2 March 2015

Berkshire Hathaway's insurance investment income drops

Warren BuffettBerkshire Hathaway saw a 17% decline in fourth-quarter 2014 net income but Warren Buffett's company still made a profit for the year.

The company, which celebrates its 50th anniversary in 2015, said both insurance underwriting and investments contributed to the lower fourth-quarter earnings which totalled $4.16bn compared with $4.99bn a year earlier. Full year 2014 net income totaled $19.87bn versus $19.48bn in 2013, up 2%.

Berkshire Hathaway's insurance segment investment income eased to $880m in the fourth quarter from $904m a year earlier, and full year investment income dropped to $3.54bn from $3.71bn.

At the end of December Berkshire Hathaway's equity portfolio was valued at $117.47bn, almost unchanged from $117.50bn a year earlier. The fixed income portfolio was valued at $27.64bn, down from $29.35bn in 2013. Other investments, such as preferred stock and warrants, increased to $22.32bn from $17.95bn.

After leading Berkshire Hathaway for five decades Buffett has started to talk openly about a successor, and it is possible that an announcement could be made before or at the 2 May annual meeting.