......we'll all have to keep our fingers crossed on hurricane Georges but so far, so good for this season..........the last information that I saw predicted 6 major Atlantic hurricanes this season and we've only had one hit the south Atlantic states to date..........the sun crossed the Equator yesterday, so time becomes our ally with each passing day........I think we're gonna luck out........
Hurricane Andrew in 1992 did two things for Berkshire. It sent weaker insurance compinies into bankruptsy, and justified an increase in premiums paid by those who live in Hurricane prone areas. In the long run insurance companies don't pay for the damage (at least companies who don't end up bankrupt) the people who purchase the insurance policy does the paying. Have you had an auto accident lately? If so you know what I mean.
After Berkshire had to pay out $125 million in claims in connection with Andrew Buffet wrote a letter to shareholders reminding them of the volatility of the business:
At this point, Berkshire may be the largest writer of
super-cat policies in the world, an activity that will
continue to make our quarterly earnings volatile. But that is of no concern to us: The gold medal in a marathon is awarded to the runner with the best time for the entire race and not to the one who ran the steadiest pace. Whenever the choice is offered, we welcome the chance to forfeit stability of quarterly or annual earnings in exchange for greater long-term profitability [Of Permanet Value,Pgs 177 - 178, by Andrew Kilpatrick].