FRI, SEP 01, 2023
Berkshire's big Florida insurance exposure survives Idalia
At the May shareholders meeting, Berkshire Hathaway insurance chief Ajit Jain reported premiums for catastrophe reinsurance had "zoomed" up that spring, prompting the company to become "very heavily exposed to property catastrophe," especially in Florida, by writing policies to share the potential burden of paying out claims with primary insurers.
"What that means is if there's a big hurricane in Florida, we will have a very substantial loss ... as much as $15 billion. And if there isn't a loss, we'll make several billion dollars as profit."
So far, three months into the Atlantic hurricane season, which runs through the end of November, it's looking like a good bet.
Hurricane Idalia, the first major storm to hit the state this year, brought flooding to Florida's western coast this week, damaging homes and businesses.
An American flag is seen amidst the wreckage of a home after the arrival of Hurricane Idalia in Horseshoe Beach, FL, August 31, 2023. REUTERS/Cheney Orr
But, as The New York Times reports, the damage "could have been far worse" because the Category 3 storm came ashore in a "marshy and thinly populated" area southeast of Tallahassee. It quickly weakened to Category 1.
According to Reinsurance News, initial estimates of insurance industry losses from the storm are below $10 billion, "lower than previously feared."
Last year, Hurricane Ian hit a much more densely populated area in southwestern Florida, generating between 50 and 65 billion dollars in insured damages, the second-largest total on record after 2005's Hurricane Katrina.
Lots of positive BYD headlines ... and no Berkshire sales since June
BYD has been generating a lot of headlines lately, but they haven't involved Berkshire Hathaway selling more shares of the Chinese electric carmaker.
Since it disclosed its first reduction just about one year ago, Berkshire has reduced the 225 million share stake it first bought in 2008 for $230 million by more than 56%.
There have not, however, been any new filings since June 19 when it reported owning 98.6 million shares, which is just under 9% of BYD's outstanding shares.
A disclosure is required whenever the stake percentage moves above or below a whole number, so if it continues to sell, the next filing would be triggered by a decrease of around 10.8 million shares to 87.7 million shares, a stake of just under 8%.
If Berkshire had maintained its 2023 selling rate, that would have occurred in mid-July.
Berkshire subsidiary closes deal to control Maryland LNG facility
Berkshire Hathaway Energy's deal to buy half of Cove Point LNG in Maryland for $3.3 billion closed today, giving BHE a controlling 75% limited partnership in one of the seven facilities in the United States that can export liquefied natural gas.
Photo: Berkshire Hathaway Energy
In a news release, a company official said the facility "plays an important role in Berkshire Hathaway Energy’s delivery of clean, low-cost and sustainable energy solutions to customers and communities."
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Why Buffett doesn’t recommend buying Berkshire stock (2021)
Warren Buffett explains why he doesn’t recommend that people buy Berkshire Hathaway stock, and reveals what he tells them to do instead.
BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Sep. 1, 2023
Berkshire's top holdings of disclosed publicly-traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.
Holdings are as of June 30, 2023 as reported in Berkshire Hathaway’s 13F filing on August 14, 2023, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
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