Premium falls as prices hit and insurer pulls back
SNL Financial reports that Warren Buffett’s Berkshire Hathaway cut sales of the riskiest US insurance policies - excess and surplus policies - as prices fell, Bloomberg reports.
Berkshire’s premiums from companies insured through excess and surplus policies dropped 32% to $473.9m in the 12 months ended March 31. That was the biggest drop among the top 30 carriers, pushing Berkshire to No. 12 from No. 8 among excess and surplus insurance writers.
Bigger fall than others
“Their premium decline is quite a bit more than other insurance companies,” Andrew Schukman, the SNL analyst who wrote the report, said. “That’s probably an indicator that they’re pulling back a bit.”
Rates in the excess and surplus market have falled for at least three years, said Schukman. AIG had an 11% fall in premium but remained at the top of the rankings, according to SNL. Industry-wide, premiums fell 5.5% to about $23 billion.
“I can’t say definitively if Berkshire is moving out or if they’re doing a temporary pullback,” Schukman said. “It could be that they’re not getting the rates that they want and they’re willing to pull back further than other companies are.”
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