Berkshire Hathaway Inc., owned by Warren Buffett – investing billionaire, plans to provide more data in regards to claims costs and insurance units. The United States Securities and Exchange Commission is pressing the company to provide more information.
We “agree to provide disclosures in future filings of the significant catastrophe losses for our insurance group as a whole and for each of our underwriting units to the extent that such losses are significant,” said CFO Mark Hamburg of Berkshire Hathaway, based out of Omaha, Nebraska. He mentioned this in a letter to the SEC that was issued back on April 25 and recently released.
The SEC has also asked Berkshire Hathaway to provide much more information on its write-downs of stock and bond investments and its derivative holdings. As you may be aware, Berkshire Hathaway has around one dozen insurance units, Geico being one of the most prominent. They sell auto insurance, General RE reinsurers insurance and they have the Berkshire Hathaway Reinsurance Group.
When Superstorm Sandy hit the East Coast portion of the United States during October 2012, this cost Berkshire Hathaway $1.1 million before taxes. This includes a $490 billion loss at Geico, we learned in the letter that was recently released. The company also mentioned losses that they experienced during the earthquake in New Zealand in 2011, the earthquake in Japan during 2011 and the Gulf of Mexico oil rig explosion in 2010.
Recently, insurers have decided to expand their disclosures in order to help investors. The largest publicly traded home and car insurer – Allstate Corp. – started mentioning their catastrophe losses each month back in 2011. They do this when the losses exceed $150 million. The largest life insurer in the United States – MetLife Inc. – also explained how recent annuities that they sold would perform during a market downturn.
In a May 14 letter to Hamburg, the Securities and Exchange Commission said that they are finished with their inquiry. This letter is usually released once the regulator is through with his or her analysis.