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Berkshire Hathaway Posts 46% Jump in 2Q Net Income as Insurance Operations Net Falls

Source: A.M. Best - Jeff Jeffrey

Posted on 05 Aug 2013 by Neilson

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Berkshire Hathaway profitsBerkshire Hathaway Inc. posted a second-quarter net profit of $4.54 billion, marking a 46% increase from a year ago. The earnings were driven by investment returns and strong performance across its business divisions, the company said in a statement.

Berkshire Hathaway said insurance underwriting tapered off from where it stood in 2012, falling from $619 million to $530 million. Part of the decrease was related to recent flooding in Europe, which the company said resulted in pre-tax losses of $189 million.

However, its insurance-investment income rose 7.1% to $1.14 billion. Overall, the company saw investment earnings of $322 million---up from $81 million.

Berkshire Hathaway's non-insurance businesses reported a jump in operating earnings to $2.4 billion from $2.2 billion.

In June, Berkshire Hathaway said it planned to buy Hartford Financial Services Group's variable annuity business that had been sold in the United Kingdom for about $285 million cash. The deal, which still needs regulatory approvals, is expected to close by the end of this year.

The company also announced a number of high-profile personnel changes during the second quarter.

Berkshire Hathaway Specialty Insurance in July hired a former Zurich Insurance executive to lead its customer and broker engagement as a senior vice president. Lori Spoon Rafkin was previously the broker relationship leader for Zurich North America.

Berkshire Hathaway Specialty Insurance also appointed Ralph Tortorella III as senior vice president, chief legal and compliance officer. Tortorella was previously the global specialty general counsel at Liberty Mutual Group Inc.

The company's second-quarter earnings increase piggy-backed off the company's strong performance during the first quarter.

Last quarter, Berkshire Hathaway reported earnings of $4.9 billion, marking a 33% increase in profit.