Berkshire Hathaway's third-quarter profit more than doubled to US$9.4 billion, compared to US$4.6 billion in the same period last year. The company recorded a US$4.4 billion one-off after-tax gain as the result of the merger of the Kraft Heinz Food Co, which took place in July.
But performance was otherwise uninspiring. Third-quarter revenue increased 15% year over year to US$59 billion on mixed operating results from the company's main operating segments.
Only two of the firm's four insurance lines, Geico and Berkshire Hathaway Primary Group, posted earned premium growth during the third quarter.
Greggory Warren, senior equity analyst for Morningstar, said General Re reported another quarterly decline in earned premiums primarily because of pricing pressure within the P&C market. Meanwhile Berkshire Hathaway Reinsurance Group actually posted an improvement in earned premiums – its 31% increase in P&C premiums more than offsetting a 26% decline in life and annuity premiums.
From a profitability perspective, Berkshire’s insurance operations had a pre-tax underwriting gain of US$643 million compared with an underwriting gain of US$976 million during the third quarter of 2014. The decline in underwriting gain was primarily due to weaker results from each of Berkshire's insurance segments, the analyst said.
