5 May 2012

Big re-insurer returns to profit in wake of quakes

10:08 pm on 5 May 2012

The world's second largest reinsurance company has rebounded from losses incurred by a series of calamities, including the Canterbury earthquakes.

Figures just released show Swiss Re made a profit of $NZ1.38 billion in the first three months of the year.

That contrasts with a loss of $NZ83 million in the same period last year.

At that time, all major reinsurance companies reported flat earnings or losses because of huge payouts for the Canterbury earthquakes as well as the earthquake and tsunami in Japan and extensive flooding in Australia.

Reinsurance is purchased by both local insurance companies and the Earthquake Commission to give some protection against sudden payouts far bigger than those that fit within normal budgets.

And in Nebraska, Warren Buffett's Berkshire Hathaway insurance conglomerate more than doubled its profit in the first quarter, as the conglomerate's insurance business was spared from the devastating natural disaster losses that hit the company a year earlier.

Berkshire posted a $US54 million ($NZ67.8 million) insurance underwriting profit in the quarter. That compared with a year-earlier $US821 million ($NZ1.03 billion) loss, when results were hurt by costs for earthquakes in Japan and Canterbury and floods and a cyclone in Australia.