NU Online News Service, May 9, 3:56 p.m.EDT--Berkshire Hathaway Inc. reported higher earnings forits insurance business, but the company's total profit for thefirst quarter still deteriorated, falling 12 percent to $1.36billion.

The Omaha, Neb.-based holding company, led by Warren Buffett,saw its overall first quarter income slip from $1.55 billion oneyear ago. In the latest quarter, Berkshire suffered some $307million in investment losses from foreign currency trading.

On the positive side, Berkshire saw its underwriting income growto $319 million, up from $192 million last year. (On a pre-taxbasis, it improved to $492 million from $296 million.) Investmentincome from insurance units also rose, to $554 million from $455million.

Among individual insurance units, the auto insurer GEICO saw itsunderwriting income increase to $312 million from $223 on a pre-taxbasis. It had $2.4 billion in earned premiums, up from $2.1billion.

Berkshire described GEICO's first quarter underwriting resultsas "exceptional" and said that absent large catastrophe losses,GEICO's underwriting results are "expected to be favorable over theremainder of 2005."

One concern, however, is recent rate reductions, which, whenfully effective, are expected to cut into underwritingprofitability, the company observed.

Berkshire Hathaway Reinsurance Group's underwriting income roseto $143 million from $22 million, while Berkshire Hathaway PrimaryGroup's underwriting income doubled to $18 million from $9million.

One insurance unit that saw deteriorating results was GeneralRe, whose underwriting income fell to $19 million from $42million.