Company: BRK-A
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000950170-25-025210
Chunk: 212

Company: BERKSHIRE HATHAWAY INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 7
Chunk 212
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 Analysis 

Insurance—Underwriting 

Berkshire Hathaway Reinsurance Group 

Estimated ultimate claim liabilities for prior years’ contracts increased $196 million in 2024, $1.1 billion in 2023 and $86 million in 2022. The increase in 2023 was derived from higher estimates for asbestos, environmental and other casualty claims, which net of changes in deferred charges, produced a pre-tax loss of $650 million in 2023. The net effects of the increases in ultimate claim liabilities in 2024 and 2022 were relatively insignificant. 

Unpaid losses and loss adjustment expenses for retroactive reinsurance contracts declined $2.2 billion in 2024 to $32.4 billion on December 31, 2024, primarily due to loss payments. Deferred charge assets on retroactive reinsurance contracts declined $698 million in 2024 to $8.8 billion at December 31, 2024. Deferred charge balances will be charged to earnings over the expected remaining claims settlement periods. 

Periodic payment annuity 

Periodic payment annuity business is price and demand sensitive and the supply of available business is affected by the timing of underlying legal claim settlements. In 2023 and 2024, premium rates for new business were at unacceptable levels and we wrote no new business in either year.

Pre-tax underwriting losses from periodic payment annuity contracts in each period included the accretion of discounted liabilities, including liabilities for contracts without life contingencies, and foreign currency exchange gains and losses on non-U.S. Dollar denominated contracts. Changes in foreign currency exchange rates were insignificant in 2024 and produced pre-tax losses of $60 million in 2023 and pre-tax gains of $71 million in 2022. Pre-tax underwriting losses before foreign currency effects were $596 million in 2024, $590 million in 2023 and $694 million in 2022. Pre-tax losses included a loss of approximately $130 million in 2022 from the settlement of a terminated reinsurance contract. Periodic payment annuity liabilities were $14.3 billion at December 31, 2024, including liabilities of $4.0 billion for contracts without life contingencies, and excluding the effects of discount rate changes recorded in accumulated other comprehensive income.

Variable annuity 

Our variable annuity guarantee reinsurance contracts produced pre-tax earnings of $157 million in 2024, $233 million in 2023 and $467 million in 2022. Earnings