Berkshire Hathaway sees 2020 earnings cut in half

The group’s insurance lines remain its largest operation, backed by a $138bn (£99bn) ‘insurance float’

Berkshire Hathaway, the US-based multinational conglomerate, has reported 2020 earnings of $42.5bn (£30.5bn), down almost half from $81.4bn (£58.4bn) the previous year.

The owner of (re)insurance businesses Geico, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group, also reported a $2.05bn (£1.5bn) drop in its operating earnings, down to $21.9bn (£15.7bn) for the year.

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Warren Buffet, chairman and CEO at Berkshire Hathaway, said: “Our focus at Berkshire is both to increase this segment of our income and to acquire large and favourably-situated businesses. 

“Last year, however, we met neither goal: Berkshire made no sizable acquisitions and operating earnings fell 9%.”

The group’s largest value operations remain its property and casualty insurance lines, backed by a $138bn (£99bn) “insurance float”.

While investments for the firm declined from $56.3bn (£40.4bn) to $31.7bn (£22.7bn), Buffet confirmed that the group has a number of unrecorded retained earnings that could boost Berkshire Hathaway’s earnings.

He added: “Of course, some of our investees will disappoint, adding little, if anything, to the value of their company by retaining earnings. But others will over-deliver, a few spectacularly. 

“In aggregate, we expect our share of the huge pile of earnings retained by Berkshire’s non-controlled businesses (what others would label our equity portfolio) to eventually deliver us an equal or greater amount of capital gains.”

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