaway Q1 loss

Warren Buffet’s Berkshire Hathaway announced a Q1 loss of $1.5bn after investment and derivative losses slashed its otherwise positive underwriting results.

Of its four key insurance businesses only General Re made a loss.

Highlights (2008 Q1 in brackets)

• Operating earnings $1,705m ($1,931m)
• Sales of investments -$241m ($76m)
• Other-than-temporary impairments of investments (writedowns) -$2,012m
• Derivative losses -$986m (-$1,067m)
• Total investment and derivative losses -$3,239m (-$991m)
• Net earnings/loss -$1,534m ($940m)

Insurance

• Insurance premiums earned $8,183m ($6,209 m)
• Sales and service revenues $14,310m ($14,760m)
• Interest, dividend and other investment income $1,318m ($1,184m)
• Investment gains/losses -$3,558m ($115m)
• Total $20,253m ($22,268m)

GEICO

• Premium income $3,261m ($3,032m)
• Pre-tax underwriting gain $148m ($186m)

General Re

• Premium income $1,379m ($1,704m)
• Pre-tax underwriting gain/loss -$16m ($42m)

Berkshire Hathaway Reinsurance Group

• Premium income $3,087m ($984m)
• Pre-tax underwriting gain $203m ($29m)

Berkshire Hathaway Primary Group

• Premium income $456m ($489m)
• Pre-tax underwriting gain $4m ($25m)

The company said: “Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment gains or losses is independent of the insurance underwriting process.”