{"id":6036,"date":"2023-05-09T00:32:06","date_gmt":"2023-05-09T04:32:06","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/berkshire-could-suffer-15-billion-loss-from-a-florida-hurricane\/"},"modified":"2023-05-09T00:32:07","modified_gmt":"2023-05-09T04:32:07","slug":"berkshire-could-suffer-15-billion-loss-from-a-florida-hurricane","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=6036","title":{"rendered":"Berkshire Could Suffer $15 Billion Loss From a Florida Hurricane"},"content":{"rendered":"
\n

\n Berkshire Hathaway
\n has increased its insurance exposure to Florida, opening it up to a possible $15 billion loss if there is a major hurricane in the state. <\/p>\n

Ajit Jain, Berkshire\u2019s head of insurance operations, made the comments Saturday at the company\u2019s annual meeting in Omaha, Nebraska. Berkshire took on much of the additional exposure in April.<\/p>\n

\n

The Florida hurricane insurance market is one of world\u2019s biggest for any catastrophe as insurers seek to lay off risk in the reinsurance market where Berkshire is leader. The Atlantic hurricane season, according to the National Weather Service, begins June 1 and end Nov. 30.<\/p>\n

Florida is at high risk because of significant coastal development\u2014plus rising construction costs\u2014and that was underscored by the estimated $50 billion to $65 billion of insured losses last September from Hurricane Ian, which hit the state\u2019s southwest coast. A direct hit on Tampa or Miami would have been far more costly. Global warming is believed to be heightening the risks.<\/p>\n

A shareholder asked Jain about Berkshire\u2019s property and casualty exposure to catastrophes.<\/p>\n

Jain discussed Berkshire\u2019s low exposure to property losses for most of the past 15 years because \u201cprices have not been attractive.\u201d<\/p>\n

That has changed with better pricing, Jain said, and Berkshire lifted its Florida exposure in particular around April 1, a quarterly date when reinsurers take on new exposure.<\/p>\n

\u201cWe had a lot of powder dry, and we were lucky that we kept the powder dry because April 1 suddenly prices zoomed up again a lot higher than what they were\u00a0<\/strong> on January 1 and started to look attractive to us. So now we have a portfolio that is very heavily exposed to property catastrophe,\u201d Jain said.<\/p>\n

Berkshire has particular exposure to Florida, he said. <\/p>\n

\u201cAnd of course, if the hurricane happens in Florida, we could lose\u2014across all the units, we could lose as much as $15 billion. And if there isn\u2019t a loss, we\u2019ll make several billion dollars as profit,\u201d he said.<\/p>\n

Berkshire, he said, has an enormous insurance capital base of close to $300 billion and generally is willing to lose no more than 5% from a single natural disaster such as a hurricane or earthquake.<\/p>\n

Jain said when he called CEO Warren Buffett to ask him to boost Berkshire\u2019s exposure by $2 billion to $15 billion, the phone call lasted less than 30 seconds. Buffett has huge confidence in Jain, who has worked at Berkshire since the mid-1980s.<\/p>\n

Berkshire\u2019s P&C reinsurance business has been consistently profitable under Jain\u2019s leadership. <\/p>\n

\u201cI hope he calls me again,\u201d Buffett said, referring to another potentially large reinsurance transaction.<\/p>\n

Write to Andrew Bary at andrew.bary@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Berkshire Hathaway has increased its insurance exposure to Florida, opening it up to a possible $15 billion loss if there is a major hurricane in the state. Ajit Jain, Berkshire\u2019s head of insurance operations, made the comments Saturday at the company\u2019s annual meeting in Omaha, Nebraska. Berkshire took on much of the additional exposure in […]<\/p>\n","protected":false},"author":1,"featured_media":6037,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-6036","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nBerkshire Could Suffer $15 Billion Loss From a Florida Hurricane | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Berkshire Hathaway has increased its insurance exposure to Florida, opening it up to a possible $15 billion loss if there is a major hurricane in the\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=6036\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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