Berkshire Insurance Revenue Rose 7.8%

NU Online News Service, Nov. 10, 11:54 a.m.EST?Berkshire Hathaway Inc., the Omaha, Neb.-based holdingcompany owned by billionaire investor Warren Buffett, postedoverall net income of $1.81 billion for the third quarter, up 58percent from $1.14 billion reported for the period last year.

Berkshire, whose insurance subsidiaries include NationalIndemnity, GEICO Corp. and GeneralCologne Re, showed improvedunderwriting profits. The company's underwriting operations earneda combined $258 million for the quarter, in contrast to anunderwriting loss of $65 million posted one year ago. For the firstnine months of the year, Berkshire had $704 million in underwritingprofit, compared with a $64 million loss posted during the sameperiod a year ago.

For the third quarter, insurance investment income droppedslightly to $519 million, from $536 million one year earlier, whilefor the nine-month period, insurance investment income rose to$1.68 billion from $1.51 billion during the same period lastyear.

Berkshire's insurance revenue rose to $5.96 billion for thequarter, up 7.8 percent from the same period one year earlier.Among its insurance units, GEICO premium revenue increased 18percent to $2 billion for the third quarter, while General Repremium revenue fell 3.2 percent to $2.05 billion.

Overall, Berkshire revenue rose 72 percent to $18.2 billion fromthe $10.6 billion the company reported one year ago. The companyattributed the gain to $6.1 billion of revenue from McLane Co., awholesale distributor of grocery goods Berkshire bought lastMay.

"Revenues in the third quarter and the first nine months grewabnormally," the company stated, "because of the acquisition ofMcLane Company, one of the nation's largest wholesale distributorsof grocery and nonfood items."

Regarding its insurance operations, Berkshire said the companywas helped by a lack of major catastrophe losses in the first threequarters of the year. "There were no major insured catastrophesduring the first nine months of 2003," the company said, "andBerkshire's underwriting results benefited from this benignenvironment."

The GEICO auto insurance unit premium volume increased 15.6percent for the third quarter and 16.4 percent for the first ninemonths. But, the company cautioned, GEICO's premium growth will"likely moderate to about 15 percent" for the fourth quarterbecause of lower rate increases in the auto marketplace.

Meanwhile, Berkshire's non-insurance subsidiaries, which includebusinesses as diverse as Dairy Queen and Fruit of the Loom, earned$610 million for the third quarter, higher than the $536 millionreported by these units one year ago.