Berkshire Hathaway, the Warren Buffett-run holding company and conglomerate, has reported a $1.3 billion decrease in net underwriting earnings across its insurance and reinsurance operations to $1.34 billion for the first quarter of 2025, compared with $2.6 billion in the prior year first quarter, amid significant losses from the Southern California wildfires.

The carrier warned in its full year 2024 results announcement that its pre-tax losses from the January 2025 Los Angeles wildfires could be approximately $1.3 billion.

Today, the firm has reported current accident year incurred losses from significant catastrophe events, so losses exceeding $150 million per event, in the first quarter of 2025 were $1.1 billion from the wildfires, revealing that underwriting results in Q1 2025 included after-tax losses from the event of approximately $860 million.

The majority of the wildfire loss, approximately $770 million, hit Berkshire Hathaway Reinsurance Group’s property and casualty (P&C) business, which saw losses and loss adjustment expenses increase by $606 million, or 20.2% year-on-year to $3.6 billion. The loss ratio increased 13.6 percentage points to 68.7% in the first quarter of 2025 compared to 2024.

Combined with higher underwriting expenses of $1.6 billion, the P&C reinsurance segment’s total losses and expenses increased 9.3% year-on-year to $5.2 billion compared with $4.4 billion in Q1 2024, with a combined ratio of 98.7% in Q1 2025, up on last year’s 81.5%. P&C pre-tax underwriting earnings fell from more than $1 billion in Q1 2024 to just $68 million in Q1 2025.

Also, within P&C reinsurance, estimated ultimate liabilities for losses occurring in prior accident years were reduced $330 million in Q1 2025 and $386 million in 2024, mostly attributable to lower-than-expected property losses.

In terms of premiums, Berkshire Hathaway Reinsurance Group’s written premiums dipped 5% year-on-year to $6.1 billion, which the company attributes to lower volumes in property coverages. Premiums earned decreased 3.7% to $5.2 billion.

The reinsurance arm’s retroactive reinsurance segment generated pre-tax underwriting losses of $209 million in Q1 2025, steeper than the prior year’s $147 million loss. Similarly, the periodic payment annuity business generated a steeper loss of $199 million in Q1 2025 compared with $151 million in Q1 2024, while the firm’s variable annuity guarantee reinsurance contracts produced pre-tax losses of $37 million this quarter, down from a gain of $94 million in Q1 2024.

Lastly, within the reinsurance group, the life and health (L&H) division delivered pre-tax underwriting earnings of $70 million, down on Q1 2024’s $108 million, which the firm says reflects the impact of life contract commutation gains of $51 million in the first quarter of 2024 and increased losses from U.S. long-term care business, partially offset by increased earnings from other life business.

L&H reinsurance premiums written and earned in Q1 2025 were substantially unchanged from the prior year first quarter at $1.2 billion and $1.2 billion, respectively.

All in all, Berkshire Hathaway Reinsurance Group recorded a pre-tax underwriting loss of $307 million in the first quarter of 2025, compared with earnings of $912 million in the first quarter of 2024.

Berkshire Hathaway Primary Group, which consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions, also fell to a pre-tax net underwriting loss in the quarter, of $144 million, compared with earnings of $486 million in Q1 2024.

Losses and loss adjustment expenses increased 22.8%, or $640 million to $3.5 billion, as the loss ratio rose 13.5 percentage points to 75.4%, with losses incurred from the Southern California wildfires of approximately $300 million. Berkshire explains that losses incurred in 2025 also included increases in estimated ultimate losses for prior accident years’ claims of $212 million, attributable to higher ultimate loss estimates in liability coverages, partly offset by lower ultimate loss estimates in property and medical liability coverages. Further, incurred loss estimates for prior accident years’ claims were reduced $93 million in the first quarter of 2024.

The underwriting expense ratio is relatively unchanged year-on-year, but the elevated loss experience pushed the primary insurer’s combined ratio to 103.1%, compared with 89.3% in 2024, as total losses and expenses rose to $4.7 billion from $4.1 billion.

Premiums written in the insurance business fell by 1.6% year-on-year to $4.4 billion in Q1 2025, driven by a 34% reduction at GUARD, contraction at RSUI, partially offset by higher volumes at NICO Primary, BHHC and BH Direct. The segment’s premiums earned rose slightly to $4.6 billion in Q1 2025 compared with $4.5 billion in Q1 2024.

Berkshire’s re/insurance operations also include GEICO, a provider of P&C policies, primarily private passenger automobile insurance, in all 50 states and the District of Columbia.

GEICO performed well in Q1 2025, offsetting the underwriting losses within the reinsurance and primary group’s, with pre-tax underwriting earnings of $2.2 billion, up on Q1 2024’s $1.9 billion. The improvement comes despite a rise in total losses and expenses to $8.6 billion from $8.3 billion in 2024, with a combined ratio of 79.8%, compared with 81.2% in Q1 2024.

At GEICO, losses and loss adjustment expenses increased $10 million to $7.42 billion in the first quarter of 2025, while underwriting expenses increased $263 million to $1.2 billion.

Premiums written at GEICO increased 6.6% year-on-year to $11.5 billion, as premiums earned rose to $10.6 billion.

On the asset side of the balance sheet, Berkshire has reported Q1 2025 net investment income attributable to its insurance operations of $2.9 billion for Q1 2025, an increase on Q1 2024’s 2.6 billion.

Lastly, Berkshire’s float has grown from approximately $171 billion at the end of 2024 to $173 billion at March 31st, 2025.

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