- Berkshire Hathaway’s bet on an inactive Florida hurricane season is set to pay off
- The company could potentially make several billion dollars from the bet
- So far, there has only been one notable storm in Florida this year
- Berkshire’s share of the insured damage from the storm is likely to be small
- Berkshire’s stock is down slightly but has performed well this year
- The peak of the hurricane season ends in mid-October
- Berkshire has been out of the Florida hurricane market in recent years
- This year, Berkshire decided to take on exposure to the market
- Berkshire’s insurance executive, Ajit Jain, felt rates were now adequate
- Berkshire has a large capital base and is comfortable risking 5% of it on a single bet
- Buffett and Jain can make quick decisions on insurance risks
- Berkshire’s insurance operations are a consistent source of profits for the company
Berkshire Hathaway’s bet on an inactive Florida hurricane season looks like it will pay off, potentially netting the company several billion dollars. So far, there has been one notable storm to hit Florida, Hurricane Idalia, causing insured damage of $3 billion to $5 billion. Berkshire’s share of the loss is likely to be small. Berkshire’s stock is down slightly but has performed well this year. The peak of the hurricane season ends in mid-October. Berkshire has been out of the Florida hurricane market in recent years, but this year decided to take on exposure. Berkshire’s insurance executive, Ajit Jain, felt rates were now adequate. Berkshire has a large capital base and is comfortable risking 5% of it on a single bet. Buffett and Jain can make quick decisions on insurance risks. Berkshire’s insurance operations are a consistent source of profits for the company.
