Warren Buffett: Geico's success eases catastrophes' bite.He faulted Katrina and her ugly sisters The Ugly sisters are characters in the fairy tale and pantomime, Cinderella. They are the daughters of Cinderella's cruel step mother, who treat her poorly. They are traditionally played by male actors in drag and wear outlandish exaggerated clothes. and touted his long-time darling Geico all in a single letter. Geico improved its productivity 32% in just two years, Warren Buffett Warren Buffett Known as "the Oracle of Omaha," Buffett is Chairman of Berkshire Hathaway and arguably the greatest investor of all time. His wealth fluctuates with the performance of the market, but for the last few years he has been reported to be worth over $30 billion, making told investors in his annual letter to Berkshire Hathaway Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) is a conglomerate holding company headquartered in Omaha, Nebraska, U.S., that oversees and manages a number of subsidiary companies. shareholders. Auto policies in force grew by 12.1% at Geico, increasing the company's market share of U.S. private passenger auto business from about 5.6% to about 6. l%. The story was even better in the Garden State. "Drivers in that state love us. Our retention rate there for new policyholders is running higher than in any other state, and by some time in 2007, Geico is likely to become the third largest auto insurer in New Jersey," he stated. It was Geico's superb performance that helped Berkshire Hathaway's insurance results sail through the stormy year of losses. Subsidiaries General Re and the Berkshire Hathaway Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Group too performed well in 2005, in spite of the record $3.4 billion of losses inflicted by Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. , along with Rita and Wilma--whom he called Katrina's "ugly sisters." Buffett said due to the large catastrophe losses of the past two years and uncertainty in storm patterns, "we've concluded we should now write mega-cat policies only at prices far higher than prevailed last year--and then only with an aggregate exposure that would not cause us distress if shifts in some important variable produce far more costly storms in the near future." |
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