OMAHA, Neb. - Billionaire investor Warren Buffett's Berkshire Hathaway Inc. reported yesterday a third-quarter profit of $1.14 billion as its insurance units raised prices.
Net income was $744 a share, compared with a loss of $679 million, or $445 a share, a year earlier, the company said in a statement. Earnings from operations were $1.1 billion compared with a loss of $895 million in last year's third quarter.
Berkshire's car insurer, Geico Corp., and National Indemnity Co., its reinsurance company, have increased rates and are beginning to recover after paying large claims after the terrorist attacks of September last year. The companies have also tightened policy terms to limit risk.
"The insurance businesses have been getting better," said John Thompson, a money manager at Thompson Plumb Investment Management. "I see gradual improvement. Pricing is good."
Berkshire Hathaway reported investment gains from sales of securities of $27 million vs. $216 million a year earlier. General Re, the third largest reinsurer, added $447 million to the pool of money it has set aside to pay for future losses.
Buffett has continued to build his insurance operations this year. In September, Berkshire invested $212 million in Lloyd's of London, the 300-year-old insurance market. In May, Berkshire invested $125 million in a new Kemper Insurance Cos. unit that will underwrite commercial and professional liability coverage.
Class A Shares of Omaha, Nebraska-based Berkshire gained $1,100 to $74,700 in New York Stock Exchange composite trading.