At a time when the reinsurance market is softening, Berkshire Hathaway Inc. says it is holding back reinsurance capacity until pricing improves.

In the company's second-quarter earnings report filed with the Securities and Exchange Commission, Berkshire says it has “generally constrained the volume of business written in recent years as premium rates have not been attractive enough to warrant increasing volume.”

The company added that it has the capacity and desire “to write substantially more business when appropriate pricing can be obtained.”

Observers of the reinsurance market say there has been an influx of capital over the past 12 months, as high as $50 billion. This has caused a softening in reinsurance prices—especially catastrophe property, in which rates have dropped as much as 25 percent.

Berkshire's insurance operation—which consists of GEICO, General Re, Berkshire Hathaway Reinsurance Group (BHRG) and Berkshire Hathaway Primary Group—says Q2 revenues rose 13 percent to $35 billion and rose 15 percent for the first six months of this year over the same period last year to $68 billion.

In Q2, BHRG and General Re incurred pre-tax losses of $189 million related to European floods. BHRG took the brunt of the catastrophe losses at $124 million. The company says there were no significant losses from cats in the first half of the year, which it defines as a single event—or series of related events—exceeding $75 million on a consolidated basis.

At GEICO, the company's direct writer of private passenger auto, premiums earned in Q2 increased 11 percent to $4.6 billion and 19 percent for the first six months to $9 billion.

Berkshire's Q2 consolidated net earnings—which in addition to insurance includes railroad, utilities, energy, finance and financial product companies—increased 43 percent to 1.38 billion and for the six months are up 46 percent to $9.43 billion.

Special Reports /

Berkshire: Q2 Results Positive, Reinsurance Pricing Not Attractive Enough to Pursue More Volume

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