(BRK.A), (BRK.B)
Berkshire Hathaway’s bevy of insurance companies could be in for a period of strong growth (helping to push up Berkshire’s profits) if its companies fall in line with the projections that Research Markets has announced in its just released report, “Global Property and Casualty Insurance Market 2016-2020.”
The Global Property and Casualty Insurance Market is forecasting strong growth with a compound annual growth rate of 5.77% during the period 2016-2020
The report covers the present scenario and the growth prospects of the Global Property and Casualty Insurance Market for 2016-2020. To calculate market size, the report considers the net premiums earned from the property and casualty market in the Americas, Asia Pacific (APAC), and Europe, the Middle East, and Africa (EMEA).
Berkshire’s profits from insurance were down in the first quarter of 2016, and Warren Buffett cited claims from hailstorms in Texas as one of the reasons.
Insurance underwriting profits dropped to $1.132 billion in the quarter, as compared with profits of $1.355 billion in the first quarter of 2015.
Berkshire has also soured on the reinsurance business as of late, noting that an increased number of players in the market has led to pricing competition.
In addition to reigning in its own reinsurance underwriting, over the last year Berkshire has aggressively cut its stake in German reinsurer Munich Re.
While Berkshire’s short-term profits from insurance may be down, the Global Property and Casualty Insurance Market forecasts a positive outlook over the next five years.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.