The February 22 earthquake in Christchurch has dealt a blow to the profits of one of the world's richest men, Warren Buffett.
His investment company Berkshire Hathaway suffered a 58 per cent drop in first-quarter profit because of an estimated US$1.7 billion ($2.1 billion) in pretax insurance losses from major disasters in Japan, Australia and New Zealand.
Buffett, the company's chief executive, estimates that Berkshire will report US$1.5 billion in net income, down from US$3.6 billion the year before. He did not offer earnings per share figures.
He said the biggest factor in the earnings drop was losses related to the damage from the Japanese earthquake and tsunami, Australian floods and the New Zealand earthquake.
"We had probably the second-worst quarter for the insurance industry in terms of disasters around the globe," Buffett said.
Reinsurance companies, like Berkshire's General Re and National Indemnity, sell back-up insurance to primary insurers so the industry can cover big losses.
Berkshire expects to record a US$821 million underwriting loss in its insurance businesses during the quarter because of the catastrophes.
That compares with a US$226 million underwriting gain in last year's first quarter.
Berkshire's insurance businesses will still contribute US$131 million to net income for the first quarter, because of investment gains, considerably less than a year ago when Berkshire's insurance businesses, which include car and home insurer Geico, added US$1.2 billion to net income.
Berkshire owns 80 subsidiaries, but its insurance and utility businesses typically account for more than half of the company's net income.
联系客服
