Outlier Berkshire Hathaway deal drags down reinsurer results

A group of 18 U.S. property/casualty reinsurers produced $38.87 billion in net written premiums in 2015, an 18.6% decline from the prior year due largely to a loss-portfolio deal involving National Indemnity Co., according to the Washington-based Reinsurance Association of America.

The one-time consideration for the loss-portfolio contract by Berkshire Hathaway Inc.'s National Indemnity was booked in 2014 with affiliated insurer GEICO, the RAA said.

The loss-portfolio deal also affected net income for the 18 reinsurers, which dropped 31.1% to $10.79 billion in 2015.

The net income for National Indemnity, which was among 11 reinsurers reporting a lesser profit in 2015, dropped 40% from 2014 to $7.18 billion last year.

Ten of the 18 reported declines in net written premiums in 2015 compared with 2014, with National Indemnity accounting for about 90% of the $8.89 billion decline.

The group's combined ratio deteriorated from 91.1% in 2014 to 92.6% last year, the RAA said in a statement.

Policyholder surplus was $130.42 billion at the end of 2015, down about 8% from a year earlier and up less than 1% compared with the third quarter of 2015.