By Jamie McGee<\/p>\n
March 15, 2010, 1:54 PM EDT<\/span><\/p>\n March 15 (Bloomberg) — Munich Re and Warren Buffett\u2019s Berkshire Hathaway Inc. are among reinsurers reporting a third straight quarterly increase in policyholders\u2019 surplus as capital markets improve and earnings rise.<\/p>\n The combined surplus of 19 U.S. property-casualty reinsurers rose to $77.32 billion in the fourth quarter, the Reinsurance Association of America said today in a report. The surplus, a measure of assets minus liabilities, climbed 20 percent in 2009 from $64.36 billion a year earlier.<\/p>\n \u201cIt is a combination of a much stronger financial market and solid profits in 2009, particularly because we didn\u2019t have any major catastrophe events,\u201d said Paul Newsome, an analyst at Sandler O\u2019Neill & Partners LP. \u201cSurplus will probably increase in 2010 because we will hopefully be having a reasonably stable financial market and the reinsurers have been pretty disciplined in their underwriting.\u201d<\/p>\n Berkshire Hathaway and Munich Re, the world\u2019s largest reinsurer, reported profit increases in the fourth quarter from a year earlier as investments improved. Only two tropical storms struck the U.S. in 2009, compared with 2008 when Hurricanes Ike and Gustav contributed to $27 billion in costs to insurers, according to the Insurance Information Institute.<\/p>\n Munich Re\u2019s surplus rose 7.8 percent from the third quarter to $3.93 billion. The Munich-based reinsurer\u2019s fourth-quarter profit increased sevenfold to 780 million euros ($1.07 billion). National Indemnity Co., owned by Omaha, Nebraska-based Berkshire Hathaway, reported an 11 percent surplus gain to $38.06 billion. The parent company\u2019s profit increased to $3.06 billion in the last three months of 2009.<\/p>\n Prices<\/p>\n \u201cUsually if you are in a period where you have excess capital, like the industry has, it does not bode well for pricing,\u201d said Michael Paisan of Stifel Nicolaus & Co. \u201cDemand has stayed stagnant and probably has decreased somewhat because of the economic problems.\u201d<\/p>\n Global reinsurance prices dropped 6 percent for policies renewed Jan. 1, according to Guy Carpenter & Co., the reinsurer unit of Marsh & McLennan Cos. This compares with an 8 percent increase a year earlier.<\/p>\n –Editors: Dan Reichl, Steve Dickson<\/p>\n <\/p>\n Share Investor Links<\/span><\/a><\/a><\/p>\n Share Investor Blog<\/a> – Stockmarket & Business commentary Download the 2009 Warren Buffett Letter & 2009 Annual Report to Berkshire Hathaway Shareholders<\/span><\/a> Recommended Amazon Reading<\/span><\/p>\n
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