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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch 🐝🐝🐝 GOLD
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Number: of 21937 
Subject: Re: 22 years of underwriting earnings
Date: 03/05/23 1:37 PM
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I have a similar table. Slight difference in pretax underwriting profit for 2009 for some reason, but nothing material.

One thing to consider:
Due to a quirk of accounting, premiums earned take a big temporary leap upwards the year that any big retroactive insurance contract signed.
That accounts for $7.1bn in 2007 for Equitas, and $10.2bn in 2017 for AIG.
I deduct those from the "premiums earned" column before trying to estimate the average underwriting profit that way.

With that adjustment, the average underwriting profit since 2001 (your date range) has been 3.329%.
If you go back to 1998, the average has been 2.406%.

FWIW, when trying to estimate cyclically adjusted underwriting profit, I use two methods, and average them.
They are: 2.70% of premiums earned (excluding big retroactive deals), and 1.30% of float.
I aimed for conservatism when I picked those figures, but as recent years haven't been fantastic the sum of my figures is pretty much spot on the sum of the actual figures since 2009, or since 1999.

For 2022, my cyclically adjusted estimate was $2.074 billion.

Jim
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This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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