Buffett, underscoring Berkshire’s investment record, cited the example of a $ 8.6-million purchase of National Indemnity, the Omaha-based insurer in 1967. That has now catapulted to become part of the company’s top investment and oldest operating subsidy.
Berkshire’s total float (money earned in premiums before the claims payout) has grown from $ 19 million in 1967 to $ 147 billion. The float rose by $ 9 billion in the year gone by.
While there is uncertainty on long-term underwriting loss affecting the float, Buffett hopes to keep it at bay.
And credits this growth of the insurance unit to hiring Ajit Jain in 1986. Jain, hailing from Odisha and an alum of Indian Institute of Technology-Kharagpur, now serves as the vice-chairman of insurance operations at Berkshire Hathaway and is part of its board of directors.
Buffett recalled how he serendipitously hired Jain who had no prior insurance experience. “I said, ‘Nobody’s perfect,’ and hired him. That was my lucky day,” Buffett said in the letter. “Ajit actually was as perfect a choice as could have been made. Better yet, he continues to be — 35 years later.”
Berkshire’s cluster of insurers remain at the top of the company’s pile of investments, followed by 5.5% of Apple Inc. In the year gone by, Berkshire earned $ 785 million from Apple dividends and its share in Apple earnings stand at $ 5.6 billion.
The BNSF Railway is third with earnings of $ 6 billion in 2021. Berkshire Hathaway Energy, 91.1% owned by Berkshire, recorded a revenue of $ 4 billion in 2021. Bank of America, American Express Corp., Moody’s Corp. and the Coca-Cola Co. figure among other top equity investments of Berkshire.